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Business Models or “Who Do You Want to Be in 2001?”

Business Models or “Who Do You Want to Be in 2001?”. Tracy Weatherby Weatherby@activeingredient.com 650-965-1050. What Business Models are Getting Funded?. Businesses that can project profitability from a proven business model within a couple of years “Monetizing” your idea.

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Business Models or “Who Do You Want to Be in 2001?”

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  1. Business Models or “Who Do You Want to Be in 2001?” Tracy Weatherby Weatherby@activeingredient.com 650-965-1050

  2. What Business Models are Getting Funded? • Businesses that can project profitability from a proven business model within a couple of years • “Monetizing” your idea

  3. What’s Not Getting Funded? • Everything else

  4. Models Depend on Your Business & Your Market • Software • Hardware • Content & Community • Marketplaces • Services • Support

  5. Software Models – Sell or license it • By the package (i.e., shrinkwrap) • Per processor • Per seat • Per organization • Utility or transaction model – pay as you go • OEM

  6. Software Models - Rent it • Subscription (Anti-virus software) • Pure ASP / MSP / BSP (USi, Corio, Applicast/Agilera, Portera) • Monthly service fees • With or without upfront costs • Monthly rental of enterprise software by the company who makes it

  7. Software Models - Give it away • Open Source / Shareware / Freeware • Sell the servers (Netscape Navigator, Adobe Acrobat) • Advertising (Driveway.com, Homestead.com) • Voluntary payments (McAfee) • Sell support services (Red Hat)

  8. Hardware • Sell it • Retail • B2B • Wholesale • OEM • Rent it or lease it • Give it away • Sell services or “razor blades” (Pitney Bowes) • Sell subscriptions (WebTV) • Sell advertising (Free PC)

  9. Content & Community • Sell it • Individual articles or items • One-time fee for total access • Rent it • Subscription (NYT.com) • Give it Away • Advertising (Yahoo – portals or infomediaries) • Direct marketing leads

  10. Marketplaces / E-commerce • Entities buy products directly from you (Amazon, Dell) • Seller pays (eBay, Classifieds) • Seller & buyers pay for access (Match.com) • Buyer pays (Buying Clubs) • Affiliate programs – others link to you (Amazon) • Build your own marketplace for the savings (auto companies) • Sell the software & services to build marketplaces (Ariba, CommerceOne)

  11. Services • Sell it • Per transaction (brokerage, on-line photos, etc.) • Rent it • Subscription (AOL) • Give it away • Lead generation (but for what?)

  12. Support • Per incident • Package of calls • Yearly maintenance contract as % of purchase price • Flat fee for yearly contract • Different prices for different tiers of support

  13. How do you transition models? • Carefully • Thoughtfully • Just once, if you can

  14. An Example • Great technology in a competitive market • First: Decided to become a software marketplace • After market crash: Became a services supplier to one end of the marketplace • After the 12/00: Went back to being a software service or product for which companies will pay

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