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Business Models for Startups
- 1. “ Boulevard of Broken Dreams” - But you’re not alone... April 2009 [email_address] twitter: @seedcamp
- 2. Business Models for Startups Think through a biz model early on; Don’t just build and worry about survival Lots of ways to sell valuable services. Find your ‘Best Fit’ The devil is in the details and secret to success in the execution – talk to other startups and learn from each other Seedcamp companies Of the 11 (13) startups; Mobclix (mobile ad-network), Kublax (freemium?), Basekit, Zemanta, Soup, Ubervu (Freemium), RMO (Subscription), myBuilder (marketplace), Kyko (Virtual goods), Toksta, Stupeflix (License)
- 3. Business Models for Startups A flavor of the popular and successful few: Advertising Freemium and Subscription Marketplaces and eCommerce License and SaaS Virtual Goods Graduated Business Models
- 4. Advertising Everyone There’s a lot of noise. Isn’t so dissimilar to the physical world Don’t rely solely on advertising
- 5. You have to pedal twice as fast to go the same distance data thanks to Advertising as a supporting Revenue stream; Blend with complementary models Look at verticals, lead generation , affiliate programs (eBay, Amazon), Mobclix (ad network + analytics subscription) Expedia (Marketplace), Business Week and NYT (Offline one-off and subscriptions) Startup examples – Zoombu (lead gen), Simply Hired (job seekers), Zemanta (Amazon affiliate)
- 6. Freemium Skype, Flickr, 37Signals, iMall, Freetailer, Freeservers Basekit, Box.net, Zemanta Pro Model: Offer basic services for free (features, use), drive users, and charge a premium for truly advanced features
- 7. Subscription Model: Straight charge for use of service. Can have promotional offers Salesforce, Amazon EC2, Gartner Slicehost (actually, fewer startups starting with a straight subscription model)
- 8. Marketplace & eCommerce Build a great marketplace and they will pay Or make and sell something people want
- 9. Marketplace and eCommerce Model: Mktplace - % of success fee, listing fee, subscription eCommerce - Acting as the merchant itself or agency There is a LOT of CONSISTENT Revenue to be made here Expedia (Merchant model),Net-a-porter, Zappos myBuilder, Rent Mine Online
- 10. Licensing and SaaS Model: License underlying technology or offering software as a service to customers SMEs – Distribution (Channel, channel, channel) Corporates – longer sales cycles, customization Big company: Livebookings, Meebo, Magnify.net, NetSuite Startups: Toksta, Stupeflix
- 11. Virtual Goods Model: Selling virtual gifts, furniture, in-game upgrades like weapons, online currency, etc Changeyou, Tencent, Second Life, Habbo Hotel Stardoll, Kyko, HotorNot
- 12. Graduated Business Models Blended business models that add further relevant revenue streams myBuilder – going from % of transaction to subscription to advertising/lead-gen Amazon – E-commerce to hosting to affiliate advertising Other models: Micropayments, Third party support models Consulting = NOT a business model b/c it’s not your core activity
- 13. Good Blogs/Resources http://startup-marketing.com/the-right-business-model-for-your-startup/ http://omalleyblog.typepad.com/infectious/2009/02/ad-based-startups-bad-idea.html http://500hats.typepad.com/500blogs/2008/09/startup-metrics.html http://www.avc.com/a_vc/2006/03/my_favorite_bus.html http://www.techcrunch.com/2007/06/20/virtual-goods-the-next-big-business-model/