Most web2.0 companies struggle with issues of monetization. As I see it, you’ve got about 5 options:
- Sell attention (aka advertising)
- Sell relationships (aka partnerships)
- Sell content (aka syndication)
- Sell services (aka charge for access)
- Sell products (aka old-skewl)
Selling attention requires scale – big scale, because attention is so ephemeral these days people don’t pay much for it. Example: MySpace, Digg, Google.
Selling relationships requires relevance – tight connection to the partnering company. It also helps if the relationship with your clients is a deep one – clients are more likely to follow up on establish a relationship with your partner company if they already have a really good relationship with you. Example: Flickr and Moo (yummy awesome
business personal cards).
Selling content requires scale too, but also quality. And, unfortunately, a sales force, which means overhead. Example: BlogBurst.
Selling services requires infrastructure … real value that people can be convinced to pay for, and the demonstrated ability to deliver on them. Example: 37Signals.
Selling products requires meatspace infrastructure. Yuck. Much better to revert to selling relationships and outsourcing the production and transportation of atoms.[tags] web2.0, monetization, startup, venture, john koetsier [/tags]
4 CommentsLeave a comment
I would consider them one of the only true “web 2.0” companies, for the simple fact that they have a real service-based business model (not unlike 37Signals). I like how some of these companies are taking old concepts and innovating them or finding really niche markets and making them real profitable (Etsy = crafts). I’m surprised that nobody has tried to tackle Craigslist — it seems people are quick to use the “aggregator” style of listings, but 90% of the population doesn’t know what RSS (or aggregation) is.
“I would consider them” is in reference to Etsy.
Etsy is a great example.
[…] This post is a follow-up to my recent web2.0 monetization post. […]