It’s no secret that many businesses today, especially in the tech industry, create great services but wait until after their service has taken off to come up with a revenue model. Twitter, for instance, is one very useful company that began this way.
This model works in many cases, such as with Twitter, but the question of whether or not it is an effective business practice is still debatable.
Should the business model or the success of the business come first? What do you think?
Many of these online businesses find their business model in an advertising platform. While we’ve seen multiple companies have great success with advertising, studies show that consumers are often frustrated by the excessive ads.
In a recent interview with WebProNews, Jeff Tinsley, the CEO for MyLife, told us that businesses have more than one option when it comes to finding a revenue model. He said, “Advertising is not the only model that works, as proven by us and proven by LinkedIn.”
In addition to MyLife’s free service, it also has a premium model with three different subscription services for users. He told us that users are willing to pay for what they consider to be valuable. In this case, in particular, users see value in connecting with people they want to hire and vice versa.
Tinsley said that both sides benefit, so it makes it something that is worth paying for. He went on to say that this model has worked so well for MyLife that there is potential for an IPO in the future. He said that it is something that they “seriously want to take a look at.”
More than likely, opinions are mixed on determining the best form of monetization for a business. However, I think it’s safe to say that most of the deciding factors depend on the business itself. Any thoughts?