Self sustaining business model
I'm building this mentoring web app and as much as possible I want it to be free. Initially I'll be using my own money to set it up but I also don't want to keep paying for the infrastructure costs (servers, etc.).
About the app, basically there are two actors: mentor and mentee. Both can can decide wether they want to be mentor/mentored for free or with a price. This will help a lot of students and fresh grads who are willing to work free just to gain experience. And likewise for the mentor to build relationship with future colleagues.
So I'm looking for a self sustaining business model that would keep the site up without asking much from the users.
First I thought of donation but there's no guarantee in it and it would be sad to shutdown the site just because I can no longer pay the bills.
Getting Started Business Model Web App
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Remove the free option and charge a high price. People equate low price with low value; IMO you should charge at least 4.99. There are no ways around it: either you charge money upfront/subscription or you build a huuuuge community of free users and you charge for eyeballs (ie. advertising). – Frenchie 11 years ago
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@frenchie thanks for your response, out of curiosity where did 4.99 came from? – Marconi 11 years ago
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It's just a random number that looks more expensive than what would people think of "cheap app" (ie. yours = valuable) but still affordable. – Frenchie 11 years ago
2 Answers
Building your application, serving your users, and showing your traction should be your first objective, leading you afterwards to find your business model. We could take for example Amazon or Twitter, which struggled to find a sustainable business model in their early days.
In a world where more and more startups launch and usages are evolving it can often be painful and time consuming to find a business model.
You should launch your product, see how users are using it and find a business model that suits users' needs and cover your costs.
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Twitter, etc don't need a business model as they have VC money, so they can figure it out as they go along. Without that investment, as implied in the question, you really need to have a clue at the start. IMHO, YMMV, etc. – Steve Jones 11 years ago
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Developing an online business nowadays doesn't require a lot of investment. Alain Raynaud was talking about hosting, and you could find hosting for 4€ / month (Gandi for instance). Bootstrapping an online business has never been easier... – Pierre Lechelle 11 years ago
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It depends what kind of business you mean. If it is one that needs to scale like Twitter, etc, then the costs are non-trivial, which is when the VC money comes in useful. Of course, for a totally trivial site, with minimal users, 4€ hosting would be fine. – Steve Jones 11 years ago
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I perfectly agree – Pierre Lechelle 11 years ago
How much is the hosting going to cost anyway? I wouldn't expect more than $100/month. You probably could make it work with $10/month if you had to. Consider that a fair option.
Donations will not work. It takes about 1000 active users to donate $5 once. And then everyone is upset at you and feels entitled.
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Initially $100/month is already too much I imagine, and as I've said I can afford the initial cost I'm just looking on how to plan ahead. Thanks for the response though. – Marconi 11 years ago
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If $100/month is too much, then how much wouldn't be too much? – Krzysztof Kowalczyk 11 years ago
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@KrzysztofKowalczyk, that's a very subjective question and depends on your technology stack. Java/C# starts at 9$/month, ruby/php/etc starts at 4-6$/month as of the day of writing. – Denys S. 11 years ago
