What are your thoughts on business models for apps and tech built using the TWS philosophy? It’s very important to nail this down, because any large impact on the world will depend on this. One simple model is to make users pay for the app (one time, subscription, freemium, etc. etc). But are there any other options that can support large user bases?
At Siempo we are planning on AB testing a Pay-What-You-Can subscription model against a traditional premium subscription model because we feel it:
Aligns with humane design principles to shift the paradigm from an attention economy to a user value-based economy. People should pay for the value they derive from a product.
Aligns with business objectives. The better we make the product, the higher ARPU/CLTV. We’ll know if it’s really working.
Recognizes the variance in need. Some users experience a problem on one extreme (and therefore have more to gain from using it) more than others (marginal gain).
Makes the product more accessible. The reason person A can afford something and person B can’t is largely random. I’ve always appreciated “sliding scale” models for events, retreats, etc. This is especially important for the digital addiction crisis given the growing digital divide in education about how to use tech responsibly.
Opportunity to built trust and community with users. We want to be one of those good tech companies…
There’s actually a VC-backed startup called EarnIn that has been successful with such a “donation” or “tipping” model. "We don’t think people should be forced to pay for services they don’t love, so we ask you to pay what you think is fair based on your personal experience.”
I’d love to hear of anybody else’s experiences or thoughts on this!
This is very interesting, Andrew. I guess you’ll have to interrupt the user somehow to remind him/her that this Pay-What-You-Can thing even exists?
Also, I checked out your app… looks very interesting and I signed up. One thing I noticed: the “sign up for beta” form doesn’t go away after submitting the info… confused me a bit…
We would need to communicate the pricing in various places and times. We’ll be testing this in the spring and would love feedback!
Thanks for signing up! noted re: signup flow. It’ll dissapear in a couple of weeks when we are public in the play store
You should use an income based pricing model that charges more to people who are rich and less to people who are poor in proportion to the value of the time the product will save people. This pricing structure will satisfy demand measured in hours of your time instead of demand measured in dollars you have to pay with. What I’m proposing is a pricing model that charges a variable rate to different people based on how much an hour of their time is worth since this product presumably saves time or increases the quality of time equally for all but your customers time is not all worth the same number of dollars/hour.
p.s. I have a project to develop this pricing model and research and financial projections if you are interested.
Interesting, Steve! Yes, please share what you can.
I’m glad to hear your interested. Contributor orientation and on-boarding for The hOEP project Hours equals price starts at https://goo.gl/mg4WLK The first page of the onboarding should hopefully interest you immediately, but I’ll make you a personal time back guarantee. Spend up to 30 minutes of attention at the link I provided where you watch the slideshow and fill out a multiple choice survey. If you aren’t completely satisfied with your purchase of information in return for your 30 minutes of time spent, then I’ll offer you a refund. I’ll do whatever you want within reason for up to 30 minutes if you reply here with a link to your survey results for proof that you read and spent your time.
In a recently published Opinion Piece - Could Mark Zuckerberg be the Greatest Self-Help Guru of All Time - I suggest a different business model for Facebook or some startup that wants to disrupt social media.
What I call a FacebookForMe service would unleash Facebook’s algorithms onto the task of making us better versions of ourselves using the behavioral economics concept of ‘nudge’.
So I think that the new business model for social media is going to be as ‘Nudge Machines’. In order for this to happen, of course, we will need to pay Facebook or some other social media company to work for us. At the moment we are the product, not the customer.
There is no such thing as a free lunch in social media as anywhere else, until we start paying Facebook, or the government starts funding it out of taxation, it is going to keep working for its advertisers rather than us.
What we need is a product that will work like an add on or filter for facebook and convert the time sucking facebook into a motivation enhancing nudge machine more to our liking. Then you can buy an add on product to facebook that lets you automatically micro manage your facebook influences?
I like your basic idea of turning the addictive practices of facebook into productive purposes. Like what if work were addictive as facebook? The question of who controls and plans the addiction is what we need to maintain control of as individuals. We want a technology based filter and information manager AI with some basic motivational coaching and AI ability.
Hi Steve, what a wonderful idea. Do you mean by that that Facebook would have to give permission and allow interoperability with the addon?
Presumably the analogy here is that Facebook has, or is, becoming a public utility. And as in some countries where those running the powerlines have to give other companies access to sell power over the lines, it maybe that there might be pressure for that to happen in regard to Facebook. And then all sorts of people could create Nudge Machines so that people could interface with the basis information in ways that worked for them.
That would be the only way, I think. And you would have to pay them as well, probably, because you take away from their current business model: selling ads
They would never allow, or make it impossible, to scrape the site and neither would they be inclined to expose too much information on their public API’s (that would be to them like illegally tapping the powerlines)
Interesting ideas! I’d be keen to keep tabs on your project.
My suspicion is it would be tricky to implement and message variable pricing in a way that resonates with and dignifies all users. There are also big questions around how to report income, measure time spent prior to using product, determine quality of life increases other than reduced time, forecast revenue, etc.
I think the best business model is still advertising and selling users data.
This movement is going to go much further if we start to be more realistic. What we need to do if FIX the ad industry.
I know that only ad industry pretty well, and literally it is currently filled with used-car salesmen types, scammers and even a disproportionate number of psychopaths. Everybody is skimming the margins. Ad technology is pretty bad and clunky, ads are currently being hijacked, ads are currently hijacking you. Worst of all many ads are completely immoral, just urging people to buy more and harmful things with an absolute minimum regard to the user’s interests.
The way to change that is to go with ads that offer good products and services. To put ads in non-invasive positions. And to never misdirect people to ad results when they are looking for something, as Google does.
This would definitely mean ads making less money. But if having moral ads could in itself draw users, then it might work.
You’re right that they would need a profit motive to open up their API’s or allow such a thing. But they already kind of do this like in facebook you can subscribe to a news aggregator site. You could construct a facebook app or plugin that works like candy crush and use the facebook API that way within their terms of service maybe? But doing it with a facebook app would be inconvenient and cost time and learning for facebook users, so that’s an adoption hurdle for new users. Who wants to let “my personal time manager” automatically look at every facebook message you get and then give you links to the ones you choose in advance or are predicted to like the most so you can manually ignore the ones facebook gives you natively. The user experience would be something like go to facebook, and check your “my personal time manager” app first then ignore all the standard facebook messages that haven’t been screen by your facebook personalization app. So that’s friction in advance for the user and a pay off in the future for the user and not a good combination unless there’s a lot of quick value added for the customer convincingly.
On the other hand this idea of adding a filter to facebook isn’t original and is a basic extension of child protection and surf safe and net nanny type products already available on facebook but targeted to minors. The ones build so far seem crude and not very well designed see https://www.nytimes.com/2018/01/30/technology/messenger-kids-facebook-letter.html
I like the idea of fixing the ad industry, but it may not be all that practical. Ads will be ads. Unless we build an app for ads… solely for ads… and ads compete to catch attention Then we can take ad money from social media. People will then crave for ads and come to this “Ad App” … thinking aloud, please forgive me!
This already exists in apps like Groupon, for instance. In The Netherlands you have Vakantieveilingen.nl (holiday auctions, but also selling products) and SocialDeal.
Hugely popular, people saying “I have ‘won’ this and that…” while they really have fallen for an ad
People also buying all kinds of stuff they really don’t need and hardly ever use, I notice
(Note: this is a follow-up of the Minds business model discussion. A small explanation of - probably - the most successful reputation system on the web)
What I like more are similar business models that use reputation systems without the option to exchange to money. My favourite system is that of StackOverflow (SO). It uses points and gamification in a professional way (so it’s not a colorful game) to get users to maintain the website. This works incredibly well.
In SO you get reputation points by helping other users answer their software programming related questions. If your question and answer are good you receive points by the upvotes given by other users. You can also earn points by maintaining the sites (via moderation, editing posts, flagging, reviewing, etc.), plus you receive gold, silver and bronze medals (e.g. when giving N number of upvotes, posting M number of answers, etc.)
The only incentive, the benefit, to participation is, well… Reputation. Having a high score and many medals shows others you are an expert programmer, able to help and teach others. And this reputation also does well when applying for a new job and you show it to your potential future employer.
Software companies can lessen the burden on their support desk by pointing users to tagged Q & A on SO. The SO organization earns money by targeted ads (which are relevant to SO users, based on their interaction), and by having professional extensions for teams and enterpise organizations.
Also they run a whole bunch of other sites for different interest groups, that run the same software.
Quite late to the game here, but hopefully, we can get this topic going again.
I’m primarily interested for two reasons:
- I am conducting research for my doctorate specifically to understand the link between adtech business models (that are cast wide throughout the “free” internet) and our wellbeing;
- To propose a new 3-party solution that evolves beyond the platform and “follows the money”.
Any evolution on the above comments/thoughts/projects?
Hello @Harinda80 and welcome!
I have been involved in many discussions regarding humane advertising here, and also have been an internet publisher and entrepreneur-developer for the last decade.
You may want to browse parts of the following discussions regarding advertising:
My thoughts on the topic:
- Advertising and media don’t exist in a bubble. The tech ecosystem is built upon hidden currencies that I call surveillance, attention and misdirection. All of these currencies are traded secretly in the background without us knowing. This is often referred to as surveillance capitalism or the attention economy. However what many people don’t know is how deeply these things are built into much of tech software. Much of tech from the operating system to apps stores, from analytics to to website and app components, was created for the purpose to profit from surveillance, attention and/or misdirection.
- I think an environment where users must pay for services is probably worse than ads in almost all cases. Paid services discriminate against everyone but the wealthiest people on earth. Paid services also do not solve the attention-stealing problem, whoever can steal out attention will get our money. (Not my money, but maybe some other fool with money to spare.)
- Nonprofit is one solution
- I believe ethical advertising is a solution and have come up with a few ideas for humane ads:
I believe we also need a humane app/site analytics system to go along with humane advertising, and the two could be linked so that ad views are counted (and perhaps also launched) by the humane analytics system.
Please share your 3-party solution that evolves around the platform and follows the money.
Hi Harinda! Yes, I am involved with a startup for five years now, and we have a piloted and tested MVP and marketplan for just what you are seeking. Here is a general presentation
Our core principle is to replace the third party network model with internet users themselves, turning internet users into partners, not products (I call this the “active audience”). Its not disruptive to the media marketplace or publishers, but it is disruptive to any third party network, and our MVP takes on Google and gives pubs the ability to take back their audiences from Facebook in terms of monetization.
Please feel free to reach out if you have any questions, and thanks for asking