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On choosing a business model. Far too many companies rely on just getting users, and monetizing later. Of course advice from someone who has had success with b
by mixmax 18y ago
On choosing a business model. Far too many companies rely on just getting users, and monetizing later.
Of course advice from someone who has had success with both an advertising and a pay model would be the ideal, but lacking that I'll settle for advice from someone that has actually had success.
Come to think of it, I can't recall having read about a company that has had success (as in making enough money to live on within a year or two from launch) with an advertising model. I'm not saying it doesn't exist, just that it seems to be an outlier.
Charging for your products, on the other hand, is a well-proven model that has worked for hundreds of years. This is how the vast majority of companies generate cash. I just think it's refreshing to see someone that actually comes out and says it, instead of all this get-big-fast hype that only worls out well for an absolute minority.
- axod 18y agoIf you're in the UK, check out forums like http://www.affiliates4u.com/ http://www.affiliates4u.com/ There are hundreds if not thousands of users on there making a living out of affiliate marketing. I don't know of similar forums in the US, but am sure they exist. Also check out sitepoint 'websites for sale'. Quite often they include figures on revenue. Just scan down those and see how much they're making from advertising. It's just less news worthy so you don't hear about them - "Another website makes lots of money from adverts" - big deal. Also lots haven't gone the VC route so they don't try to court the press/blogs/etc quite so much. The issue I have with companies that get big with ad income as a model, is the massive amount they spend on servers, offices, tons of employees. If they kept lean they could be making a lot of money.
- mixmax 18y agoI just checked Sitepoint, and there are currently 17 sites that sell, or have been sold for more than $50.000. A salesprice less than that probably indicates you can't live off it. Of those 17 sites: - two are getting revenue from affiliate marketing - one is advertising porn - one has advertising income of $500 monthly - one has ad revenues of $3000 monthly. The rest sell actual products that they charge for. I still don't think advertising is a model that works well for most companies.
- axod 18y agoI did actually mean look at it periodically for a while and check out some of the sites that come up. You can't really take a single snapshot for a single day and draw any conclusion from it. That's like saying there haven't been any IPO's today, so IPO's aren't possible. Also it's probably slightly rarer to see profitable ad-supported websites actually come up for sale, since often they take nothing to run, so people hang onto them.
- tjogin 18y agoI agree with your general perspective; but also, I see obvious benefits to charging for one's product directly from the user; revenue increases as you grow, no conflicting interests or prioritisations between advertisers and users. What are the advantages to the advertising model from a business perspective? I see obvious downsides; ad placement is a careful balancing between frustrating/confusing your users and making money off of them. Costs aren't related to the useage of your product, etc.
- gnaritas 18y ago> Charging for your products, on the other hand, is a well-proven model that has worked for hundreds of years. I think you vastly underestimate (by many orders of magnitude) the length of time businesses have been successfully charging money for their products.