Written on September 6, 2008 – 9:04 am
Guest blogger, sharing views on The Next Web
This is a guest post by mobile marketeer Peter Evers based in London who frequently blogs about mobile on peterevers.net.
After working in mobile marketing for quite some time, recently a friend challenged me to think of a business plan for his mobile startup MaptheGap. His plan was either to sell his company or making money by selling pro accounts.
I think choosing the sell out strategy is one of the most common mistakes startups make. They hope to make their service so appealing that a big player has no choice but to acquire them. What if that’s not happening? Well, then you run out of money sooner or later, go bankrupt, and your startup has stayed a startup forever. In these times of economic slowdown it seems a pretty risky strategy.
Another failing strategy is to start with a pro account right away. So you’re launching a new service, but you prevent your very first users from using the full functionalities of your service? Since the first phase is mostly about convincing people to actually use your service, this will lead more to frustrated users than to money in the bank. Besides, a lot has been written and said about everything becoming free anyway.
So, what would be viable business plans to make your mobile service profitable? I have summed up three business strategies, which do not exclude each other, to earn money with a mobile service.
- Advertising - Very obvious, but still a lot of startups think of it as the a-word. They are too afraid to upset their userbase. But aren’t we all still watching tv and reading newspapers? Advertising doesn’t bother people as long as it doesn’t interfere with the usability of your service. Besides, the techniques to target ads on specific characteristics of your users and their location are pretty advanced, so your users might even think of the ads as helpful.
- White labeling - A white label product or service is a product or service produced by one company and rebranded by another company to make it appear as if it’s theirs. In terms of a mobile service, it means that you license the technique of your service to another company for a fixed fee, so they can rebrand your service as their own at an event (fair, release party etc.), offer it to their customers or on a bunch of other occasions.
- Licensing - By far the best way to grow a big audience, which obviously boosts your advertising sales, is to get your service preloaded on people’s phones. So your service is on their phone before they have even thought about buying it. This is hard, you’ll need to speak to phone manufacturers and they’ll need approval of the operators who sell their phones, but will certainly mean a big breakthrough for your service. Since the rise of the mobile Internet most manufacturers also have a ‘Downloads’ application preloaded, but the downloadable content within this application isn’t preloaded but can be changed at any moment. If you manage to get your service in there, every user of a phone of that particular manufacturer, looks at your service as soon as they want to download something. One of the most successful examples of this is the App Store on all the iPhones. The other side is that the operator or manufacturer will demand a share of your advertising revenue, but it’ll be worth every penny.
Although according to Michael Arrington revenue models aren’t really web2.0, I’d advise you to be ahead of the pack and think of a way to monetize your service instead of waiting for demanding investors (like Mike himself, what a coincidence) to come along buying shares you could have sold ten times higher.
I hope you like that post!
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Written on August 26, 2008 – 5:41 pm
Ernst-Jan Pfauth, editor in chief
It hasn’t appeared on the Technorati blog yet, but Michael Arrington broke the news: Technorati has acquired BlogCritics, a 6-year old blog network that draws around 1 million unique monthly visitors who watch 3 to 4 million pages.
In June, Technorati launched a blog advertising network called Technorati Media. CEO Richard Jalichandra wrote in the announcing blog post that “over the next several months, we’ll be adding blogs from the mid and long tail within those verticals.” Seems like he did just now, only in a slightly less orthodox way.
Where one would expect Technorati to focus on some sort of affiliate program, it just buys a network which gives them enough space and pageviews to place ads on. According to Crunchbase, BlogCritics has published 73,000 articles from 2,300 authors. Exactly, those bloggers are from the mid and long tail.
Jalichandra told Arrington that they will probably acquire more content sites soon. Well, truth be told, it’s a efficient way of building a solid blog ads network, that’s for sure. Although it does bring up an interesting question, is Technorati is a search company, or a media company? When choosing for the latter, who will guarantee me that Technorati search results aren’t biased?
Written on June 2, 2008 – 11:55 pm
Steven Carrol, Next Web WebTipr France
Michael Arrington published an interesting article yesterday, concerned about the sheer amount of UGC being generated, ’spewing’ out onto a world where the signal to noise ratio is being lowered daily.
We have evermore tools allowing users to create, capture and clutter the Internet, all of which is forcing the attention span of consumers down to seconds.
Consumers are bombarded with messages and streams from feeds and sources which at some point along the way were picked up and are now spewing out of every conceivable crevice. All competing for attention, but the louder they become the easier they are to ignore.
But the essence of Mike’s desire is this: “we need open standards and businesses to emerge that help people link all their disconnected content together into a single online identity”, he goes on “to enhance real world social interactions”.
Aggregating all this spewing data solves the disjoint information problem sure, but this does nothing to curate all that data down to the most interesting nuggets.
I would argue that simply aggregating data into a single online identity is not going to enhance real world social interactions, but instead decrease our attention span even further.
Instead what will be successful are tools that curate all this noise in unique ways, ways that save us time, guessing what we need and predicting when we need it, then serving it on a plate like the morning paper.
Written on December 19, 2007 – 11:34 pm
Boris Veldhuijzen van Zanten,
After the whole Blognation story last week I was sort of expecting another thing to happen. Another post by Sam (’Scam’) Sethi or a new captain taking over or a lawsuit or, well, something. Anything!
But it seems that Blognation is now officially, seriously, definitively and permanently over. Blognation’s hosting company, Howard Baines, has updated the landing page for Blognation. And they seem to have a sense of humor about the whole thing too. The title of the page is now ‘one nation, no voices‘ where it used to be ‘one nation, many voices‘ and the new frontpage displays the following message:
Blognation.com: Will the last one out please turn off the light.
It is clear that for many people this story is far from over and I’m sure we will all remember and talk about it for years to come but at least Blognation, the website, has now ceased to exist.
Written on December 14, 2007 – 4:14 pm
Patrick de Laive, Internet entrepreneur and co-founder of Fleck
You could feel it in the air, and yes today this bubble burst.
Sam Sethi, former chief editor of Techcrunch UK, decided to close down Blognation, exactly one year after Michael Arrington (Editor in Chief TechCrunch) fired him.
First of all I have to say that I know both guys pretty well and that I’ve always had fun catching up with both.
“Sam, there is just no justification for you or this post, you’re just an asshole”
Loic Lemeur
So a very short recap of what happened (as far as I know).
Sam Sethi started TechCrunch UK in 2006 together with Mike Butcher, covering UK based and European startups.
TechCrunch was partner of LeWeb3 conference in Paris and Sam Sethi posted a blog about The Good, The Bad and The Ugly. Loic LeMeur (initiator of LeWeb3) wasn’t amused with this post and commented “Sam, there is just no justification for you or this post, you’re just an asshole”. The whole blogosphere jumped on it instantly. Then Arrington requested to delete the comment and Sethi refused. In the end he got fired, apparently because of a lot of other things that have happened.
Afterwards Sam Sethi started Blognation and hired a team of journalists to write for Blognation. He claimed to have had funding, but in the end he didn’t have any cash to pay his journalists.
Well both parties have written about it, decide for yourself.
Arringtons story is here: The Fact and Fiction of Sam Sethi
Sam Sethi’s story is here: Here’s to You Mr(s) Arrington, Goodbye and Good Luck Startups
Blogging and the web are about openness and transparency, not about lies, scams and taking other people down. I think this ’storm’ will pass by and that everybody will forget about Blognation and this whole mud throwing thing. We’ll get back to normal life and write about all the cool things going on in the tech scene.
Update: Please take a look at the comment of Oliver Starr, who was one of the many victims of Sethi.
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