business-modelWe can see many social apps, portals, or projects. Yet, as far as I saw, I think though people have many ideas around there, this is true until it comes to the idea how the startup should get to be profitable. I’m not a social scientist, but observing folks it seems like people think more in terms of features, activities, and partly even marketing and selling (e.g. how to tell my friends my app is the best in the world!) etc., but not in terms that require more structural thinking, which business models are.
But the question about: why there’s such a lack of ideas when it comes to business models types, is another subject.
When you look at the internet market, it seems to be rather a dull picture, with Google being rather a specific ad agency more than anything else (despite its official category of being a tech company).
My question is: are there real (and perhaps with some examples, as well) sensible business models for say social portals or apps other than based on the Ads Model?
UPDATE 29.07.2015 Thanks for your answers so far.
@rmoestl said something that my mind was diving into, but given examples are in fact something one could start with when thinking of creating a business model for a social portal.
And to the @Mowzer answer, it is not quite in the subject of social apps / webportals. These strategies are, first, nothing quite new, and second, too general; further more, they’re suited for selling / monetizing apps.
In order to avoid the answers like these, I’d like to share some short breakdown of how I approach enforcing popular “monetizing apps” business, selling, marketing and promotion strategies to social-specific ones (and because all of 40 points are quite repetitive, they can be summarized each in a single point), because I was thinking of it too, and I’m sure many other people were also considering them as a potential solutions.
So here’s what I think:
In social apps world, paying for an app is rarely a way to go. The Mowzer’s answer even answers why it is so.
Means probably paying for the extra features, pro accounts, additional services within a social app / portal. I know multiple portals trying to earn this way, but I always had doubts if it’s a model for the future web: competition appears every month or week, and I don’t know if for example Stack Exchange would be profitable if its business model was based only on taking money from its users.
Everything was told already on this, we’re looking for alternative business models here.
This is not an answer about a business model.
Same as above.
“if you can’t earn on your app, just sell it!” - selling a software is a market just like any other one. If you can’t earn with your business, if it’s financially leaking, or not profitable at all, “then sell it”. This is not really a solution.
It’s probably the most obvious, yet not an easy, way to go. And this is because it’s again, another market, another kind of business. You may want eventually to skip “social” part and build e-shop, which are like tones there.
And this one is not quite easy one as well. There are a lot of pitfalls here - one could end up with a dependency on a big costumer (and, for example, if their budget on a marketing on the social portal is to be decreased, which happens from time to time, the portal tops to be profitable), though this one is one I was also considering.
I’m not an expert with social apps and social media, but if social apps also include online communities etc. then I can think of alternative business models for social apps:
In essence, it depends on the sort of community you’re building. I claim that the more focused it is the more alternative revenue models you can apply. Here are some examples
Why I think my claim is true? Because I think the more focused and homogenous a community is, the better you know their specific problems and the better you can target their needs with alternative, more suitable monetization models than ads.
This in my opinion also implies, that when you’re building a broad social app like “the next Facebook”, the ad model is the only viable revenue model since the community is too diverse for other models.
Because what book or market place would you offer to all facebook users? This is one of the reasons why ads in a broad social community work: with the data users give away for free, the marketing system under the hood is able to specifically target single users automatically based on their interest profiles.
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