Jun
19
One of the strongest arguments against social media startups is the inability to monetize. Last night I listened to a great presentation from the guys at Sproutbox as they explained why they’re just not into a variety of startup companies. The reasons they give are a variety of misconceptions about what is going to make a web or tech startup viable. Some of the greatest misconceptions come back to the “If you build it, they will come” attitude that some entrepreneurs take with their product our service.
For example, one of the more popular tactics with Software as a Service (SaaS) startups is to offer their service for free, hoping that a non-beta or upgraded version of their service will merit a paid subscription. Even worse, some hope that a free version of their service will attrack advertisers to their site, and base their entire revenue model on the basis of advertising.
In some cases however, the ability to incorporate advertising has its merits. Recently I was introduced to Be Tweeted, a grassroots model to allow Twitter users to reTweet posts from advertisers that works from a pay per click model that allows interested parties to advertise on Twitter – a great idea given that Twitter has yet to come up with any way to make money, even after the usership has grown to gargantuan proportions.
Long story short web entpreneurs? Don’t rely on an advertisng model for all your new shiny software. But if you do, make it into a viral setup like the folks at Be Tweeted.