HN Explorer

Poll: Best Revenue Model Focus For Our Startup

4 points by jasonlbaptiste ↗ HN
Edit/Stupid Me Our startup is Ramamia, easy and private sharing with your family.

We're having internal debates at Ramamia about which business model we should focus on. We could do both, but we're a small team + not a ton of funding and want to be focused, not divided.<p>Advertising: Pros: We'll have a valuable segment in the family market. If we can target correctly, it could be enticing to advertisers.<p>Cons: We'll need a lot of scale to start seeing significant revenue from ads. At first we'll have to go through an ad network, which will eat even more of the margins. We're also not familiar at all with the advertising model.<p>Subscription Model / Premium Accounts<p>Pros: We're heavily leaning towards this. We've had users suggest to us features they would pay for. It's also a steady stream that can have a valid proof of concept without scale to hundreds of thousands of families ie- We can have somewhat stable conversion numbers, what they would pay for, and what they would pay. 2/3 of the team has prior experience with freemium/subscription biz models.<p>Cons: Converting users can be hard. It's also not straight forward. If we develop the wrong features for a freemium account + mess up pricing, it could go either way. Lots more trial and error.

5 comments

[ 2.4 ms ] story [ 17.7 ms ] thread
russell
I've been collecting a number of blogs about website monetization and the consensus seems to be advertising for social networking sites, but can work very well for information destination sites. Socialites care only about their friends and ignore advertising. Information gatherers are open to anything that helps them in their search. If they are buying, they will go to sellers.

Advertising is probably worth while as a supplementary income stream, but I wouldn't make it the primary focus, if you have a good freemium model. Just get your feet wet and let advertising prove itself. (I voted for freemium.)

jasonlbaptiste
theres tons of info out there. Andrew Chen has a lot of great articles. You should post your compilation when you're ready here.

We can throw ads on there just to see, but im a believer in if you do something do it right. Advertising to us is more than just embed adsense.

I think our reason for leaning towards freemium boils down to our focus on being a utility more than a novelty.

zhyder
What features do you plan to differentiate the premium version with?
chris11
People are asking to give you money for features, so make that your primary focus. If someone is offering an unsolicited idea that they offer to pay for, I'm sure that feature will be worth your time to implement.

How much work would it be to set up your site with some ad network? It may not be worthwhile for you optimizing the ads you are selling, but it will at least give you some money from the free accounts.

jwt
Advertising and premium accounts need not be exclusive. You could try both with a freemium model (see Chris Anderson's recent WSJ piece). Place ads on the free version and take them away in the premium (as well as adding other features of course)