The Anatomy of a Business Model

Posted on July 5, 2012


I was dismayed to learn that during a recent performance, Madonna, in what many have since chided her for doing, revealed a nipple.  Yawn and yawn, on both accounts.

Growing up, the infallible big-sister Italian (yes) beauty of Madonna was a great source of fun for us girls watching.  She wore whatever, did whatever and got away with it.  This was the implicit Wish Upon A (Lucky) Star that anybody at a fundamental basic liberties level was making, and still makes, I think.  (Hence, the huge gay following, not incl. Elton John, who hates her, apparently).  And she wasn’t the first rebel, of course.  But the first scalable one.  As with People On TV, she was a Super Peer, for better or for worse.  And because she basically pioneered many of her publicity stunts (underwear on the outside (or was that Superman?), interpretive masturbation on stage, engineering every new look with the eye of an incomparable curatorial narcissist), she laid down a bankable Business Model for every Pop-Star-Thereafter: be at the very front tip of the Bell-Curve of Shock and Change, or get run over by the lemmings.

So, showing a nipple, a la Janet Jackson’s then desperate 38th “comeback” stunt at Superbowl in 2004, but in 2012, was Lazy…and that people even bothered to report it at all was just, well, like the lemmings not even bothering to find something of note, which is their only redeemable feature.  I daresay it is the final (?) toll of the Bell-Curve.  The Death of the Pop-Star Business Model.  Coroner’s official report: Death by asphyxiation by being the runt at the bottom of the furry pile.

Sigh.  I worry about Business Models out there.  My heart truly rallies for people who have worked hard to build something of value.  For instance, I have been a Facebook user, since 2007.  They are NOT kidding when they report a billion eye-ball hours per day or something like that.  It is a generation defining Thing, bar none.  The sheer inanity and inconsequential “contributions” I make to my Facebook feed has near zero anthropological or social value, but indescribably huge personal value to me and perhaps to my 5/349 “friends”, who I’d say are real.  It’s much like Hippie Free Sex.  Case in point:

x 1,000,000,000.  Daily.  And…someone is paying for precious server space somewhere, to host 5 years of my private pointlessness and it’s not me!  I have never clicked on those sidebar ads, apparently, a 15% revenue stream for the company.  I recognize that I am a sitting duck for marketing / ad-targeting purposes (as I am with gmail—that’s 10 years of nary-a-click over there, by the way).  But whatevs.  I use these platforms because they are fun.  And I believe I belong to the ever-growing dominant and obstinate demographic of cyber squatters who implicitly know: users pay nothing, take it or leave it.  And our privacy?  This is the age of Open-Source and Open-Mindedness, but you think you know me? Error 404.  Try again!

That Facebook was able to launch an IPO at $38 a share was a source of pride and mystery to many of us—a billion users and none of us knows anyone who actually clicks on an ad.  And we don’t even have to use apps to read the news or engage in other sites, while on Facebook, just cut and paste links to a new browser.  However, I have read that the big money is in gaming apps.  I had to read it because I guess I’m just not one of those who cares about watering virtual radishes—though many are (back in the day, my Tamagotchi was forever caught in hellish karma, starving to death, only to be reset and return to the same hands of its reincarnate killer—Moi.  I had exams, dammit).  On Field Trip to NASDAQ Day: institutional investors were all over Facebook like a tailored Armani Suit, that none of us wear.  But as with many inexplicably exciting wet dreams, there seems to have been a lot of clean up in the aftermath of that IPO: how does Facebook make money?  Dunno, really!

Anyway, I believe in Facebook: what they’ve done is stunningly Magic For the Sake of It, which, as I said, is the zeitgeist.  But click on an ad?  Pay for something that “should be free” or can be free?  No!  Why would I?

l do recognize that with every post and every passing year, for the sake of nostalgia for my life, documented, I absolutely do not want FB to go under.  This is the spooky barrel many of us are realizing we are being held over.  Will they be like Overlords and exploit that—like make us pay to continue using it from now on?  They might.  But, I bet there is a whole underground industry of hackers trying to invent software to download entire Facebook contributions, in case you want to leave.  That is what the elusive “Facebook Killer” would have to launch with.  But, “be cool Honey Bunny”, be cool (triangulated guns to the head).

For now, I am happily grazing in the fields of the benevolent Overlords, one eye cocked to the side, looking, wide-brown-eyed, chewing.

Acceptable monetization ideas for Facebook?  Go ahead, take ‘em, from the perspective of a free-blogging, free-Facebooking lemming:

  1. Design for users apps to personalize their page from the current dot-matrix level, utilitarian blue “theme”.  People would totally pay $1 for an app that could make their page more personalized…and animated or musical!  If not, the default is free.  That’s $1 billion!!  That’s what wordpress does (this blog host).  Notice this lovely free theme I chose?
  2. If you want to make a point with those creepy, keyword “targeted” sidebar ads, and this goes for Google’s gmail, too: then just give users a list to choose from.  2 local businesses, 3 general, Facebook can randomly choose 3 more.  That way, at least people will actually be aware of and agree with some of the businesses popping up on their page to a higher degree—isn’t that the point?  And companies can even offer users discounts for choosing them!  Why is that hard?
  3. I’ve heard that Facebook could be a platform for paying for online purchases.  Maybe we’ll trust it enough with all of our credit card info too and just press “pay by Facebook”!  That’d be huge.  But, one thing stopping that total allegiance to the godfather was this bit of viral-ness that remains the Pea in the Princess’ fragile back.  Damn the documentation skills of Internet users!

I love a monetizable story!  Here are some of my recent favourites, big and small:

At my local mall in Toronto the other week, this girl descended the escalator to a throng of cheers from many young women and even men lining up in the cosmetics department:

Michelle Phan was “just” a make-up tutorial video blogger on Youtube a couple of years ago—one of hundreds, but she did it so well, so clearly and with so much social and educative skills, she achieved 1 million subscribers (the first, and highest of Youtube’s “Guru” standings) and landed a subsequent make-up artist endorsement contract from Lancome, where she doesn’t even have to shill their products exclusively—as a nod to her precious authenticity!!  This 20-something girl, nerds out on make-up, like I do.  And incidentally gives so many interesting money-saving tips to circumvent the ridiculous expense of just trying to look nice.  She has created a whole industry, partnering with other hair and fashion video bloggers to form a channel.  She’s also given great advice on how to start your own consulting business.  What Michelle says, we believe comes from a good place.  That said, I realize I have never bought any of the stuff she’s recommended.  (Geez, I am an exceptionally bad lurker!!)  And I still have in my mind that Lancome is in PETA’s crosshairs.  (Publicity kills.  Both ways.  But not to say that I don’t need my bunny-rabbit-free steak).  Does Michelle shove products down our throats?  No, not at all—though she does demonstrate how lovely worthy products can be.  At the first sign of her inauthenticity?  Next!  (Haters pop up regularly on her Youtube comments like pesky zits that are hard to cover up).  Anyway, she’s smart enough to know it.  At the mall interview, she said she still lives at home with mom, but didn’t disclose what she rakes in.  I would love to interview her as a Finance Guru of sorts!  Maybe I’ll throw an email in her slush pile…

Barter Babe Shannon Lee Simmons

Next, my friend Kalpna Patel told me about this phenomenon in Toronto, who started Barter Babes.  Shannon Lee Simmons quit her Bay St. job (think Wall St. but perhaps less rough) and set out to barter with 300 women for a year in exchange for her financial advice (though, this finished in November 2011) .  She perceived that many people / women needed but couldn’t afford sound professional financial advice that would greatly help them make better decisions.  Kalpna traded her craft for Shannon’s: almost 2 hours of pro forma, budgeting, this-is-what-you-should-do-with-your-money, personalized, kitchen table help.  Through genuine admiration for her genuine efforts, these 300 women have propelled Shannon to TV and seminar fame, where she is now ker-azily monetizable.  Total original.  Again, I need to find this person. [Update!  I have!]

Finally, I read this on the plane a few weeks ago on my ride to Toronto:

Seth Priebatsch remixed his parent’s allowance-money games of his childhood into a $100 million gaming-app business (this is speculated value of course, something I both admire and doubt as a lowly plebe).  According to his TED x Boston talk, he believes Gaming is the future of the Internet.  I agree: we love doing things for fun, for free things, for points, and for no good reason at all.  So, his  is an app which GPS’s participating businesses around you.  If it’s a restaurant you’re looking for:  Ahoy!  This one marked here is willing to offer you a free mini-burrito if you play a game.  This game may entail 4 steps:

–       “Check-in” via Facebook;

–       Tweet something about the place;

–       fold an origami crane with your restaurant waste paper (?!?!?!??) and

–       something else

Give your burrito wrap some wings to fly to landfill heaven for points!

While to me, this seems a little tedious to do every time, just to get a frickin’ mini-burrito when chances are I can get a lazy-ass discount via  Plus, the timing of playing these “Games” may be too long compared to the speed at which people move around a local shopping area.  Plus to be touch-screening away, while you’re strolling about is potentially dangerous and annoying.  And, #2 on the list of tasks will fail because it is bound to be insincere (i.e. your followers will just know your broke ass is shilling for a food sample), I still think that Gaming (maybe somewhat more meaningfully?!) will get us hooked and loyal.  He’s on to something.  I Facebook messaged Seth that I have 2 cents to say about Games x Education.  He has ignored me (but with a flock of only 92 subscribers? What’s up with that?  Oh yeah…I’m just some random chick) and I have since forgotten what I wanted to say, anyway.  This sieve-like mind of mine; egg-on-a-spoon each thought, I tells ya.

OK!  It’s time once again to wrap-up this pastiche of ramblings.  I say:

–       be a pioneer (it’s been done, so do something else!)

–       be authentic (the world is growing up fast to little cheap scams)

–       hold your audience captive with reverence for their attention and sheer numbers (scalability and volume is a multiplier via our beloved Internet, but you have to respect your users)

are key to succeed and thrive on a small and large scale.  Big companies are over-thinking monetization ideas.  Re-rax (as they say in Japan).  Just offer something that isn’t creeping our privacy or tedious!  Offer something at a low cost but with great personal value and make it optional—while making the default totally good too.

And one last thing, I am an awful customer, don’t listen to me!

Speaking of don’t listen to me, I have a great idea for smartphone users who want to save on gas money / transportation: The Hitchhiker’s App:

Serial killers and recent homeless face-eater stories aside (oh world, WTF!), imagine this: drivers have empty space in their cars going somewhere anyway.  If they are not too precious about shoe-dirt, they can give people a lift.  Let’s say $1 for up to 10 city blocks per person, or 30 minutes of suburban roadway.  The app only works in broad daylight.  You would have to pre-register as a driver / passenger on something akin to (=a program (?) where, to save on hotel bills, you are billeted for FREE by somebody with a spare couch in your destination city, provided you one day do the same for someone else;  people are reviewed for being awesome / creepy etc.).  Back to my app:  people have their GPS radar out telling them that a registered car / passenger is near (could be dangerous for drivers, maybe, unless it’s handsfree).  Women can choose to only be visible to women, for example.  Or only to 95%+ positive reviews by other women.  Everybody’s reviews gets erased every 10 rides to keep people humble and to keep serial killers from building good karma.  And once you get into a car, both your GPSs are engaged, showing that you rode with this registered person (via license plates / photos).  It only shuts off by both people shutting it off via password.  Both sides must review the other before being able to do it again.  It’s monetizable by selling the app and every 3rd renewal of its subscription (which by then, shows people like it and need it to save them transportation money) for $1.  People prepay credits via their phone, so physical money handling is not done.  And you can’t be a kid.

Of course, I have no idea about car accident liability or forgotten items or serial killers.  Or worst of all, computer programming.  Nor have I ever used, or would use couchsurfers (‘nuff perverts in real life, thank you).  But wouldn’t it be nice if it could work? [Update: I found out that in Washington DC, there is actually a high-brow version of this idea where ppl can GPS-mobile order and pay a private car to come for them from anywhere.  The rate is slightly higher than taxis and the cars are a proper service.  Taxis are losing business].

This is why I’m just a blogger 🙂 (keeping my nipple, just not my silly ideas, to myself).

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