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Web Revenue Models (hackpad.com)
175 points by stickhandle on Dec 15, 2012 | hide | past | favorite | 22 comments

There's a best practice acronym for creating lists like this - MECE: mutually exclusive, collectively exhaustive.

I'm not sure this list passes the "mutually exclusive" test - for example, eBay fits into both the "marketplace" and "auction" category. "Freemium SaaS" is clearly a strict subset of "SaaS". Might seem like a minor quibble, but a categorisation system isn't very useful if the categories are all jumbled up.

I am wondering how you really apply MECE in a complex environment like this. Any suggestions on how to adjust the list so it becomes MECE?

I'm not sure. One first step would be to define whether you're talking about simply revenue models or business models. (I see revenue models as how you make money, wheras business models also incorporate elements like marketing. So "freemium" is a business model but not a revenue model, because being freemium doesn't make you money, but it does help you find customers).

I'd probably focus on pure "revenue models" as they're easier to define. Then you can ask: who pays you (all your users / some of your users / someone other than your users), how often do they pay you, and how much do they pay you? The benefit of this scheme is you can plot different revenue models on a 2-dimensional or 3-dimensional graph. Eg, if all of your users regularly pay you a little, you have a B2C subscription business. If someone other than your users occasionally pays you a lot, it's likely you're selling user data or high-end advertising. If your users pay you a one-off, medium amount, it's likely you're in ecommerce or equivalent.

I'd also look at the most frequently used revenue models first, because I think people are sometimes tempted to find "innovative" ways of making money when boring old banner ads would do better. Advertising, subscriptions and selling physical or virtual products seem to be the most proven business models. Affiliate marketing or transaction fees can work, but they're harder to pull off. Stuff like "selling user data", contrary to popular belief, only works if you really know what you're doing (I briefly worked on one of those "subscription food service" ideas with the bright idea of selling customer feedback data - turns out there's a ton of enterprise companies like BrandView already selling far more detailed customer data).

That kind of info is more useful imo because it actually helps people figure out a model that's more likely to work.

Just look for mutualy exclusive things:

Who gives you money?

  A) Users
    1) All users
    2) Premium users
  B) Company's that pay for groups of Users
  C) Advertisers
  D) Referral Programs
Are you subscription based or transaction based?

MECE is a good idea indeed for the list but It is clear that one company may have more than one item from MECE.

I hope you don’t mind, but I couldn’t stand reading that list and cleaned it up in a gist instead: http://pygm.us/cjvjHnCi.

The list itself is amazing and just what I have been looking for, though. :)

Credit should go to avc.com's Fred Wilson (http://www.avc.com/a_vc/2012/12/mba-mondays-revenue-models.h...) ... this provides a good map.

Do these revenue models need to be sustainable? I noticed 'Donations' is missing. An example could be Wikipedia, which afaik has donations as only revenue.

Some other opensource projects also fund parts of their development through donations, either from businesses or consumers.

It won't make you rich, but it might bootstrap you into some better revenue model.

Also awesome list, definitely saved for later :)

Wikipedia is in the list - under "Subscription", whatever that means. :)

It says the last update was five days ago, so I take it that you missed it. Either that or the "last update" feature is borked.

Odd choice of categorization. Subscription implies that if you're not paying you don't get access, in contrast to (recurring) donations where it's optional and more of a charity.

Eh oh that's strange, I didn't expect it to be under subscriptions so I just glossed over it I guess.

I can't really wrap my head around why the list is entitled (final). More like (abandoned). :P

Fred Wilson explains in his blog post,


that he wanted this "final" version to be edited by invitation only and wasn't sure how to make the change to the original version.

The page seems totally broken in Android. They need to turn off that "join the conversation" modal.

Trying to add something without logging in, it lets me type a few letters and then I keep getting this really annoying pop-up. Either allow people to edit without login or don't. This teasing is really frustrating.

Anybody can edit Wikipedia without logging in, why not this?

I don't know if this is an actual discussion or a "launch" for a site, but using page down just bounces you back to the top of the page. (Chrome beta, OS X).

Which ones have a higher revenueAmount/effortPutIn ratio?

That's one figure you will never see. First you have to quantify effort. Then, you need to get companies to reveal how much effort they put into each product or service. This ratio will be a closely guarded secret for companies, since it would let competitors understand the quality of the field.

The amount of effort you have to put in is going to be different than someone else. It would be a much better idea to choose something you are familiar with. Something you can can get excited about.

That is good advice but, I'm interested in knowing, which revenue models are known for generating higher amounts of money, generalising and removing the specificities of the people who might be implementing the model.

You and everybody else are interested in that. However, if that knowledge existed the list would probably be a lot smaller.

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