Live Blog: Think through the business model early on – startups often make the mistake that this means tinkering with a spreadsheet for months.
There are lots of ways to sell valuable services – find the ‘best fit’ for your company and your customers. How and what are they willing to pay for the services?
It’s all about the details – the devil is in the details and the execution. Talk to other startups, do your homework. Try to learn from each other, share your experiences to help your fellow startups along.
It’s starting to get pretty noisy in the online world, so don’t rely solely on advertising; rates are falling so you have to pedal twice as fast to go the same distance. If you are going to advertise, look beyond ad words into lead generation, affiliate programmes, blend complementary business models. Example: Zoombu looking at a lead gen model, Zemanta using Amazon affiliate.
Freemium – there are more and more startups looking at this model. But you have to be extremely careful about deploying, because it’s about the numbers. Fred Wilson writes great posts about this. There has to be enough of a feature set in your product to allow you to charge a premium for truly advanced features, and balance this out against your internal resource requirements so that the premium sales actually make you some money.Eg. Basekit, Box.net, Zemanta.
Marketplaces – if you build a great marketplace, they will come – myBuilder has done a fantastic job of building a marketplace that connects homeowners with builders; myBuilder gets a share of the completed rate.
Virtual goods are relevant to specific markets, such as gaming and virtual worlds such Second Life and Habbo Hotel.
Reshma’s a believer in the concept of graduated business models – citing the example of myBuilder going from percentage of transaction to subscription to advertising/lead-generation. Amazon went from ecommerce to hosting to affiliate advertising.
BIO: Reshma Sohoni runs Seedcamp on a day-to-day basis as its CEO. She joined Seedcamp from the Venture team at 3i. Prior to 3i, Reshma spent over 3 years at Vodafone in their Commercial Strategy team, working across the Europe and Japan footprints in marketing strategy and pricing functions. Reshma started her career in the US in investment banking (Broadview) and venture capital (Softbank).