21. Youtube's Revenue Model
YouTube generates revenue through
a variety of revenue streams:
including
advertising, channel memberships,
live streaming, and merchandise
sales. Data monetization.
22. While it does use the traditional
advertising model, it has expanded
revenue by allowing users to purchase
virtual gifts to give to their favorite
content creators, who then convert
these gifts back to cash, sharing a cut
with the platform.
TikTok
24. Betterment
Betterment uses a robo-advisory
model, where clients receive financial
advice and asset management online
and via software, rather than human
advisors. It's an innovative take on the
service model in the finance industry.
27. Applyboard
The startup makes money from
revenue-sharing agreements with
colleges and universities. If a student
attends a college from using their
services, ApplyBoard gets a cut of the
tuition.
28. 1. Understand Your Customers
2. Understand Your Market
3. Assess Your Product or Service
4. Evaluate Your Business Costs
5. Experiment
6. Scalability
Choosing a
Revenue Model
29. we should not be afraid to think outside the box.
Remember,
flexibility and
innovation are
key.
Good morning everyone! I'm [Presenter Name], and I'd like to thank you all for being here today. As fellow entrepreneurs and business enthusiasts, I believe we're all eager to delve into the nitty-gritty of a topic that's close to our hearts - Product Pricing and Revenue Models. The theme of our discussion? "Show Me the Money".
It's an honor to share the stage with some of the brightest minds in the industry. Personally, I have spent over a decade working with startups, navigating the challenging yet rewarding world of entrepreneurship. I am here to share my insights into how businesses make money through effective pricing and revenue models.
Welcome everyone! Today we're going to talk about a subject that every business owner needs to know: revenue models. A revenue model is essentially how your business makes money, and it can make or break your success. Without a solid revenue model, even the best products or services will struggle to stay afloat. So, buckle up and get ready to learn!
Revenue models might not sound like the most exciting topic, but trust me, it's crucial for any business looking to succeed. We'll be covering everything from what revenue models are, to different types of models, to strategies for maximizing revenue. By the end of this presentation, you'll have a solid understanding of how revenue models work and how to choose the right one for your business.
So, let's start from scratch. …. The revenue model is the backbone of any startup because it ties the product value to financial performance. It's not just about earning income, but creating a sustainable and scalable business.
So, let's start from scratch. …. The revenue model is the backbone of any startup because it ties the product value to financial performance. It's not just about earning income, but creating a sustainable and scalable business.
what does it look like in practice?Each model suits different types of businesses, products, and customers. Today we will examine these models and then explore how they can be innovated for today's ever-changing marketplace.
The product sales model is the simplest one. Businesses sell goods or services to customers for a profit. For instance, Walmart uses this model; they buy goods at wholesale prices, sell them at retail prices, and earn revenue from the price difference. This model can work well for businesses with physical products or one-time services.
Next, we have the Subscription Model. This model involves charging customers a recurring fee to access a product or service. For instance, Netflix users pay a monthly subscription to access their vast library of content. It's a model suited to businesses that offer ongoing services or digital products.
The freemium model provides basic services for free, but charges for premium features. A notable example is Spotify, where users can listen to music for free but must pay for an ad-free experience with additional features. This model is excellent for attracting users with free services and then converting them into paying customers.
Then, there's the Advertising Model. Businesses provide free services or platforms, and advertisers pay to reach that audience. Google and Facebook generate most of their revenue this way. They provide free services to users while selling ad space to businesses. This model is well suited for platforms with large user bases and diverse demographics.
But what if we step outside the box of these traditional models? Today's startups need to be innovative, not just in their products but also in their revenue models. They need to challenge norms, question the status quo, and reimagine how value can be delivered and monetized.
"Now, let's shift gears and look at some innovative revenue models that startups, in particular, should consider to stand out from the competition."
provides a basic product for free or at a low cost but charges for refills or related products. It’s commonly used in the gaming industry, where the game is free, but users pay for additional features or virtual goods."
" The Shared Economy Model has risen in popularity, and companies like Airbnb and Turo have leveraged it. This model involves sharing resources, reducing costs for users and making efficient use of assets. It's ideal for startups with a platform that connects providers and consumers.."
The Pay-What-You-Want model is where customers pay any amount they feel is appropriate for your product or service. It works best when customers value the product highly and want to support the business. It’s risky, but when done right, it can foster strong customer loyalty.
Radiohead's "In Rainbows" Album: In 2007, British band Radiohead shocked the music industry by releasing their album "In Rainbows" under a PWYW model. Fans could download the album from their website and were free to pay anything they wanted, or even nothing at all.
Humble Bundle: Humble Bundle is an online platform that sells bundles of video games, books, software, and other digital content. Customers can pay what they want for these bundles, and even choose how their payment is divided between the creators, charity, and the platform.
Humble Bundle, Inc. is a digital storefront for video games, which grew out of its original offering of Humble Bundles, collections of games sold at a price determined by the purchaser and with a portion of the price going towards charity and the rest split between the game developers.
Dynamic Pricing allows businesses to alter prices based on algorithms that take into account competitor pricing, supply and demand, and other external factors in real-time. Uber uses this model, increasing prices during peak hours. For startups, this model offers the opportunity to maximize revenue during high demand periods."
Tokenization is a new model made possible by blockchain technology. Companies issue their tokens to represent value or utility within their ecosystem. These tokens can then be traded or used within the platform. It's a promising model for blockchain-based startups."
Filecoin: Filecoin is a decentralized storage system that lets anyone sell their extra storage space. It has its own cryptocurrency, FIL, which clients use to pay for storage and which storage providers earn for their services.
Binance: As one of the largest global cryptocurrency exchanges, Binance issues its native token, BNB. It is used to pay transaction fees on the platform, participate in token sales, and more. By holding BNB tokens, users may receive benefits such as fee discounts and voting rights.
" In the API-as-a-Product Model, businesses offer APIs as a primary product. Companies like Stripe provide businesses with a suite of APIs to facilitate online payments. If your startup is in the tech sector, this model can provide significant value to your clients."
" Finally, there's the Data Monetization Model. Companies collect, analyze, and sell user data to generate revenue. Facebook, Google, Twitter, Nielsen, and Acxiom follow this model, providing invaluable insights to other businesses. In a data-driven world, this model can prove incredibly lucrative.."
Let's look at Amazon, a company that started as an online bookseller and has now diversified its revenue streams into areas like product sales, subscriptions, digital media sales, and advertising."
Take Amazon, for instance. Amazon started as an online bookstore, employing a simple product sales model. However, as the company expanded, its revenue model evolved. Today, it's a complex multi-stream revenue model, encompassing product sales, subscriptions via Amazon Prime, digital media sales through Amazon Music and Prime Video, and advertising.
Conversely, Facebook, being a social networking service, cannot employ a straightforward product sales or subscription model. Instead, Facebook offers its platform for free to its users and monetizes its user base through targeted ads. Advertisers pay Facebook to display their ads to a specific, targeted audience, making up the bulk of Facebook's revenue.
YouTube has become one of the most popular and influential platforms for content creators and viewers alike. As the largest video-sharing website, YouTube generates revenue through a variety of revenue streams: including advertising, channel memberships, live streaming, and merchandise sales. Through its robust advertising business, YouTube is able to capture vast amounts of user data that it then uses to optimize ad targeting and revenue generation.
ByteDance, TikTok's parent company, has an innovative revenue model where users purchase virtual gifts for content creators. The company then takes a percentage of these transactions. This model encourages user engagement and helps to retain top content creators."
Peloton sells exercise equipment and provides subscription-based workout classes,
" Betterment uses a robo-advisory model, providing online financial advice and asset management services based on algorithms. This has allowed them to provide their services at a fraction of the cost of traditional financial advisors.."
We strive to optimize every dollar you spend, save, and invest with us. Our technology manages your money and aims to helps you earn more.
“In the years when we [Martin Basiri and his brothers] were international students, we were helping other students with their applications and stuff. Years passed by, and we graduated and were doing different things. In 2015, we decided to do something. We thought why don’t we automate the application process to the level that we can so we can help more students? We had learned lessons from the obstacles faced in our own student journeys. And ApplyBoard was founded!
"In conclusion, understanding your customer, market, and product/service is crucial in choosing the right revenue model. Your revenue model is a reflection of the value you provide to your customers, and as startups, we should not be afraid to think outside the box. Remember, flexibility and innovation are key."
Thank you for your time. I hope this presentation has provided you with valuable insights into the world of revenue models. and I'd be delighted to answer any questions or engage in further discussion. Let's open the floor for a Q&A session.