I was at
the Nasscom Emergeout
Conclave today, attending the 'changing face of consumer centric
businesses' session and therein a very interesting question was posed by a
member of the audience. Should his startup follow the 'free now pay later
model' or follow a subscription model?
I think it’s a very intriguing question because of the number of models followed and the success stories of companies like Instagram that got valued for a billion dollars, without even having a revenue stream!
So here are the 2 major perspectives offered at this session, both of
which i agree with.
Perspective 1: Looking at the Changing Perceived Value of the business or
service
Look at the nature of the business in question. For example if the
business is a mobile game, then the perceived value of the product is going to
diminish in time, hence the logical way is to charge money at the beginning
itself. Or probably offer a glimpse or a few levels of the product for free,
and then charge for the rest of the levels. So the key is to look at the
Changing Perceived Value of the business or service.
Perspective 2: yes revenue, yes valuation
Only businesses with a revenue stream/ model or revenue plan are valuated.
So, start out your business with a clear revenue stream in mind. Exceptions
aside, this is the mantra to ensure you sustain your business over a long
period of time.
The panelists on this sessions included - Meena Ganesh, CEO at Pearson Education Services, Manish Vij, Co-founder of Vun Network, Aloke Bajpai, CEO at iXiGo and Troy Malone, GM, APAC, Evernote; so due credits to them for their opinions, the inputs of which have been included in this post.
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