The Board Of Innovation » commission

Yes, We Are Fans Of Kiva’s Business Model!

Philippe — Fri, 21 May 2010 06:52:14 +0000

As many other entrepreneurs these days, we feel that sustainable development is an integral part of being an entrepreneur. Our aim in this is to support simple but effective initiatives; in the mindset that many small intiatives can make a big impact. In that perspective, Board Of Innovation started to support women entrepreneurs in Asia and Oceania through Kiva loans – Sina Pele from Samoa, and Jocelyn Melanio from the Philippines. We wish them all the best with their plans, and invite all our readers and fellow-entrepreneurs to support entrepreneurs through Kiva as well. Also, special thanks to our business partner Christian De Neef of Fast Track to remind us about Kiva recently. When using the system, I was again surprised about the strenght of Kiva’s business model, and couldn’t resist to visualize it. The 1st flow of transactions shows how loans are given to entrepreneurs, through Kiva’s Field Partners. The Field Partners are in-country based microfinance institutions that approve and disburse loans, and then upload the loan and entrepreneur’s profile on Kiva’s platform.

Lenders like you and me can browse those entrepreneurs’ profiles and choose someone to lend to, using credit cards or PayPal. Unlike other broker platforms, Kiva doesn’t charge a fixed commission on transactions (100% of the loan goes to the entrepreneurs). Kiva lenders choose an additional percentage that want to give to fund Kiva’s costs. The 2nd flow of transactions shows how entrepreneurs repay their loans, and what options lenders have when they get repaid.

The total value of loans made through Kiva amounts to $134,575,785 now. Also interesting to note is that PayPal provides Kiva with free payment processing. Kiva’s is actually the first account at PayPal with a free payment processing agreement. Have you used Kiva or similar funding systems before?

Special note to our Dutch and Belgian friends:
We are running an innovation battle at BelgieVsNederland.be and NederlandVsBelgie.nl. Get your inspiring reward with just 6 questions to answer.

Thanks! @nickdemey & @philderidder

Can You Auction “Exposure” Via Twitter?

Philippe — Tue, 20 Apr 2010 11:22:29 +0000

That is what Auction4Tweets.com intends to do. Increasingly, exposure is a new currency where people can pay with, or get paid for; similar to attention. Previously we discussed Hollrr.com, which rewards early-adopters for giving exposure about new products that they like. Along the same lines, Everyday Models enables you to get paid giving exposure to brands on your clothes, car or online profile; and Posse let’s you promote music events online and get paid for your effort. The different examples show how exposure is a new, valuable currency that can be exchanged for goods, services or cash. Shall we try out the Business Model Drawing Tool? Click on the visual model to go to Auction4Tweets’ editable business model. Sign in at Google if not signed in already, and add your changes, questions and comments!

How does auctioning exposure work at Auction4Tweets? Let’s say I want to reach@nickdemey’s followers on twitter. @nickdemey can auction a tweet to his followers (exposure) for which I can bid together with everyone else. Let’s assume I have the winning bid offering @nickdemey 1000 points. My tweet is then sent to his followers, and @nickdemey gets 1000 points which he can cash for $2. Points are the system’s virtual currency. As you can buy 400 points for $1, yet need 500 points to cash $1, Auction4Tweets seems to take a commission of 20% on each sell (and the remainder of the money which is never cashed out of the virtual currency system). Auction4Tweets launched only yesterday, and probably won’t be the next big thing. On the other hand it’s another experiment in the interesting field of selling attention and exposure.

Flattr.com – a revenue model for online creators

Nick — Mon, 15 Feb 2010 20:52:24 +0000

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.

Kickstarter.com – community funding of extraordinary projects

Nick — Tue, 09 Feb 2010 23:52:24 +0000

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.

Nexicon, turning fear into cash

Nick — Mon, 29 Jun 2009 21:37:10 +0000

The business concept of Nexicon is quite exceptional. Their monitoring service tracks down IP’s of illegal content distributors on bittorent and other peer-to-peer networks. I suppose that this service towards copyright owners like movie studies and record labels can be bought with a some form of subscription. Once identified Nexicon’s system will automatically send out a settlement agreement to the ISP who has to forward it to his own client. In such a letter Nexicon threats with legal action if this distributor doesn’t choose to settle within 10 days by paying 10 dollar per illegally shared item. Nexicon will take a commission on each transaction. Although 10 dollar is far less then normally asked in settlement agreements it can generate an reasonable profit for Nexicon if they are able to track down these p2p-users in large amounts.

‘Experiences’ as we use it in our business model framework are characterized by the emotional impact on a user. Contrary to other ‘experience’ sellers Nexicons tries to offer such a negative experience (fear) that will convince a user to pay a small amount of money. An example of the opposite would be a pay-what-you-want restaurant that tries to offer such a pleasant experience in order to receive a reasonable payment from each client. In the end this shows that you as company should take control over the experience of your customer, even when this is a negative one.

Super Chirp Launches Freemium Twitter Model

Philippe — Mon, 08 Jun 2009 19:25:42 +0000

Get paid to tweet! Yesterday Super Chirp was launched as a tool for twitter users to get paid for their content stream. The application allows twitter users to send direct messages to people who pay to subscribe. Adding new vocabulary, a ‘chirp’ is a direct message sent via twitter to a paying subscriber. Any twitter user can sign up for Super Chirp with his or her existing twitter account (unlike twitpub), and set a monthly price between $0.99 and $9.99. Subscribers pay the small monthly fee for a stream of information. Super Chirp keeps a cut of 30%, leaving 70% for the publisher.

We have touched upon twitter’s monetization before with 77 Ways Twitter Could Make Money. Super Chirp illustrates how 3th party apps are monetizing twitter’s free service by offering paid premiums. Why does twitter refuse to enter the arena? From a user perspective, Super Chirp is another new tool for ‘prosumers’ and organizations to earn money. Think of celebrities (f.e. Britney Spears), stock tips, “the funniest guy on twitter”, horoscopes, charity, authority bloggers, early info… Do you have something unique to sell in small messages?

Timebridge: In-App Commerce to Challenge Advertising

Philippe — Sun, 07 Jun 2009 22:03:28 +0000

As previously described on In-Game Selling, companies are moving from advertisement based revenue models to in-app commerce or in-product selling. Timebridge.com is an excellent example of the same principle. Timebridge offers a scheduling service enabling people to collaboratively determine when to meet, also on mobile. Their actual revenue model is the resale of online and phone meeting services. This is not a freemium model, as Timebridge does not sell a premium of its own product. It is not an advertising business model either, since Timebridge is not earning on selling its users’ attention to advertisers. Timebridge’s business model consists of offering its users a free service that serves as broker platform to resell 3th party (meeting) services with commission.

A lot of free products and services go with a freemium or advertising strategy, but advertising is not sustainable for a number of reasons. In-app commerce, or broader, in-product selling is there to challenge advertising. Micro-payments will be a crucial facilitator in getting consumers to actually paying for content again, in times where people are used to free and ad-supported. Like Timebridge, in-game selling, blogs with jobs/widgets/affiliate programs… can your product or service offer a channel to sell and buy things? Sales people earn more than advertisers, don’t they?

Pitcharena.com: How to make money online via social apps? 2/4

Nick — Tue, 26 May 2009 20:56:20 +0000

During the most recent edition of Pitch Arena, we presented our business model framework to the entrepreneurs and start-ups that were present. The concept of Pitch Arena is rather straight forward. Several start-ups present their new venture to an audience of innovators and technologists in order to get valuable feedback and meet interesting people. We didn’t pitch our platform but fueled to the Q/A session with our view on the business models of the 4 presenting start-ups. With the theme of this Pitch Arena being ‘Social Applications‘, we clearly distinguished four different models being used. Let’s have a look at two of them today.

Wantz.it : dowant!

Wantz.it offers a simple wish list service to their users. People can easily submit products and services they wish to receive to their list by tagging web pages via twitter, facebook or via their own wantz.it page. Then Wantz.it gives those users different means to actively spread/expose their wish list to their friends. When such a friend decides to buy a gift after clicking on an item in the wish list, a part of the money will be sent towards the wantz.it company as a form of commission.

Tweetag : Twitter clouds!

Tweetag‘s social app gives users the possibility to create specific tagclouds. The first part of their service is a form of donationware. When used in a non-commercial context, Tweetag asks for a donation fee. The biggest revenue is planned to follow from a second revenue stream though, as commercial companies will be charged when adding a cloud on their web page. While there might be limited value in knowing what everybody is talking about, it could be very interesting to see what a specific group of people is saying. A newspaper for instance could wish to add a tweet cloud to give their readers insight in what a selection of politicians is tweeting all day. By doing this tweetag creates value.

Online Auctions: From Products (eBay) to Experiences (Sweemo)

Philippe — Sat, 02 May 2009 14:14:38 +0000

eBay has pioneered the concept of online auctions where people buy and sell goods from and to each other. As discussed in How to build any business model with only 10 blocks, companies can change a business model by moving from products to services or experiences – keeping all other transactions the same. The evolution of online (peer-to-peer) auctions is an excellent example:

Online product auctions: eBay.com

Online product auctions like on eBay.com bring together buyers and sellers, and take a listing fee or commission on successful transactions. This is a straightforward example of the broker business model, which in principle does not change when moving to transacting services or experiences.

Online service auctions: Zilok.com

On Zilok.com people can rent anything from anyone, from a nice heater to party cooking gear. The transaction is not the ownership of a product, it is the service to use it for a period in time. Myngle.com is another example of online service auctions, bringing together teachers and students on a global language marketplace.

Online experience auctions: Sweemo.com

As a next step, Sweemo.com enables people to buy, sell or swap special experiences or “sweet moments” (after which the UK-based start-up is named). In their own words: “Sweemo is the live auction community where people come to trade real-life experiences”. The auctioned experiences range from a role on a soap opera to an exclusive safari, a backstage pass or a look behind the scenes of a reality show. Experience sellers pay a commission on the final selling price.

From In-Game Advertising to In-Game Selling: The Next Big Thing?

Philippe — Tue, 17 Mar 2009 18:37:28 +0000

While In-Game Advertising is growing to $2 billion in 2012, In-Game Selling has all the ingredients to become the next big business model innovation in the gaming industry. Our analysis of the business model behind in-game advertising discussed how game publishers sell the ‘attention’ of their audience to advertisers. The next step now is to go from ‘attention’ to ‘buying’, or from in-game advertising to in-game selling:

In-Game Advertising: gamers will see in-game references to a Pizza fast food chain, but still need to pick up the phone or surf to the website in order to order pizza delivery.
In-Game Selling: there is a Pizza delivery icon, shortcut or location in the game environment, where you can order a pizza just by a click of the button. Example: While playing EverQuest II just type /pizza and a web browser will launch the online ordering section of pizzahut.com. Fill in your info and just kick back until fresh pizza is delivered straight to your door. Domino’s Pizza announced similar ambitions.

In-Game Selling business model

Where previously the game was just a standard product or experience, it is upgraded with a sales channel for other products and services (f.e. pizza delivery). The game actually offers a platform to bring together buyer and sellers, and brings benefits to both, which we know as a brokerage service. Similar to other brokers, game publishers can charge a listing fee to the seller, and/or a commission per transaction. The generic principle here is very valuable: could your existing product or service offer a channel to facilitate specific buy/sell transactions? Which goods or services are your users interested in? Which sellers are interested in your users?

In-Game Selling is a specific example. Any suggestions for a good generic name for this new business model? In-Product Selling, Free+Reseller = Freeseller, In-App Commerce…?