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MONETIZATION, make - Coggle Diagram
MONETIZATION
CHARGING FOR ENHANCED ACCESS
enhanced access generally doesn’t harm network effects
online platforms
asking producers to pay for more prominent placement of their messages
self-managed website design and coding process that produces no revenue for Google
charging users for lowering barriers
:red_cross: done right
increase the noise level on the platform
decrease the relevance of content for consumers
Facebook
creates tremendous value for brands that want to engage with current and potential customers
WHOM SHOULD YOU CHARGE?
Charging all users
platform businesses rarely charge all their users the way pipeline businesses generally do
Charging one side while subsidizing another
charge members of one category of users (call them A) provided they allow members of another category of users (B) to participate for free
Charging most users full price while subsidizing stars
subsidize or incentivize stars—super- users whose presence attracts large numbers of other users
Charging some users full price while subsidizing users who are price-sensitive
discount or subsidize users who are price-sensitive while charging others the full freight
HOW DESIGN DECISIONS IMPACT THE TRANSITION TO MONETIZATION
If possible, avoid charging for value that users previously received for free
avoid reducing access to value that users have become accustomed to receiving
Instead, when transitioning from free to fee, strive to create new, additional value that justifies the charge
Consider potential monetization strategies when making your initial platform design choices
Value creation and the challenge of monetizing network effects
Network effects
a platform attractive
Higher value creation :tada:
more consumers
more producers
wanna more value creation
Value creation
Razor and blades model
A very low price :
Gillette
Dropbox
Mailchimp
Freemium model
must be free
Useful building network effects for a platform business
Monetization challenge
analysis of value created on the platform
Traditional non-platform business
deliver value to their customers
-Whirlpool
-GE Avition
monetize the platform
For producers or third-party providers
Access to a community or market
For both consumers and producers
Access to tools and services
facilitate interaction
A smart monetization strategy
:star:
Access to curation mechanisms
quality of interactions
For Consumers
Access to value created on the platform
WAYS TO MONETIZE 1: CHARGING A TRANSACTION FEE
Powerful way to monetizing the value
the platform without hampering the growth of network effects
buyers and sellers are charged only when an actual transaction occurs
More serious and persistent challenge
to capture on the platform itself all the interactions
facilitated by the platform
Buyers and sellers who find each other on the platform
naturally
incentivized to take the interaction off the platform
to avoid paying the
transaction fee
This problem is especially rampant with platforms
connect service providers with service
consumers
the freelancer economy and the spread of the online sharing economy
platform businesses from Airbnb and Uber to TaskRabbit and Upwork
sprung up to facilitate
service interactions
faced with the challenge of capturing the interaction
on-platform
the interaction can’t occur until the producer and the consumer
agree on the terms of the service
THE VALUE IN NETWORK EFFECTS
Zvents
What
an online guide to local events in the Bay Area
challenge
monetize it
consumers' expectation of completeness
whole value of Zvents lay in the completeness of its listings
Zvents ended up with a tiny trickle of revenue
cannot threatened organizers
The interactions facilitated must generate a significant amount of excess value that can be captured by the platform without producing a negative impact on network effects.
Meetup
charging organizers
number fell, improve quantity
weeding out organizers who weren’t serious about their goals
encourage desirable interactions and discourage undesirable ones
WAYS TO MONETIZE 2: CHARGING FOR ACCESS
To monetize a platform by charging producers for access to a community
of users
joined the platform not in order to interact with producers
For other unrelated
reasons
Dribbble has rapidly gained prominence in the design community
designers, artists, illustrators, logo creators, graphic designers, typographers, and others
gaining exposure, credibility, and valuable feedback from their peers
Dribbble has invited third
parties to pay for access to the community
creates interactions that benefit both parties
described by the simple shorthand term advertising.
highly targeted job listings generate value for the
community
strengthen network effects rather than adding noise
depleting value
enhance the core interaction
to protect the long-term value of this specialized community
They do not charge members for access to the platform
opted not to permit sponsored images that provide enhanced access to the
community
Ad World
Provide a listing service
for firms
To begin new advertising
To post requests for bids and for ad agencies
To post proposals and offers
only in
B2B
:silhouettes:
Understand
How platform businesses work and the challenges for attracting both sides of the market
make