ifacethoughts

Value And Revenue Models

I have had opportunities to meet people who are either entrepreneurs or are planning to be. I have discussed their ideas with them, some of my ideas – more from a value perspective. The realisation has been that the value and the revenue model might not go hand in hand. My outlook has been to focus on the value to the customer before thinking about the revenue model, but it is also the reason that thinking about the revenue is not automatic. I used to think earlier that value and revenue model are two sides of the same coin. But now I think there are more dimensions to it. In software, value is associated with either information or functionality. The problem seems to appear when this information or functionality is not perceived to be necessary. I think it is more about the perception than it actually being necessary or not. This perception has to be changed to be able to build revenue models.

Discussion [Participate or Link]

  1. Efficient Markets on iface thoughts said:

    [...] I have mused earlier that value and revenue models need not always go hand in hand by themselves. Someone has to marry them. Of course, for a longterm revenue model value is necessary, but value might not always mean a good revenue model. I have also come to believe that coming up with a revenue model is a skill and requires out of box thinking. The value creator has to know the market needs, but the business model creator has to know degree of that need. Will the customer be ready to pay for that? If not who are the other candidates? What was a revelation to me was when my friend, Manoj, explained to me how the media works. The media publishes content, but earns through advertising, which is not the first hand information the user is looking for. It is complementary content that pays for consumption of the main content. Of course contextual advertising can enhance it, but inherently the news and editorials in the newspaper are not the same as its classifieds. [...]

  2. Do Not Work For A Big Company on iface thoughts said:

    [...] in a job is the ability to understand relationship between idea and value, and then between value and business. Robert May’s case study is an excellent example on this. OpenIDSay your [...]

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This is the weblog of Abhijit Nadgouda where he writes down his thoughts on software development and related topics. You are invited to subscribe to the feed to stay updated or check out more subscription options. Or you can choose to browse by one of the topics.