Nick De Mey - How to Make Money with My App

1. “How to make money
with my app?”
And other Business Model Questions
Nick De Mey - cofounder Board of Innovation

2. Book that trigger the launch of
company:

3. boardofinnovation.com

4. boardofinnovation.com

5. strong network & culture of sharing
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6. for Fortune500 & global innovation leaders
Heavy industry/manufacturing
Utilities/Chemicals/Pharma
Commodities/Automotive/…
Banking/Finance/Payroll/HR
Telco/Publishing/Travel/
FMCG/…
B2B
B2B2C & B2C
Tokyo

7. Business Model
Innovation
?

8. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.
just to make sure we’re all on the same page…

9. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.

10. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.

11. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.

12. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.

13. Business Model in a nutshell
An organization’s logic of creating,
delivering and capturing value.
So many options to
make money, experiment with
pricing & revenue models,…

14. What is a clever
way to make money?

15. E.g. Make money with silent tracks?

16. Understand the patterns!

17. Useful skills.

18. Learn to see:

19. What could this be?

20. Makes sense?

21. Makes sense?

22. Velocipedia
Italian designer Gianluca Gimini's

23. How to
innovate your
business model?

24. Work with a visual language
Bird
10%
remembers
65%
remembers

25. Work with a visual language
www.boardofinnovation.com

26. Step 1: Define your current business model

27. You are in the center!
Your own venture

28. Business Model transactions
Focus to make this flow as smooth as possible. #frictionless

29. Can be more complex.
Many different players, a lot of monetary transactions.

30. Business Model Blocks

31. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Seats2meet - Co-working with Dynamic prices

32. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Indiegogo & KickStarter - Crowdfunding

33. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
New products

34. Your turn!

35. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Cardrops - Delivery service

36. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Runkeeper tracks your runs

37. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Running becomes experience

38. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Sell right to exploit roofs for solar energy

39. Your turn!

40. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
people.io -> Your data becomes ‘money’

41. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Carrot > To-do list with a personality

42. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Carrot > To-do list with a personality

43. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Virtual currencies - Bitcoin

44. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Moskou: Pay with Exercises

45. Product
5
Money
5
Less Money
Experience
Right
Data
1
Reputation
Credits
Service
Exposure
Pay with social reach. paywithatweet.com

46. Your turn!

47. 23andme

48. 23andMe

49. Kaggle

50. The key questions
you need to ask:
What is the best new business model to try?

51. Business Model Innovation
where to find new growth for your business.
Explore extra
revenue sources!

52. Different categories:

53. + specific examples

54. What to pick?
Free!
for the user.
1.
Paid!
the user = client.
2.

55. Free?
Free = Free
There are so many variations on ‘free’

56. What to pick?
Free!
for the user.
1.
- Early exit -

57. Free
(Hidden) other agenda:
- Aim for an early exit.
- Acqui-hire
- Prestige
- …
Rule of thumb:
There is no free lunch.

58. What to pick?
Free!
for the user.
1.
- Early exit -
- Pay-what-you-want -

59. Free?
Customer can pick
his own price.
Pay-what-you-want. (including free)

60. Case: Humble Bundle

61. Pay-what-you-want: Restaurants, Museums,…
Emotional connection
Social/group pressure
…

62. What to pick?
Free!
for the user.
1.
- Early exit -
- Pay-what-you-want -
- Tip jar/ donation -

63. Free?
Main difference:
People often get the product for free, but are
free to do an extra transaction.
Tip jar - Donation.

64. Free, for some.
Different segments of
users.

65. What to pick?
Free!
for the user.
1.
- Early exit -
- Pay-what-you-want -
- Tip jar/ donation -
- Barter -

66. Swap goods, give something else in return.
Many Facebook groups & events: baby clothes, travel,…

67. More controversial

68. What to pick?
Free!
for the user.
1.
Paid!
the user = client.
2.
Reason why people upgrade!

69. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -

70. Some people only want “the best”
Ultimate luxury. €21.000 Smartphone (Vertu)

71. Vanity, reputation…
Vanity is so powerful!

72. Looks & Reputation in games.
To fit in Exclusivity Show Commitment ...

73. Important learning: You need other people to show off!

74. First class sells - because of second class.

75. Pay to get noticed. (above the crowd…)
Would you pay to get seen by your friends on Facebook?
Facebook 2012

76. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -
- Loss-aversion -

77. Another tactic: Lure people in with free + lock-in.
Just give it a try!

78. Lock-in (switching costs, hassle,..)

79. Pay-as-you-go model.
Switching cost?

80. pay-per-use.
Blendle - itunes for journalism (buy per article)

81. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -
- Loss-aversion -
- Privacy/ Anonymity -

82. Privacy features are very powerfull!
Hide your profile.
Incognity mode.

83. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -
- Loss-aversion -
- Privacy/ Anonymity -
- Mystery/ Surprises -

84. Mystery crates (& surprise upgrades)
similar to Lottery system = very lucrative!

85. Real life mystery crate

86. Blind dates, anyone?
Crazy Blind Date by OKcupid. (up to $3/date)

87. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -
- Loss-aversion -
- Privacy/ Anonymity -
- Mystery/ Surprises -
- Convenience/ Shortcuts -

88. Use Sold. The convenient way to sell goods online.
The Gone App: 1 photo to sellHomesnap: 1 photo to get info

89. The (ex-) power of Zynga-like games.
Grind - Spam - Pay

90. What to pick?
Paid!
the user = client.
2.
- Vanity - reputation -
- Loss-aversion -
- Privacy/ Anonymity -
- Mystery/ Surprises -
- Convenience/ Shortcuts -
- Helping peers/ gifts -

91. This one is on me…
Yes, Awesome.
I’m a PLUS member.

92. Virtual gifts to friends.

93. More triggers & inspiration:

94. More triggers & inspiration:

95. More triggers & inspiration:

96. More triggers & inspiration:

97. .

98. Crucial question!

99. Learn from gaming.
Question:
Do you allow people to spend (all their) money?

100. Next Chapter.

101. What to pick?
Free!
for the user.
1.
Paid!
the user = client.
2.
Third party
pays the bills.
3.

102. What to pick?
Third party
pays the bills.
3.
- Advertising -

103. What to pick?
Third party
pays the bills.
3.
- Advertising -
- Affiliate/ Referral -

104. What to pick?
Third party
pays the bills.
3.
- Advertising -
- Affiliate/ Referral -
- Data Reseller -

105. What to pick?
Third party
pays the bills.
3.
- Advertising -
- Affiliate/ Referral -
- Data Reseller -
- Joint-Venture/partnership -

106. What to pick?
Third party
pays the bills.
3.
- Advertising -
- Affiliate/ Referral -
- Data Reseller -
- Joint-Venture/partnership -
- White-label/Franchise -

107. What to pick?
Third party
pays the bills.
3.
- Advertising -
- Affiliate/ Referral -
- Data Reseller -
- Joint-Venture/partnership -
- White-label/Franchise -
- Get-one-give-one -

108. another client pays for your product. (could be anymous)

109. Suspended coffee

110. One Laptop Per Child

111. What to pick?
Free!
for the user.
1.
Paid!
the user = client.
2.
Third party
pays the bills.
3.
Broker/
Matchmaking
4.
Can be a mix of all three.

112. Broker/
Matchmaking
4.
- One-side pays -

113. One side pays.

114. Get paid to date?
Very controversial
of course.

115. Get paid to date.
Other platforms experiment with other rewards than money.

116. Broker/matchmaking
Broker/
Matchmaking
4.
- One-side pays -
- Both sides pay -

117. Matchmaking between 2 normal users.
only 1 of the 2 parties pays.

118. Auction platforms.

119. Broker/Matchmaking
Broker/
Matchmaking
4.
- One-side pays -
- Both sides pay -
- Crowdfunding -
- Penny Auctions -

120. Crowdfunding (many variations)
For pre-sales?
Investment?
Donation?

121. Crowdfunding
The product itself is often not the primary driver:
“Be part of something bigger, a revolution in …”

122. Broker/
Matchmaking/
4.
- One-side pays -
- Both sides pay -
- Crowdfunding -
- Penny Auctions -

123. Penny Auctions

124. What to pick?
Free!
for the user.
1.
Paid!
the user = client.
2.
Third party
pays the bills.
3.
Broker/
Matchmaking
4.
Mixed model
Subsidised
5.

125. Mixed model
Subsidised
5.
- Shop (on the side) -

126. Mixed model
Subsidised
5.
- Shop (on the side) -
- Razor-blade (add-ons) -

127. Mixed model
Subsidised
5.
- Shop (on the side) -
- Razor-blade (add-ons) -
- Credits/points -

128. No easy fix.
But experiment
& learn!

129. First Commercial Validation
Ballpark Figures

130. Exercise: You’ll make a flipchart exercise!
Money in Money out
conclusion:
good/bad?
Revenue model
& pricing?
Costs &
investments?
€ …………… € ……………

131. Exercise: You’ll make a flipchart exercise!
Money in Money out
Revenue model
& pricing?
Costs &
investments?
€ …………… € ……………
This is not business plan of course. But a logic tree to understand the
relations between your main financial assumptions

132. How?
Buyer (User) Frequency Potential Value
= Revenue
Who buys
your offering?
Who uses
your offering?
How often is
offering sold?
How often is
offering used?
How large is
the part of the
total market
that you will
address?
What is the
pricing of your
offering?
x x x x

133. Example: A tool to repair TVs for the German Market.
Tool Repair TVs Germany

134. What - Buyer
Buyer
Who buys
your offering?
TV repairmen

135. What - Buyer
Q1. How many TV repairmen are
there in Germany?
Q: How many TVs break down/year?
Q: How many TVs are there in Germany?
Q: How many households are there in Germany?
Q: How many people are there in Germany? 80M
2 people/household
1.2TV/household
depends on age
Q: How many TVs get fixed/year depends on warranty/age
48M TVs in Germany, but simplify: around 50M TVs

136. What - Buyer
Q: How many of the 50M TVs break down/year? depends on age
Q: How many broken TVs get fixed/year
• <2 year (warranty)
• older (no warranty)
80%
10%
2%
10%
1M
5M
Q1. How many TV repairmen are
there in Germany?
800K
500K
1.3 million TV’s
repaired per year
+
Q: How many repairmen? (assumes close link with total TV repairs)
• Assumption: 1 repairman fixes 2,5 TVs/day
• Assumption: 1 repairman works 220 days/year
1 repairmen can
fix 550 TVs/year Total Repairmen
2000 to 2500

137. How?
Buyer (User) Frequency Potential Value
2250 repairmen
(2000-2500)
(fix 1.3M TVs
of households)
1.5 tools on
average.
But replace
just 1/3 years.
x x x x
• Needs to replace tool every 3 years (?)
• Some have more than 1 tool.
average of 1.5 tools/repairmen (?)
• …

138. How?
Buyer (User) Frequency Potential Value
2250 repairmen
(2000-2500)
(fix 1.3M TVs
of households)
1.5 tools on
average.
But replace
just 1/3 years.
x x x x
• Can you convince 2.5%
of this market to use/buy
your tool?
• …
x 2.5% of
market share

139. How?
Buyer (User) Frequency Potential Value
2250 repairmen
(2000-2500)
(fix 1.3M TVs
of households)
1.5 tools on
average.
But replace
just 1/3 years.
x x x x
• What could be the price?
• How much value do I create?
• …
x 2.5% of
market share
?

140. How?
Buyer (User) Frequency Potential Value
= Ballpark Revenue for this tool of
just €14 000/year (rounded)
2250 repairmen
(2000-2500)
(fix 1.3M TVs
of households)
1.5 tools on
average.
But replace
just 1/3 years.
x 2.5% of
market share
x €500
x x x x

141. Exercise: You’ll make a flipchart exercise!
Money in Money out
Revenue model
& pricing?
Costs &
investments?
€ …………… € ……………
Use your gut feeling to build up up a “logical” structure.
Only after this build start with your financial research!

142. Thanks!