Banking & professional services

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Already from the visual appearance of this model you’ll notice that Flattr tries to work in different way. Lots of us are enjoying all the free content brought to us by all the individual online publishers. Sometimes you would feel the urge to support these people. To do so you could make use of donate buttons, but still this process takes some effort. That’s where Flattr comes in with their structured approach to micro-donations. As a Flattr client you set your own monthly subscription fee. Then, while browsing/consuming online content, you are able to select your favorite publications. You can ‘flattr’ any type of content. At the end of the month your subscription fee will be distributed over all the people that you tagged (flattred) during that period. Initially Flattr.com will take a 10% commission but they are working hard to bring this number down.

Just like Hollr and Oronjo, this service is looking for a way to help people create their own micro-revenue model. If executed well this system could even replace the outdated business model of ancient royalty and copyright organizations. Without the need for complex distribution algorithms consumers can now pay creative creators directly for the work they consume online. You, and not a centralized monitoring organization, decides where your money goes to. I can’t wait for that day to come.

Banking & professional services

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You might be one of those people that walks around with a marvelous idea but never found an incentive (or pile of money) to start your project. But what if you could find a small crowd of people that could back your idea. A crowd that doesn’t only give you the needed support but that will actually co-found your dream. That’s exactly what Kickstarter has to offer. First, submit your idea and set a target goal. (e.g. 10.000 dollar). Next you need to convince people to donate a part of your funding. To do this you make a few promises. For instance: You wish to roll out a scarcely-dressed-ladies-sketch-club and you need 3000 dollar. Those who donate 10 dollar will receive a handwritten postcard. But those that donate 1000 dollar will get life-time access to all sketch events. And so on. Make the experience as personal and exclusive as possible. But be careful. If you don’t offer enough value for money to those who pledge, you might not reach your goal within the 1-90 day time limit. Once reached, Kickstarter will pay out the funding and will take 5% commission. Secondly they will earn on the cash that’s been in their possession for a few months*. If the target isn’t reached, the project will be canceled and people will get their money back*. Interesting revenue model isn’t it?
Kickstarter democratizes the funding business. Instead of strolling between friends, family and fools you can now reach out to the masses. Secondly the business model of Kickstarter truly embraces the business building blocks ‘experience’ and ‘exposure’. Paying backers with personalized products and services is a remarkable strategy. A third important aspect is the fact that Kickstarter helps their members to fully reach the different segments within a crowd of funders. Many people will pledge a few dollars while only few want to donate a large sum. This optimization of funding is what makes Kickstarter truly unique. Keep an eye on this start-up because they could really boom in 2010.

* update Feb 10: Andy Baio (CTO Kickstarter) points out in the comments that Amazon takes care of the payments. Thereby nobody is charged upfront so Kickstarter won’t earn on the few month of cash as mentioned above. It’s worth noting that some other companies that focus on selling voucher do strongly rely on these upfront payments. The Belgian company Bongo is such an example.

Consumer goods

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The busy holiday period is a good time to highlight one of the many charity based business models. The revenue model that is being used by these organizations is often not that complex. Many of them simply ask for a donation while others will give a commodity in return. A pencil, a plant, a newspaper and so on. But asking thousands of families for donations is labor intensive so when you’re trying to do something valuable, a B2B charity business model might be a better option. Freeset is such a company. They realize they are not in the product business, but in the reputation business. So when you’re selling the value ‘doing good’ the focus of your branding will not be the functionality of the product. Freeset sells Jute bags so they won’t last forever. But even this lack of quality is being used as positive feature. Using Jute makes Freeset bags biodegradable so that makes them (more) eco-friendly. Not only the product is focused on ‘doing good’. The business model of Freeset is build on top of a revenue model where the profits are being used to fight sex trafficking. Thereby the fair-trade business of Freeset is being perceived as People-friendly as well. So when clients are buying these event bags, they are ‘doing good’ and receive a platform (the bags) to show this to the world. Events itself are generally build to give companies opportunities to get exposure. And sadly it is exposure what you need when you are selling charity to businesses. Doing good, without anybody noticing, is economically not interesting.

Large companies that are trying to be eco-friendly, people-friendly and thereby claiming to do good are having a hard time online. When done right a profitable revenue model can be the result. Freeset is therefor a good example. But brands that are using charity or good causes as a marketing gimmick will be publicly crucified. See how even Apple is trying to coop with bad publicity on their green efforts. They make attractive products but being green is currently not their focus. Consumers have more power than ever. This forces companies like Apple to be more transparent on their efforts. But when you’re active in the ‘charity business’ you better do this over the top like Freeset. Eco-friendly, Fair-trade, People-friendly and so on. Do it and show it to your clients.

Internet & media

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Recently Scott Adam described an upcoming new way of doing business. He calls it ‘Broadcast shopping’. The main idea is that potential clients expose their intention to buy on an online platform. Clients can do this by describing their specific need or problem. On the other hand we would find companies that could provide a solution in the form of a product or service tailored to the specific needs of this person. They can send these customers their proposal, but so can other companies. Thereby this ‘request for proposal’ platform creates a reversed auction where companies are bidding against each other. In the end this should result in a better deal for the customer, like a lower price. Looking at the revenue model of such an internet platform, it [...] Continue Reading…

Internet & media

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The new German start-up Niiu will soon launch their interpretation of a modern newspaper. Niiu readers have the possibility to select the content section of their choice. They prefer for instance the front page of The New York Times, the politics section of Tagesspiegel combined with the economic section of Handelsblatt business and select no sports at all. By using print-on-demand technology Niiu will create a unique paper version and deliver that to your doorstep. Thereby they try hold on to the romantic feeling of paper, an experience that remains important for many readers. Users pay via a flexible credit system which results in a prices between € 1,20 and € 1,80 per newspaper. Next to this revenue stream, advertisers will pay a higher price per ad due to [...] Continue Reading…

Internet & media, Non-profit & public

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Many online content providers are struggling with their online business model. Nothing new of course. The same goes up for the scientific publishers. In contrast with the news industry where an off-line publication (newspaper) has a rather low price tag, scientific publications are valued at a much higher price. Therefore many of these publications are today locked behind webshops and not accessible to the public. Often the abstract doesn’t give enough information to convince people to buy the full article. DeepDyve tries to offer a solution for that. The scientific search engine now offers the possibility to rent full articles for 24 hours for only $ 0.99. The articles will be accessible online in a not distributable and printable format, at least that is what they are claiming. A [...] Continue Reading…