How do you test different revenue models?
If you have a startup business that could use any one of a number of different revenue models, how do you go about testing/evaluating each model?
For example, you might try:
- Freemium model vs. Subscription
- Buyer pays commission vs. Seller pays commission
But each thing you test could fundamentally change the way your business works. So what's the best way to try different things without confusing your customers?
1 Answer
One great way to test revenue models is through customer interviews. Sit with people and bounce the different proposals off of them. You can discuss whatever you want in a one-on-one interview without distracting the rest of the market.
The weakness of customer interviews is what people say isn't necessarily what they do, so you will need to listen very carefully, and try to be unbiased and ask open-ended questions.
We discovered, in doing this, that investors didn't want to pay for our product (which allows them to see what is up in their portfolio companies), because about one out of three investors said 'we invested the money, why should we have to pay to find out what is up'. As a result we changed our model to charge the companies, rather than the investors.
