business models for startups
Post on 12-Jan-2015
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“Boulevard of Broken Dreams”
- But you’re not alone...
April 2009reshma@seedcamp.com
twitter: @seedcamp
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 companiesOf 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)
Business Models for Startups
A flavor of the popular and successful few:
AdvertisingFreemium and SubscriptionMarketplaces and eCommerceLicense and SaaSVirtual GoodsGraduated Business Models
Advertising
Everyone
There’s a lot of noise. Isn’t so dissimilar to the physical world
Don’t rely solely on advertising
You have to pedal twice as fast to go the same distance
data thanks to
Advertising as a supporting Revenue stream; Blend with complementary modelsLook 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)
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
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)
Marketplace &eCommerce
Build a great marketplace and they will pay
Or make and sell something people want
Marketplace and eCommerce
Model:Mktplace - % of success fee, listing fee, subscriptioneCommerce - 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
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
Virtual Goods
Model: Selling virtual gifts, furniture, in-game upgrades like weapons, online currency, etc
Changeyou, Tencent, Second Life, Habbo Hotel
Stardoll, Kyko, HotorNot
Graduated Business Models
Blended business models that add further relevant revenue streams
myBuilder – going from % of transaction to subscription to advertising/lead-genAmazon – E-commerce to hosting to affiliate advertisingOther models: Micropayments, Third party support models
Consulting = NOT a business model b/c it’s not your core activity
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/
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