MBA Mondays: Revenue Models - Mobile

Fred Wilson 

As attractive as selling apps and running ads on them is, I believe the biggest and most attractive model in mobile is the transaction. Slowly but surely, our phone is becoming our wallet. And I don't mean wallet in the way that Google and PayPal think. I don't think we will necessarily have a mobile wallet. I think the apps on the phones will just have native transaction capability in them.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Data

Fred Wilson 

The Internet is a data generating machine. According to Eric Schmidt, every two days now we create as much information as we did from the dawn of civilization up until  2003. It's also incredibly good at presenting that data, both to humans and machines. So it makes sense that collecting and publishing data is one of the primary business models on the Internet.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Licensing

Fred Wilson 

Licensing, according to wikipedia, is an authorization (by the licensor) to use the licensed material (by the licensee). Of all the business models listed on the revenue model hackpad, licensing is the least net native business model. There is very little about the internet that makes licensing work better and there is a lot that makes it work worse. 

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Transaction Processing

Fred Wilson 

The thing that all of these forms of transaction processing have in common is the processor handles a transaction that was generated by another product or service and provides some form of completion service and charges a fee for doing so. That could be processing a credit card transaction, handling a banking transaction, shipping something to someone, completing a call originated on another network, or distributing a third party app on an internet or mobile platform.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Peer to Peer

Fred Wilson 

If there is one thing I have learned investing in Internet businesses over the years it is to pay attention to things you can't do without the Internet. And that describes peer to peer pretty well. Like the Internet, a peer network empowers the edges and devalues the middle. I like peer networks very much.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Subscriptions

Fred Wilson 

Today, most software is sold in a subscription model. You pay a monthly fee for the right to use the software. If you stop paying the monthly fee, your right to use the software goes away. Maintenance and support is bundled in. The emergence of the subscription model has made the software business better. In the old upfront license fee model, software companies would trade at 2-4x revenues. Now they trade at 6-8x revenues. That reflects the recurring, almost annuity nature of the subscription model.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Commerce

Fred Wilson 

Commerce represents the largest and most common online revenue model. But it is not an easy one to execute profitably. It lends itself to commoditization and margin compression in most cases and the economies go to scale players like Amazon, eBay, and Walmart.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

MBA Mondays: Revenue Models - Advertising

Fred Wilson 

I would break up advertising into two big buckets; ads that are sold and ads that are bought. The first is a relationship business, requires a direct salesforce or a salesforce that you can tap into, and will bring a higher revenue per impression in most cases. The latter is a data business, automated by machines and software, is a volume game and will bring a lower revenue per impression in most cases. Much of the online advertising market is moving inexorably toward the latter category, for good and bad.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types

Business Models I Like: Aggregators

Scott Britton 

Right now I’m really digging businesses that center upon the aggregation products/services in a cluttered market. With more and more options for products and services many businesses are finding their niche by aggregating these offerings in one easy place for consumers. Two companies that provide this service and are killing it  are SeatGeek and Yipit. Seatgeek aggregates tickets from the secondary marketplace and has a recommendation algorithm that tells consumers when to buy. Yipit pulls in daily deals from all the sites we love in one place so I don’t need to go 10 different palces.

 



Filed Under:
Collection: Strategy & Starting Up
Category: Revenue Model Types