Seven ways for Start-Ups to Monetize Business

monatize startups

Most startups emerge from entrepreneurs’ sheer passion to develop something that satisfies their creative inquisitiveness, and therefore they are often clueless as to how to monetize their products and services – or perhaps they end up developing something that is impossible to monetize. So now the question is how these creative geniuses can reap the benefits of their inventions, or what they must keep in mind from a monetization point of view. To answer this question I have compiled list of business models that can potentially be used by startups to monetize their business propositions.

1.SAAS Pay-As-You-Go or Monthly Subscription Model

Widely used in this cloud-based share economy, the self-service subscription model has become an instant hit among startups these days. Salesforce pioneered this model when they offered CRM services online to businesses without the need to install any software on their local server. These services are mainly pay-as-you-go, where users can avail themselves of services as per their usage (e.g. iTunes). However some business offer monthly subscriptions, where the consumer has to pay a fixed monthly cost for usage. (e.g. Hootsuite, & NetFlix)

2.Pay-per-click or Call to Action Display Advertising

This is one of the very old models and is mainly used by the publishing industry or businesses who have managed to build big communities. The idea is to build huge readership (e.g. Tech blogs like TechCrunch or web portal like Yahoo) for your content or create a community (like Facebook and LinkedIn) where users can engage with their friends, families, colleagues or like-minded people, and that helps service providers to understand their users’ intent and interest and to display advertisements and earn money on pay per click or call to action. (e.g. Facebook Ads)

3.eBay-Like Marketplace Model

This is an eBay model where businesses can facilitate transactions between buyers and sellers. This model can be complicated as the startup has to act as an intermediary, which means they have to make sure smooth of payment transactions, delivery, customer service, warranties and returns.

4.Affiliation Based on Price Comparison

Price comparison sites like GoCompare.com, Comparethemarket.com, Priceline.com and Kayak.com created a relatively new model among affiliate marketers where they compare a product’s price from multiple suppliers so that the consumer can choose the best one.

5.Data Licensing Model

In this API world, Data Licensing has become a very lucrative way to monetize your businesses. Usually these kinds of businesses have access to large public data from social networks and become aggregators like Gnip, DataSift and Rapportive.

6.Uber and WhatsApp like APP Economy

This is a reincarnation of the old client-server economy where users can download pieces of software (called Apps), especially on their smartphones and tablets, to play games , watch movies, go shopping etc. Just to give you glimpse of how big this economy is getting these days, recently, Uber (Taxi Booking App) and WhatsApp (direct messaging App) are valued around $17bn+ by their respective investor and buyer.

7.Amazon like Traditional Commerce

The old ecommerce still exists, where, like Amazon, businesses can sell products online. However due to a serge in smart phones and tablets, commerce is focusing very strong around the App economy.

The gist is that if you are building something you are passionate about, you must think of how you monetize your product from day one. It could be another Facebook, Twitter or call of duty game or eBay- or Amazon-like marketplace or retail stores or It may fell across several categories, as defined above, but the sooner you have an idea of how your venture will make money, the more likely is your chance of success.

Why is Google launching new products; and why isn’t Apple?

Google vs Apple

Synopsis
“Apple has failed to introduce new products recently and yet Google is launching a stream of products – This article looks into possible reasons.”

Apple recently bought “Beats,” making headlines around the globe and again put the company in the spotlight, triggering many debates about the future direction of the company. The overall verdict is that Apple may be losing its cutting edge advantage and have taken the routine growth route via acquiring companies like Beats and Topsy.

Whereas Google have lately launched many new products including Google Glasses, a self-drive car and Chromecast, which is a change from their traditional growth strategy under Eric Schmidt, when they successfully acquired companies like YouTube, Blogger and Android to expend their product range.

So, have Apple and Google gone into role reversal with Apple playing it safe to appease shareholders and Google trying to find the next big thing while their search engine algorithm has reached maturity?

Missing Steve Jobs or Playing waiting Game

I think probably the answer is yes, and we may need to accept the fact that without Steve Jobs’ drive, leadership and vision, Apple is lagging behind in introducing new products. Also, Apple might be playing waiting game this time, unlike in the smartphone launching war, where they took all the initiatives and then Google and Samsung copied those to build their own brands in that market.

Next Wave of Semantic Technology Not There Yet

Another reason for Apple to not to introduce new products might be the slow advancement in semantic analysis, which is going to help the next wave of innovation in smart gadget product lines. We still don’t have the technology to understand human emotions, graphics, speech and physical movements, and until we have a robust sentiment analysis algorithm, the next wave of smart phones, TVs, cars, watches, home or wearable technology may not be successful. The recent failure (or at best quiet response) to Google Glasses and Nike’s smart bands substantiates that argument.

Meantime Keep Cash Flow Momentum Going..

And in the meantime, until they are ready to launch a new product, Apple is doing what Google was doing seven or eight years ago, getting the momentum going by acquiring content and data companies like Topsy, and music content and hardware companies like Beats. Both acquisition will give content (plus data) to keep the cash flow rolling.

Google Needs to Find Next Big Thing after Search Engine Algorithm Peaked

On the other hand, as I mentioned above, Google have reached a stage where they have to find the next big thing after their search engine algorithm has peaked. Their efforts in social media (Google+ and Glasses) and mobile technology (Motorola mobility) are not reaping many rewards. They have therefore rightly gone the way of Apple in the late nineties, when Steve Jobs took over and launched multiple products like iTunes, iPod, iPhone, and iMac. Google’s recent product lines includes smart glasses, cars, watches, tablets, to thermostats and smoke alarms (after acquiring Nest), and they are also venturing into the space program.

So What Could Happen Next…

Now it remains to be seen whether this role reversal becomes permanent or leads the two companies in completely different directions (Apple becoming retailers and Google turned into an R&D Company) or causes a fall from grace like Yahoo, AOL or Microsoft to certain extent!