We are giving a short session to the start-ups at the Founder Institute this week. The title of our session is Revenue Appreciation.
We'll aim to drive home two points during our presentation.
- Build the revenue model into the product.
- What to consider when building a revenue model.
When you build the revenue model in tandem to the product, you end up with an integrated business plan that makes sense and increases your chances of getting funded.
Unless the shareholders are simply interested in investing their money in an exercise to build a cool product, they actually want a return on investment. So they want to read business plans that cover the complete picture.
Visit this page to learn more. http://futurebooks.com.sg/blog/revenue-appreciation-with-the-founder-institute/4303
7. RATE OF
CHANGE
7 years
5 years
3 years
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8. ANSWER THE
FUNDAMENTALS
Pain point
Value proposition
Revenue model
http://futurebooks.com.sg/blog/writing-business-plans-that-speak-to-investors/2308
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14. REVENUE MODEL
CHANGES IN 6 MONTHS
70%
60% Revenue generated by
50%
top 100 grossing
games 2011.
40%
30%
20% Paid apps
10%
Freemium
0% apps
Jan Feb Mar April May June
Revenue generated
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24. PRODUCT SALES
REVENUE MODELS
Model Description Example
Clicks and bricks Traditional location-based retail, combined with Wal-Mart
(eg) internet + mobile.
After-sales Profit from recurring servicing, post sale. Mercedes
service
Franchise Franchise fees and sometimes product sales. Subway
License Leverage existing sales channel to sell products. Adobe
Group-buying Improve purchase power of consumers Groupon
Rental / leasing Differentiate through service Hertz
Govt subsidy Product is made free, or subsidised by Govt. Pharma
Consulting Design specialised products for other manufacturers ARM
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25. INTERNET REVENUE
MODELS
Model Description Example
Advertising Cost-per-click, Cost-per-impression, cost-per- Google AdSense
acquisition, affiliate marketing
E-commerce Compete with traditional retails using range and price Amazon.com
Transaction fee Utilities which facilitate commerce and take a PayPal
commission. It is pay-per-use.
Software-as-a- Subscription model with recurring billing Salesforce.com
service
Third party Service is free to the direct user, paid for by a third Mint.com
sponsorship party sponsorship
Donation Users decide what the product or service is worth Wikipedia
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26. GAME REVENUE
MODELS
Model Description Example
Virtual goods Buy functional, decorative, in-game items Nexon
Subscription Basic product is free, but add-ons are additional Zynga
tiers
Advertising Serving contextual ads to gamers Electronic Arts
Land use fees Virtual land is sold leased to individuals Second Life
Merchandise Purchase physical goods to activate a online Webkinz toys
membership
Event fees Differentiated experience Netamin's
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