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[G2] PR-6 Monetization (Ways to monetize (Enhanced access (Charging…
[G2] PR-6 Monetization
Value creation
Network effect
self-reinforcing feedback loop
the challenge of monetizing network effect
Analysis of the value created on the platform
Producers or third-party providers
Access to a community or market
Airbnb
global market of travelers
LinkedIn
potential job-seekers
Alibaba
sell products all around the world
Both customers and producers
Access to tools and services that facilitate interaction
Kickstarter
creative entrepreneurs raise money for new projects
eBay
combined with PayPal
Access to curation mechanisms that enhance the quality of interaction
Customers
Access to value created on the platform
YouTube
Videos
Skillshare
courses
Monetization is about capturing a portion of the excess value created
Ways to monetize
Access
Charging third-party producer
If and only if the newly added contents enhance the value of the platform to its users
Dribbble
Enhanced access
Charging producers
provide enhanced tools
More attractive presentation
Google Adwords
Buy premium placement
Better target messages
Interaction with particularly valuable users
Curation are applied rigorously
Charging users
Lowing barriers between users
Dating websites
Principle: Ensure the sense of transparency
Otherwise, native advertising will alienate users
Transaction fee
Charging when actual transaction occurs
Challenge:capturing all the interactions, and let them on-platform
Resistance strategy: Provide all the information, let temporarily prevent participants from connecting
Extend the platform role as an interaction facilitator
Upwork
Provide tools for monitoring the service provider remotely
Clarity
Offer consulting service expert
Enhanced curation
Positive network driven by quantity also by quality
Sittercity
Skillshare
Whom should you charge?
All users
Country clubs
Prestigious membership organizations
guarantee member quality
One side while subsidizing another
Bars and Pubs
Ladies' Nights
Most users full price while subsidizing stars
Super-users whose presence attracts large numbers of the other users
Malls
Offer attractive leave terms to Target
Mome users full price while subsidizing users who are price-sensitive
Those sensitive will kill the network effect
How design decisions impact the transaction to monetization
From free to fee
Avoid reducing access to value that users have become accustomed to receiving
If charging for enhanced quality, you control and guarantee for it
Avoid charging for value those previous are free
Consider potential monetization initially