Given the new direction of PlaidSheep, this seems relevant.
Originally shared by Jeff SayreWhy Not Monetizing From The Start Is An Issue
Over the past several years, I've written and posted about the need for startups to engineer concrete monetization strategies into their foundation from their conception. The prevalent business model in the Social Web startup world -- especially in Silicon Valley -- is to launch fast and build as large of a following as possible without worrying about monetization.
The argument goes that with a large enough user base, startups will be able to generate advertising revenue or simply get acquired by a larger entity. Whereas there is some logic to that reasoning, it is short sighted.
This article is a perfect example of what happens to even very successful startups when monetization is not built into the foundation. Sure, Facebook and its elite group of founders and investors have succeeded financially. But Facebook is now in the difficult position of having to engineer monetization methods that will allow it to grow its revenue base and please investors.
Now that Facebook has IPOed, it is struggling to find new ways to grow revenue. Without a well executed monetization strategy that does not alienate its user base, Facebook will have a difficult time adding value and its stock price will continue to suffer.
/via +Timothy Ballisty and +Brad Panovich
#SocialWeb #Startups #entrepreneurship #economics #valuation
Over the past several years, I've written and posted about the need for startups to engineer concrete monetization strategies into their foundation from their conception. The prevalent business model in the Social Web startup world -- especially in Silicon Valley -- is to launch fast and build as large of a following as possible without worrying about monetization.
The argument goes that with a large enough user base, startups will be able to generate advertising revenue or simply get acquired by a larger entity. Whereas there is some logic to that reasoning, it is short sighted.
This article is a perfect example of what happens to even very successful startups when monetization is not built into the foundation. Sure, Facebook and its elite group of founders and investors have succeeded financially. But Facebook is now in the difficult position of having to engineer monetization methods that will allow it to grow its revenue base and please investors.
Now that Facebook has IPOed, it is struggling to find new ways to grow revenue. Without a well executed monetization strategy that does not alienate its user base, Facebook will have a difficult time adding value and its stock price will continue to suffer.
/via +Timothy Ballisty and +Brad Panovich
#SocialWeb #Startups #entrepreneurship #economics #valuation
Facebook Has A Business Model Problem