Team can't agree about a business plan
Hey guys, We are a team of three co-founders working on a B2C startup,
we are couple of months away from finishing our MVP but cant seem to agree on the correct business plan.
In short we are developing an app to middle between two audience, its a mix of Linked-in and Fiverr where one audience gives services to the another audience
We are split between 4 options:
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Commission based - because our app acts as a middle man between two audiences we thought about a business plan similar to Fiverr & AirBnb where we take small percentage of the transaction we help to middle
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Subscription - where we give extra features and exposure to subscribers (Linked-in style)
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Payment per lead - the communication can only be initiated by the audience that consumes the services (like in fiverr when you send message to a freelancer but a freelancer cant send you a private message), but when a customer is interested in the service offered the service seller can only uncover the details of the interested customer by buying a lead token that he can buy in a package or a single token each time (Alibaba)
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Mixture of 1 & 3 - where we take a smaller commission but exposing interested customers details is still through buying a token
I will be glad to have a perspective of someone from the B2C world
Thanks!
Disagreements are tough, and business is definitely no exception. I’ve found that usually these disagreements are based on our varying goals or varying perceptions. Take a step back and ask each other what their goals are with the business and where they see the company going.
Next, I like the advice that I’ve heard that is to make money where you provide the value. Is the value the membership? Is the value when a deal is closed? Or is it when a lead is generated? If people are receiving real value, they’ll pay. If the model is misaligned, often times the business struggles to get good traction.
Good luck!
Thank you for replaying, we are now inclined to go with option 1 taking a % commission from the transaction as it will make us work harder on the value generation of the application and not focus down the line on which features should we develop that we think the user will want to pay for
I think that's the best plan!
Don’t just think about revenue, think about users and content as well. If the platform’s success hinges on the amount of content, buyers and sellers, then ask the question: would you rather have 1000 users paying $1 or 100 users paying $10?
Revenue wise it’s the same, but 1000 users generate a lot more content. I think a subscription model would be very limiting in terms of platform usage, and almost all marketplace platforms that I know don’t have this business model which is probably for a reason.
As others have suggested as well; experiment and talk to your early users to figure out what works.
Why not just launch with no business model and a beta label so users expect some costs at some point.
First prove that the service works and that you can successfully attract both sides of the market, which is key from what you described.
If the product works you have users who can tell you 100% what they would or wouldn't accept in terms of charges.
I Like the advice from @iamwonder. Making the right pricing model is an real ART and definitely not easy task. And in most cases it could be done correctly through experiments. Think from customers perspective and take into account psychological aspects. I don’t know your business but first options seems like a good start.
Hey, We will definitely be doing experiments with this, thanks!
I personally am a fan of simple pricing so suggest subscription. But I do not have, successful, experience in B2C.
What I would say, is I approach disagreements as:
1.) I start from each party is 50% right, 50% wrong. If it's 60:40, 30:70, or whatever it doesn't matter.
2.) You can't go wrong. You can try various approaches and see which works best. You could do A/B testing with new pricing every week. Or you can offer free trials to start then ask those users which payment method would work best for them.
Hope that helps.
Hey, thanks for taking the time.
we usually decide arguments upon evidence based discussion, problem here that there are good examples for all of the methods, A/B testing will definitely be the way we go