Online Business Models

Does a startup really need to raise venture capital?

I guess it depends on what its goals and values really are.

If you are after the magic opportunity to do what happens to one in a thousand startups when it is bought up by a giant company like Google, then you shouldn't hesitate to party down with the VCs. 

But if you are after creating something that has personal value for you beyond the money that it will make, if you want to keep steering the direction of your service and if you don't like to come down to many compromises, then be very careful about jumping on the VC funding train.

Here my own thoughts and ideas on why it is so important, for those in this second group, to avoid the funding dream and to go after a bootstrapping (and possibly crowdfunded) approach. 

Full article: http://www.masternewmedia.org/bootstrapping-startups-guide/ 

Tapfiliate is a new commercial web app which allows small publishers and online businesses to easily set-up and manage their own affiliate program.

The service integrates the ability to have new publishers sign-up as affiliates, to determine commissions (fixed or %), to provide the promotional materials and and affiliate links to use, and to set for how long tracking cookies will work.

Prices stat at $19/mo for up to 300,000 tracking events and with unlimited affiliates. 

I have set up an account and an affiliate program, and found everything easy and straightforward to set up. I'd recommend Tapfiliate for small businesses looking for an easy, reliable and simple to manage solution.

Pricing: https://tapfiliate.com/#pricing 

Try it out now: https://tapfiliate.com 

People are more than happy to sign-up for music streaming services, but when it comes to pay for access, very few feel it is something they want to do.

Pandora has for example 70 million users, but only 3 have decided to pay for the Premium version of the service.

While most industry players are attempting to have music fans pay for higher quality audio options and a no-ads experience, it is likely that the future of music monetization will not be anymore in direct music sales.

"Several analysts doubt that streaming companies can attract enough paying customers with only recorded music, citing a sharp drop in music sales over the past decade and abundant free music online. And they say it will be difficult for them to survive on advertising alone."

The key to survival for music producers, whether large or small, may be indeed elsewhere.

"...some see these companies’ success as lying in a so-called subsidy model, in which music sales support another business with higher margins.

Apple, most notably, used low-margin music sales to spur demand for iPods, phones and computers.

“Music is an accompaniment, to add to your jog, your workday, your prep in the kitchen,” said James L. McQuivey, an analyst for Forrester Research. “But it’s not something you’re eager to pay for if you don’t have to.”

The likely outcome is, as it is already happening, that monetization will come from everything that ranges from events, to merchandising and to collector's items. 

Informative. 7/10

Full article: http://www.kansascity.com/2013/12/13/4691034/a-stream-of-music-not-revenue.html 

(Image credit: Woman listening to streaming by ShutterStock)

To build a new business online, it may prove quite effective to develop minimum viable products of the services your community is asking for, before moving all of your resources and money to build a full-featured and complete version.

Vladimir Blagojevic has curated a selection of seven useful minimum viable products that have been already created, as to provide an inspirational reference to anyone wanting to embark on the same journey.

"A minimum viable product is “that product which has just those features and no more that allows you to ship a product that early adopters see and, at least some of whom resonate with, pay you money for, and start to give you feedback on”.

For each one he has provided a good description of the real-world example, a screenshot and good story-description of how the minimum viabe product was put together.

Resourceful. Instructive. 8/10

Full guide: http://scalemybusiness.com/the-ultimate-guide-to-minimum-viable-products/ 

Abizmo is a free Business Model Canvas generator. Easy and intuitive to use, it auto-saves your work and works great on the iPad.

To use it, you leave your name and your email and then you get two links: one to a private editable version of your BMC and the other to the public version.

Free to use.

Try it out now: http://abizmo.com/ 

Peakium is a commercial web servive which makes it easy to customze and manage recurring subscription payments while allowing online sellers to offer multiple alternative payment solutions.

Tara Hunt, has an interesting article spotlighting the fast growing importance that curators are gradually gaining on the Internet and on the subsequent need to find ways for properly compensating original content creators.

She writes: "...while creators are necessary and amazing, curators are the ones raking in the dough.

I was alerted today by a friend that a video that Carlos and I made for Vine that had become super popular (over 118,000 likes + 77,000 Re-vines) was featured on a Facebook page called Best Vines and making its way around (with over 230,000 likes + 46,000 shares). The page owner lifted the content off of Vine and reposted it on his own page (no credit back to the original). This page has over 6.2M likes.

Now, this video of Ridley took us all of 30 seconds to make and we had no idea it would ‘go viral’, but for people like Will Sasso who appears to make it his full-time gig to make entertaining, engaging content on Vine and other places, this would probably be a bit of a violation. 

The curator is getting more cred for recognizing good content than the creator is for making good content."

And she is definitely right.

But as she correctly points out, there are already effective solutions in place, such as the YouTube authorship claiming facility which allows for original creators to digitally mark their own creations while giving full permission to curators to leverage and re-distribute them. This YouTube approach is the one that makes it possible for content creators to receive a share of the advertising revenue coming to YouTube, even when their clips are curated and played back on other sites.

The opportunity is there, not just for textual content, but also for video, music, photography and all of their sub-categories to be curated and monetized for the benefit of everyone.

Insightful. 8/10

Full original article: http://tarahunt.com/2013/07/20/creationcuration/

The Atlantic launches this week a paid, weekly curated selection of its best stories called the Atlantic Weekly.

From AdWeek: "The Atlantic Weekly will collect the week's best stories from TheAtlantic.com, The Atlantic Wire and The Atlantic Cities, as well as selections from its In Focus photo blog and an article from the magazine’s archive (reproduced as it originally appeared in print), reformatted as a magazine for the iPad and iPhone.

...will cost $1.99 for a single issue. Readers can also subscribe for $2.99 a month or $19.99 a year."

The reason for choosing this new direction sums up to this confession from editor in chief James Bennet: "Our concern has been that some of our better [online] pieces can get lost during the week, and that we’re not serving our readers as well on the weekend when there is time to lean back and digest a good idea."

"...will users pay for a magazine filled mostly with content that they can access for free on the Web?"

What do you think?

Original reporting from Adweek: http://www.adweek.com/news/press/atlantic-launches-paid-product-150392

Pivotshare is a web service that allows any author or independent publisher to create a professional-looking video venue where to showcase, organize and (optionally) sell access to video and audio content.

Video channels created on Pivotshare will have a personalized URL such as robingood.pivotshare.com, and you can further brand the channel with your selected profile picture or logo and your favorite background.

Video channels can be displayed as "showcases" or "libraries" depending on the quantity of material you have available, can be embedded on any web site and can be easily viewed across all types of screens and devices, from desktop to mobile.

On Pivotshare you can upload directly .MP4, .MOV, .SWF, .FLV, .AVI, and .MP3 files and organize them into discrete collections. You can add names, descriptions, relevant tags as well as decide how you want to make this material accessible.

You can for example let everyone see freely certain content, while at the same time making a "tip jar" facility available and setting your preferred minimum tip level. Or you can decide to set a "monthly subscription price", rather than a "rental" or "purchase" fee.

Check this image to get a better idea: http://o7.no/15Mgscw

It is also possible to invite and collaborate with other authors / publishers contributing all to the same video channel.

Pivotshare is definitely a gret solution for independent authors and publishers, who are looking to start their commercial video channel online with the minimum effort and the maximum of results.

There are no costs involved. Pivotshare keeps a fixed percentage of your incoming revenues (unclear how much exactly).

Free to use.

More info: http://www.pivotshare.com/

Try: http://www.pivotshare.com/try/

Channel examples: http://www.pivotshare.com/#featuredchannels

How can content curation in a niche information area be monetized? Ask Joe Wilkert.

He writes: "There’s too much content out there anyway and I certainly don’t need access to even more of it. What I really need is more curation and less volume.

I want someone else to read it all and then tell me what I absolutely need to read.

They act as a filter and I pay them because they save me time and make me smarter."

The article points to the added value that traditional content publishers can offer their readers by opening the gates to community curators, who, by doing what they like the most, can bring back lots of more subscribers and attention to their brands.

"...There are sports experts, business experts, local community experts, etc. These curators are reading everything you’re publishing and picking the best of the best... They in turn publish their lists to a whole new set of subscribers; these readers pay for access to only the content recommended by the curator, not the full editions.

The best curators float to the top and drive more subscriptions than the others and you pay them a commission for each subscriber they bring in. Curators establish brand names for themselves, as in, “hey, if you’re into travel you need to subscribe to Bob Thomas…he finds all the best travel articles so I don’t have to.”

But there's more, as Mr Wilker points out. The opportunities don't end there.

Rightful. Recommended. 8/10

Full post: http://www.olivesoftware.com/3/post/2014/04/-community-curation-by-joe-wikert.html 

Reading time: 3' mins.

See also: http://jwikert.typepad.com/the_average_joe/2013/06/curation-and-personalization-not-discovery.html 

Image credit: Honey dripping by Shutterstock

Rachel Chalmers illustrates five key reasons why it may not be such a great idea to get your startup funded by venture capital.

These include: 

1. Not getting a fair hearing
   
   
2. Rising capital means losing the YOU and giving in to financial interests as the primary drivers
   
   
3. The majority of VC funded companies will not ever generate any venture success
   
   
4. You are not going to have full control anymore
   
   
5. Venture math is a harsh mistress 

Key advice: VCs are optimizing for a very specific outcome (making a large as possible profit fast). Share that alignment, or don’t take their money.

Chances to convert a startup into a VC-funded success, are not very high, if you look at the numbers. But worse than that, is what you have to endure and give up to achieve that goal.

Useful. 7/10

Full article: http://modelviewculture.com/pieces/five-reasons-not-to-raise-venture-capital 

Reading time:  7 mins.

See also: http://www.masternewmedia.org/bootstrapping-startups-guide/ 

Switchads is an automatic auction ad platform that allows you to have multiple ad networks compete for your the minimum CPM price that you set.

For example if you are running Google ads on your site you can activate SwitchAds easily and your Google ads will be replaced with alternative and higher paying ones, only if there are advertisers meeting your minimum set CPM.

In their words: "Using SwitchAds unique technology, we provide your website with access to increased advertiser budgets by getting them to bid on your inventory in an auction. This increases the competition and price for the advertising on your website."

In this way your risk is zero and you can only possibly gain some extra revenues.

Switchads makes money by adding his small commission on top of your minimum set CPM revenue. 

You can check stats and revenues in real time.

N.B.: I am currently testing Switchads on the top banner space of MasterNewMedia but I have too little data to yet express an evaluation. 

The only drawback I encountered has been setting my minimum CPM in British pounds.

Free to use.

Try it out now: http://switchads.com/ 

How it works: http://switchads.com/index.html#how-it-works 

FAQ: http://news.switchads.com/frequently-asked-questions 

Vincenzo Marino does an excellent reporting job on the International Journalism Festival news site, by summarising and distilling the good stuff emerging from an interesting and sustained debate on Twitter (Business Models for Journalism - Storify) on the state of online journalism and its potential future business models, initially kicked off by entrepreneur and Netscape co-founder Marc Andreessen.

Among the highlights, what Andreessen calls “the most obvious eight business models” for now and the future:

1. Quality journalism for high-quality ads

2. Succeeding in making readers subscribe and pay for value products

3. Premium content worth buying

4. Relying on live conferences and events

5. Investing across multiple channels

6. Crowdfunding ("Gigantic opportunity especially for investigative journalism")

7. Offering the option to pay in Bitcoin for micropayments

8. Keeping an eye on philanthropy (like ProPublica and Pierre Omidyar's First Look Media)

One stratospherically important point to take home from this valuable roundup is the following: 

"The role played by quality, however, is crucial especially when analyzed in the light of the tendency of the market to expand, creating less accurate content.

The challenge is to make a product (or brand) a point of reference, a lighthouse in the night of uncontrolled content and viral hoaxes."

Informative. Resourceful. Insightful. 8/10

Original article: http://www.journalismfestival.com/news/state-of-the-media-and-possible-business-models/ by Vincenzo Marino 

Reading time: 12 mins.

From the original article by Mark Mulligan: "Subscriptions are clearly the best product set media companies currently have for monetizing the consumption era.

For the music industry they continue to raise as many questions as they answer, but for books they might just be the ticket to genuine digital prosperity."

Here's a few reasons why:

Book Subscriptions Offer a Much Clearer Path to Additive Revenue than Music - because books take longer to read than a CD does to listen, authors and publishers should see greater revenue margins.

Per-reader value versus per-title value - If an author or publisher is simply think in terms of 1 sale becoming 1 rental then it is a net-loss scenario. But if just over twice as many people read the book then it is a net-gain scenario. The more people that subscribe and the more that read more books – the Consumption Quotient -the more likely that subscriptions will become additive rather than substitutive.

The author also suggests that the book industry has a key advantage in that it can learn a lot from the mistakes already done by the music subscription industry and can avoid repeating them by paying attention to a few key elements such as:

• Transparency
• Curation
• Discovery
• Pricing
• Video and multimedia native support

Insightful. 8/10

Full article: http://musicindustryblog.wordpress.com/2013/09/11/what-the-music-industry-can-teach-book-publishers-and-authors-about-subscriptions/ 

(Image credit: Subscribe road sign by Shutterstock)

The Business Model Gallery is a growing database of curated business models canvases gathered from a diverse set of companies operating in different sectors.

For each company you can analyze its updated "business canvas" in which you can see at a glance the key value propositions, its partners, revenue streams and all of the other key business building blocks.

Business models can be easily searched, filtered and compared across specific building blocks you are interested in. 

Coming up are also a PDF and PowerPoint export option as well as a dedicated iPad app.

A free trial is available and pro plans start at $9/month and go up all the way to $29/mo according to the number of features you want to use.

My comment: The Business Model Gallery offers a truly excellent gallery of valuable business models which can be extremely useful for anyone studying, researching or working on creating a successful new company.

Furthermore this is a great living example of how, curated collections of best of breed examples, are going to have a go as very useful business services in the coming months and years.

Free for the first three months: http://businessmodelgallery.com/ 

Features: http://businessmodelgallery.com/features/ 

Pricing: http://businessmodelgallery.com/packages/ 

To learn more about the canvas and its 9 building blocks, visit www.businessmodelgeneration.com

From the official site: "Vourno.com provides journalists (Vournos) with the tools to raise capital for the creation and production of quality, newsworthy content and gives the public (Pubs) the ability to directly fund, share, watch and rate those stories."

Successfully funded projects are produced and premiered on the Vourno online network.

Here's how it works:

1. Video journalists (“vournos”) propose a video story they want to create (“Video is where everybody’s going,” Verdirame said).

2. Members of the public (“pubs”) browse the stories they want to fund and help publish it by donating. They can also pitch their own stories they want to see published for a vourno to pick up.

3. Vournos gather enough funds from pubs to pay for their salary, equipment, travel expenses and any extra team members they may need (editor, videographer, etc.)

4. The vourno gets a certain amount of time to complete the story and publish it on Vourno’s website for all to watch and share for a week before selling it elsewhere.

5. More popular, original and in-depth reporting will get more play on the website, and more sharing means more revenue through advertising — which eventually will be shared by vournos and pubs.

(Source: Zach C. Cohen - Idealab)

Find out more: https://www.vourno.com/

How it works:

https://www.vourno.com/vournos-how-it-works

https://www.vourno.com/pubs-how-it-works