

The Young Man's Business Model - zinxq
http://paultyma.blogspot.com/

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angstrom
Best nugget of truth: The best business model is one that makes your customer
money.

From my personal experience eyeballs and race to the bottom savings never work
in your favor unless your'e YouTube or WalMart.

~~~
jharrison
Maybe I'm just old (and by old I mean almost 40) but this is the only business
model that has ever made sense to me.

I'm obviously impressed with the Facebooks and the HotorNots and everyone else
who manages to make a truckload of money without any actual product or service
(that I can identify the value in anyway), but I can't ever seem to get
interested in doing "business" that way.

For me, if you don't actually have a real customer, or what you're doing
doesn't make them money, then what have you built? It doesn't sound like a
business to me...but I might just be old.

~~~
wanorris
In the hacker world, there have always been people who try to make things that
they think ought to exist, regardless of whether they can figure out how
people will pay them to do it. On one end of the continuum, you have projects
like Linux (and the original Unix), Lisp, Perl, Python, Apache, and so on --
projects where the originators never really worried about monetizing the
result at all. On the other end of the spectrum are things like Facebook,
Twitter, and Google, where the originators always planned to find a way to
make money, but didn't worry too much about the details until they had
developed a product that a lot of people wanted to use.

In any case, there are an awful lot of businesses that don't make their
customers money. Consumer products, retail, mass media, home construction,
automobiles. Making your customers money is basic in business-to-business, but
unless I'm missing something, it's rarely a core part of a business-to-
consumer model. Perhaps it's B to C in general that you're not comfortable
with?

~~~
skmurphy
Business to consumer media businesses makes the advertiser money, in that the
increase in sales revenue should exceed the cost of advertising or they won't
keep buying ads. The other consumer businesses you cite--consumer products,
retail, automobiles--are typically sold through distribution, and the
distributor makes money on the markup. Home construction is somewhere between
a service and a craft business.

~~~
wanorris
Well, yes. But that isn't always the most useful paradigm for thinking about
some of those businesses, and it doesn't always apply. When I go buy an iPod
at an Apple store, what customer makes money off the purchase? When Safeway
sells me a pork roast, what customer makes money off the purchase? When I
subscribe to a premium account at ESPN, is there a customer that makes money
off the purchase?

For manufacturers, it is certainly important to develop a value proposition
for distributors and retailers. For ad-driven media businesses, it is
critically important to develop a value proposition for advertisers. But it's
at least as important to make something that people want. If you have a
product that nobody wants, it doesn't matter how good the retail markup is. If
you have a media property with no eyeballs, what good will really brilliant
advertising packages do potential advertisers?

~~~
skmurphy
A media business is driven by the ability to deliver a well characterized
audience, and the value those characteristics imply to advertisers.

The challenge is not a media property with no eyeballs. The challenge is what
audience can you gather to sell to your advertisers. If they are
undifferentiated then you have to have millions because they are not of much
value. If it's presidents of Fortune 500 firms then you only need an audience
of a few hundred to be able to make a lot of money.

So I would suggest it's not "people" but a well characterized audience at an
acquisition cost that allows you to mark them up to your advertisers who will
in turn make more money from the purchases your audience makes.

The YC mantra of "make something people want" gets interpreted in ways that
cause a lot of startups to overlook the value of a niche focus.

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wmf
zinxq: Permalinks are good.

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tptacek
Gender bias much?

~~~
jcl
He explains the source of the term in the article: an observation of a
specific, real-life experience -- the "young man" way to repair a motorcycle
versus the "old man" way to repair a motorcycle. It's not exactly his fault
that no old or young women showed up to help him and his friends fix their
bikes.

