Rating: 4/5
Summary
This book focuses on online recommender community, which is a platform (e.g., a website) where the members gather to rate, review, and recommend services and products. An online community will succeed since
Showing posts with label David Silver. Show all posts
Showing posts with label David Silver. Show all posts
Thursday, March 25, 2010
Saturday, March 20, 2010
Entrepreneurial Principles: Eighteen Sustainable Revenue Channels (for an online community website)
When operating a website, the first revenue people can think of is advertisement. David Silver provides us with a lot more revenue channels below:
Sunday, March 14, 2010
Entrepreneurial Principles: Should you sell, or are you having too much fun?
6 Rules to Consider When planning to Sell Your Community
Strategic buyers are the ones who would like to have your community as a part of their business. They see the real value in your community. Financial buyers, on the other hand, seeks short-term capital gain. Their main goal is to come in, restructure your community to increase its value, and resell it to the others. They do not see the real value of your community, and therefore tend to offer much less benefits.
Arbitrage Flip: What a financial buyer is looking for.
Arbitrage means something can be purchased inexpensively in one market, and can be sold in expensively in another market. Financial buyers may spot an arbitrage opportunity. They may spend little money buying your community, and sell it dearly to a company who is looking for an online community. So why don't you sell your community to one of those strategic buyers.
Checklist for Those Who Want to Sell an Online Community
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About the summary: It takes time to finish up a book. And, when you do, sometimes, you want to review what you learn from the book. If you do not make notes as you read, you might have to go through the book once again. This can be time-consuming when you are dealing with a book. But you can still flip through the book and locate what you are looking for
However, when the material is an audiobook, it is extremely hard to locate a specific part of content. Most likely you will have to listen to the entire audiobook once again.
This book summary will help solve the pain of having to go through the book all over again.
I am leaving out the details of the books. Most books have interesting examples and case studies, not included here. Reading the original book would be much more entertaining and enlightening. If you like the summary, you may want to get the original from the source below.
Source: Social Network Business Model by David Silver, Chapter 7.
For more details, get this book online @ books.google.com [Link]
- Do not listen to free advice.
- Do not discuss your plan with your relatives.
- Do not develop an inflated idea of how much your community worths.
- Look for strategic buyers before selling to a financial buyer (see below).
- No one every lost money selling too soon: Do not rush selling your community. Wait for the right moment before selling. Your chance will finally come.
- Consider selling to the public: If you can't find anyone to sell, that's ok. Try the public.
Strategic buyers are the ones who would like to have your community as a part of their business. They see the real value in your community. Financial buyers, on the other hand, seeks short-term capital gain. Their main goal is to come in, restructure your community to increase its value, and resell it to the others. They do not see the real value of your community, and therefore tend to offer much less benefits.
Arbitrage Flip: What a financial buyer is looking for.
Arbitrage means something can be purchased inexpensively in one market, and can be sold in expensively in another market. Financial buyers may spot an arbitrage opportunity. They may spend little money buying your community, and sell it dearly to a company who is looking for an online community. So why don't you sell your community to one of those strategic buyers.
- Positioning: Get to the best position to get the best offer
- Clean out the fat from your company: Make thing more efficient.
- The rate of increase in the number of members is important.
- High renewal rate of members
- Do not discuss about the plan to sell. Keep it secret.
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About the summary: It takes time to finish up a book. And, when you do, sometimes, you want to review what you learn from the book. If you do not make notes as you read, you might have to go through the book once again. This can be time-consuming when you are dealing with a book. But you can still flip through the book and locate what you are looking for
However, when the material is an audiobook, it is extremely hard to locate a specific part of content. Most likely you will have to listen to the entire audiobook once again.
This book summary will help solve the pain of having to go through the book all over again.
I am leaving out the details of the books. Most books have interesting examples and case studies, not included here. Reading the original book would be much more entertaining and enlightening. If you like the summary, you may want to get the original from the source below.
Source: Social Network Business Model by David Silver, Chapter 7.
For more details, get this book online @ books.google.com [Link]
Sunday, March 7, 2010
Entrepreneurial Principles: Disruption, The Sumptuous Impertinence
Disruption
Disruption refers to the act of breaking equilibrium. In the old time, people go out an hunt animal everyday. Their routine is in equilibrium. Then along come agriculture, which disrupt their routine. Just like agriculture, online recommender communities would disrupt the current business model called Antelope Hunt Business Model.
Antelope Hunt Business Model
A picture of an antelope An antelope hunt business model is old business model which works like this 1) Hunting an antelope (i.e., find a customer), 2) Kill it, bring it home, and eat it (Sell things to customer), and 3) Find another one. It is wasteful and costly. While the antelope hunt business model shrinks the market with each sale, the online community business model expands the market with each sale.
Members of an online community find the community by themselves, pay the monthly fee for the privilege of being in the community (possibly for a year or longer), share search and information with other members.
By now, you might wonder who would want to pay for monthly fee, just to be in the community. Well, read along and you will see that the community is a platform where only the members earns money while solving their pain.
Benefit Number 1: A Pain Solver
A recommendation online community is borned from pain. Each member of the community share pain and would be delighted if the community can help them relieve the pain. The pain arises from, for example, time needed to look for what they need. If they are not able to find solution, they will have to put up with what the vendor offers in the market. The first benefit of an online recommender community is to help member solve pain.
Benefit Number 2: A Transfer of Wealth
An online recommender community can act as a revenue generating platform for the members. Again, this is the place where the member rate, review, and recommend products. There are 18 revenue channels, which are the result of the members' actions. The community should share a part of its revenue with members to motivate the member to create more valuable content.
Cost of products consists of production cost and marketing cost. An online community can leverage the marketing cost by doing the marketing for product vendors. The conversation of members can be sliced, diced, and then sold anonymously to the vendor. The vendors will, in turn, benefit from market cost reduction.
Apart from 18 revenue channels discussed earlier, product branding is another one. When a company wants to launch a product, it can hire the community to survey the market, draft a plan, and come up with a fair pricing. The community rates, votes, or even design new products for the company. A community can even sell its brand to the company. The consumers who appreciate the community are likely to purchase the product with community's brand.
Privilege of Being in a Community: Viewing or Creating the Content
Being in a community gives members two above benefits. The former one, pain solver is pretty obvious. Members benefit from truthful information from other members.
But the interesting is the latter one: A revenue generating platform. Here, the privilege is not for viewing the content, but for creating the content. The member can use the community as a marketplace where they can offer their content for sale. The high-quality content will get picked and purchased by the community, product vendors, and/or other members.
The Endowment Effect
People often things they own more than things they do not own. The value of a house depreciated as time elapses. Yet, the owners often refuse to sell their house at the depreciated price.
Similarly, when people become a member, they tend to stick around. It is easier to keep the member in the community, than to persuade people to become a member. But it is also important to give member a glue factor such as lockers, closets, watch us grow page. See [here] for the elaboration of glue factors.
Source: Social Network Business Plan by David Silver, Chapter 6.
About the summary: It takes time to finish up a book. And, when you do, how would you review what you learn from the book. Flip through the books? What if the book is audiobook? You might have to go over the book again. Not plesant.
The summary here contains insights I grasped when I read the book. It will tell you what to expect of the book. Giving key insights and the organization of books, the summary makes it easier and more entertaining when reading the book.
What the summary does not give you is the details (e.g., business cases, anecdotes) and entertainments. So if you think this book will entertain you, you may buy it online here. Also you might want to check out the review of the book which shall be up soon.
Disruption refers to the act of breaking equilibrium. In the old time, people go out an hunt animal everyday. Their routine is in equilibrium. Then along come agriculture, which disrupt their routine. Just like agriculture, online recommender communities would disrupt the current business model called Antelope Hunt Business Model.
Antelope Hunt Business Model
Members of an online community find the community by themselves, pay the monthly fee for the privilege of being in the community (possibly for a year or longer), share search and information with other members.
By now, you might wonder who would want to pay for monthly fee, just to be in the community. Well, read along and you will see that the community is a platform where only the members earns money while solving their pain.
Benefit Number 1: A Pain Solver
A recommendation online community is borned from pain. Each member of the community share pain and would be delighted if the community can help them relieve the pain. The pain arises from, for example, time needed to look for what they need. If they are not able to find solution, they will have to put up with what the vendor offers in the market. The first benefit of an online recommender community is to help member solve pain.
Benefit Number 2: A Transfer of Wealth
An online recommender community can act as a revenue generating platform for the members. Again, this is the place where the member rate, review, and recommend products. There are 18 revenue channels, which are the result of the members' actions. The community should share a part of its revenue with members to motivate the member to create more valuable content.
Cost of products consists of production cost and marketing cost. An online community can leverage the marketing cost by doing the marketing for product vendors. The conversation of members can be sliced, diced, and then sold anonymously to the vendor. The vendors will, in turn, benefit from market cost reduction.
Apart from 18 revenue channels discussed earlier, product branding is another one. When a company wants to launch a product, it can hire the community to survey the market, draft a plan, and come up with a fair pricing. The community rates, votes, or even design new products for the company. A community can even sell its brand to the company. The consumers who appreciate the community are likely to purchase the product with community's brand.
Privilege of Being in a Community: Viewing or Creating the Content
Being in a community gives members two above benefits. The former one, pain solver is pretty obvious. Members benefit from truthful information from other members.
But the interesting is the latter one: A revenue generating platform. Here, the privilege is not for viewing the content, but for creating the content. The member can use the community as a marketplace where they can offer their content for sale. The high-quality content will get picked and purchased by the community, product vendors, and/or other members.
The Endowment Effect
People often things they own more than things they do not own. The value of a house depreciated as time elapses. Yet, the owners often refuse to sell their house at the depreciated price.
Similarly, when people become a member, they tend to stick around. It is easier to keep the member in the community, than to persuade people to become a member. But it is also important to give member a glue factor such as lockers, closets, watch us grow page. See [here] for the elaboration of glue factors.
Source: Social Network Business Plan by David Silver, Chapter 6.
About the summary: It takes time to finish up a book. And, when you do, how would you review what you learn from the book. Flip through the books? What if the book is audiobook? You might have to go over the book again. Not plesant.
The summary here contains insights I grasped when I read the book. It will tell you what to expect of the book. Giving key insights and the organization of books, the summary makes it easier and more entertaining when reading the book.
What the summary does not give you is the details (e.g., business cases, anecdotes) and entertainments. So if you think this book will entertain you, you may buy it online here. Also you might want to check out the review of the book which shall be up soon.
Friday, February 26, 2010
Entrepreneurial Principles: Loyalty and Passion Builders
Loyalty
Loyalty to an online recommender community is similar to the feeling of kids who incessantly want to go back to the same playground. Here are few items that you might consider:
Watch us grow page
Make a map. When a new member join, put a little pin on his/her location. Constantly update this page and you will see how much/how fast your community grows.
It is important to create a sense of ownership for the members. When making a map, consider the types of members. For a general public, a map might be divided into provinces. But if the members are mostly from universities, each location might represent a university.
Every member gets his/her own websites
Give every member his/her own customizable web page. Upon logging in, bring the member to his/her page.
Every member gets his/her own identifiers
Identifiers are things with community's logo on it. Examples are hats, wristbands, mousepads, notepads, prepaid credit cards. Again, engraving the member's name on identifier will help increase the member's sense of ownership. These identifies could be given when the person signs up for a membership.
Members are searchable by victory
Points and/or achievements should be given to members who do good deeds, and they can be used to earn an elite status in the website. Good deeds are, for example, writing a report rated great by other members, catching another member doing a bad thing (e.g., speaking untruthfully on behalf of product vendors), recruiting a famous person to represent the comunity.
Lockers and Closets
A locker is a private storage that no one else can enter. Members can use it to keep secret stuff such as story, password, kudos, newsletter, special email, avatar outfit, etc.
A closet is a public storage for a member. It is the place to store things that members are willing to share with other members. These things are, for example, points, tip jars, etc.
Award status
Make a hierarchy ranking. Award can help elevate the members' status. Member can earn awards by 1) bring in new members, 2) participating in product testing requested by the community, 3) , 4) Story-telling contest, 5) Introducing strategic partners to the community, 6) getting a publicity for the community (e.g., getting a place for a community in the TV).
The unexpected reward
Give out rewards (4-5 times a year) to members without telling them in advance. Announce the award in the newsletter. This can be real money.
-----------------------------------------------------------------------------------------
About the summary: It takes time to finish up a book. And, when you do, sometimes, you want to review what you learn from the book. If you do not make notes as you read, you might have to go through the book once again. This can be time-consuming when you are dealing with a book. But you can still flip through the book and locate what you are looking for
However, when the material is an audiobook, it is extremely hard to locate a specific part of content. Most likely you will have to listen to the entire audiobook once again.
This book summary will help solve the pain of having to go through the book all over again.
I am leaving out the details of the books. Most books have interesting examples and case studies, not included here. Reading the original book would be much more entertaining and enlightening. If you like the summary, you may want to get the original from the source below.
Source: Social Network Business Plan by David Silver, Chapter 5
Loyalty to an online recommender community is similar to the feeling of kids who incessantly want to go back to the same playground. Here are few items that you might consider:
Watch us grow page
Make a map. When a new member join, put a little pin on his/her location. Constantly update this page and you will see how much/how fast your community grows.
It is important to create a sense of ownership for the members. When making a map, consider the types of members. For a general public, a map might be divided into provinces. But if the members are mostly from universities, each location might represent a university.
Every member gets his/her own websites
Give every member his/her own customizable web page. Upon logging in, bring the member to his/her page.
Every member gets his/her own identifiers
Identifiers are things with community's logo on it. Examples are hats, wristbands, mousepads, notepads, prepaid credit cards. Again, engraving the member's name on identifier will help increase the member's sense of ownership. These identifies could be given when the person signs up for a membership.
Members are searchable by victory
Points and/or achievements should be given to members who do good deeds, and they can be used to earn an elite status in the website. Good deeds are, for example, writing a report rated great by other members, catching another member doing a bad thing (e.g., speaking untruthfully on behalf of product vendors), recruiting a famous person to represent the comunity.
Lockers and Closets
A locker is a private storage that no one else can enter. Members can use it to keep secret stuff such as story, password, kudos, newsletter, special email, avatar outfit, etc.
A closet is a public storage for a member. It is the place to store things that members are willing to share with other members. These things are, for example, points, tip jars, etc.
Award status
Make a hierarchy ranking. Award can help elevate the members' status. Member can earn awards by 1) bring in new members, 2) participating in product testing requested by the community, 3) , 4) Story-telling contest, 5) Introducing strategic partners to the community, 6) getting a publicity for the community (e.g., getting a place for a community in the TV).
The unexpected reward
Give out rewards (4-5 times a year) to members without telling them in advance. Announce the award in the newsletter. This can be real money.
-----------------------------------------------------------------------------------------
About the summary: It takes time to finish up a book. And, when you do, sometimes, you want to review what you learn from the book. If you do not make notes as you read, you might have to go through the book once again. This can be time-consuming when you are dealing with a book. But you can still flip through the book and locate what you are looking for
However, when the material is an audiobook, it is extremely hard to locate a specific part of content. Most likely you will have to listen to the entire audiobook once again.
This book summary will help solve the pain of having to go through the book all over again.
I am leaving out the details of the books. Most books have interesting examples and case studies, not included here. Reading the original book would be much more entertaining and enlightening. If you like the summary, you may want to get the original from the source below.
Source: Social Network Business Plan by David Silver, Chapter 5
Sunday, February 21, 2010
Entrepreneurial Principles: Your Community As Theater
The Age of Experience
Let's move back in time to when assembly lines were introduced to the market. This monumental event marks the beginning of the age of quality, where people focused on building products with standardized quality.
When the market is saturated with quality goods, we need services. We need part distributors, retailers, telephone, cable TV, and so on. The age of quality shifted to the age of services.
And now, with the Internet, we are shifting again from the age of service to the age of experience. For a long time, people experience things, good or bad, and they want to share their experience with others. It wasn't easy to do so in the old days.
The internet makes it easier, much easier, to share experience. People email, chat, and blog about their experience. Online recommenders will rate, review, and recommend products and services that they like and dislike based on their experience. In the age of experience, advertisement will no longer be convincing (as it was). The wisdom of crowd will.
Theater
Theater is a place, where directors, actors, actresses present their goods (e.g., their talent). If you think of your online community as a theater, you will be the director and your member will be the actors and actresses. Your job is to prepare a theater for the audience which will come and share experiences with your members.
Name
In the age of experience, names should reflect what experience the audience expect when entering the theater. Well, if you have a lot of money to advertise, you can choose a non-descriptive name such as LUX for soap. A non-descriptive name will catch people's attention. And, you can use advertisement to help explain what the name is, and people will always remember the non-descriptive name. But if you don't wanna do advertisement, pick a name that will inspires the audience to think what you want them to think.
Be Creative, When Designing Your Community
Artists and entrepreneurs are similar. They are creative, and they solve problems. Successful artists and entrepreneurs are those who are able to adapt quickly. The reason is simply because "Perfection is too costly". So start as soon as you can, and then adapt as you move. Try but do not expect to get it right at the first time. When stuck, reformulate the problem. Any problem can be solved if we change the problem into a related one to solve the real issue.
7 Rules for Entrepreneurial Success
Source: Social Network Business Model by David Silver, Chapter 2.
For more details, get this book online @ books.google.com [Link]
Let's move back in time to when assembly lines were introduced to the market. This monumental event marks the beginning of the age of quality, where people focused on building products with standardized quality.
When the market is saturated with quality goods, we need services. We need part distributors, retailers, telephone, cable TV, and so on. The age of quality shifted to the age of services.
And now, with the Internet, we are shifting again from the age of service to the age of experience. For a long time, people experience things, good or bad, and they want to share their experience with others. It wasn't easy to do so in the old days.
The internet makes it easier, much easier, to share experience. People email, chat, and blog about their experience. Online recommenders will rate, review, and recommend products and services that they like and dislike based on their experience. In the age of experience, advertisement will no longer be convincing (as it was). The wisdom of crowd will.
Theater
Theater is a place, where directors, actors, actresses present their goods (e.g., their talent). If you think of your online community as a theater, you will be the director and your member will be the actors and actresses. Your job is to prepare a theater for the audience which will come and share experiences with your members.
Name
In the age of experience, names should reflect what experience the audience expect when entering the theater. Well, if you have a lot of money to advertise, you can choose a non-descriptive name such as LUX for soap. A non-descriptive name will catch people's attention. And, you can use advertisement to help explain what the name is, and people will always remember the non-descriptive name. But if you don't wanna do advertisement, pick a name that will inspires the audience to think what you want them to think.
Be Creative, When Designing Your Community
Artists and entrepreneurs are similar. They are creative, and they solve problems. Successful artists and entrepreneurs are those who are able to adapt quickly. The reason is simply because "Perfection is too costly". So start as soon as you can, and then adapt as you move. Try but do not expect to get it right at the first time. When stuck, reformulate the problem. Any problem can be solved if we change the problem into a related one to solve the real issue.
7 Rules for Entrepreneurial Success
- Рау attention to detail
- Get thongs done on time
- Delegate to others all that they can handle as well or better
- Use showmanship, imagination, dramatize what you are doing
- Take action. If you have the facts and a little common sense, and you move, you've got a better than 50 percent chance of being right
- Do your business homework
- Reinvest your profits - but always keep a liquid position
Source: Social Network Business Model by David Silver, Chapter 2.
For more details, get this book online @ books.google.com [Link]
Sunday, February 14, 2010
Entrepreneurial Principles: Why not start 5 simultaneously
The Ease of Launching Community website
An online community website has extremely low cost to launch. One requires only to identify an area where people suffer who are willing to collaborate and pay small amount of money to get information. You may lunch one by yourself, and launch another by acquiring the existing another website.
Acquiring Strategies
There are a lot of mediocre community website on the Internet. Some of these are funded by venture capital who granted the money for the startup. The venture capital does not want to sale the average website for lower price. If you own a great community website, you might offer a stock trade. Give them a small portion of stock, and ask for a large share on their website. They will be delighted to do so, as they can get rid of the poor website, even if gaining only a little bit of your website. Then, you can restructure and transform the poor website into a great one.
Source: Social Network Business Model by David Silver, Chapter 4.
For more details, get this book online @ books.google.com [Link]
An online community website has extremely low cost to launch. One requires only to identify an area where people suffer who are willing to collaborate and pay small amount of money to get information. You may lunch one by yourself, and launch another by acquiring the existing another website.
Acquiring Strategies
There are a lot of mediocre community website on the Internet. Some of these are funded by venture capital who granted the money for the startup. The venture capital does not want to sale the average website for lower price. If you own a great community website, you might offer a stock trade. Give them a small portion of stock, and ask for a large share on their website. They will be delighted to do so, as they can get rid of the poor website, even if gaining only a little bit of your website. Then, you can restructure and transform the poor website into a great one.
Source: Social Network Business Model by David Silver, Chapter 4.
For more details, get this book online @ books.google.com [Link]
Thursday, February 11, 2010
Entrepreneurial Principles: Mimic the baker and copy Starbuck
Scarce v.s. Non-Scarce Resource
Doing business on non-scarce resource is hard, because consumers holds the power. So, how should one proceed? Keep cutting the margin against competitors? Does it sound like all entrepreneurs will spiral down to the extinction.
The Bakers
Bread is ubiquitous. If bread is the only thing sold in a bakery, all bakeries would keep lowing the price to attract more customers. But the bakers can make a non-scarce resource scarce by turning bread into pastry and cake. Think about how the wedding cake become the center of the wedding ceremony. If the Internet is bread, we, the bakers, are the entrepreneurs. And, our product such as community websites are pastry and cake.
Personality
Personality differentiates one person from another. It can be look, sound, smell, or tastes. The personality for a pastry would be its look, smell, and taste. It differentiates one pastry from another. Equip your community website with a warm and welcoming personality to attract more members.
Starbuck Business Model
Coffee is ubiquitous. But why Starbuck thrives so successfully. Get into Starbuck and look into its menu. You will see that most of the drink cost Starbuck about the same to make. But Starbuck charged them so differently. The price is not based on cost, but on the willingness to pay. The price tells how special the buyer is.
So if you are launching a community website, and you are providing a tip jar, here is the guideline you might want to adopt. Some people may not know how much they should tips the others. Why don't you put a tipping guideline. Follow Starbuck! Then, the tips should be based on how serious the problem is. For example, running nose $5, headache and congestion vanish $10.
Source: Social Network Business Model by David Silver, Chapter 3
Find the book online @ books.google.com [Link]
Doing business on non-scarce resource is hard, because consumers holds the power. So, how should one proceed? Keep cutting the margin against competitors? Does it sound like all entrepreneurs will spiral down to the extinction.
The Bakers
Bread is ubiquitous. If bread is the only thing sold in a bakery, all bakeries would keep lowing the price to attract more customers. But the bakers can make a non-scarce resource scarce by turning bread into pastry and cake. Think about how the wedding cake become the center of the wedding ceremony. If the Internet is bread, we, the bakers, are the entrepreneurs. And, our product such as community websites are pastry and cake.
Personality
Personality differentiates one person from another. It can be look, sound, smell, or tastes. The personality for a pastry would be its look, smell, and taste. It differentiates one pastry from another. Equip your community website with a warm and welcoming personality to attract more members.
Starbuck Business Model
Coffee is ubiquitous. But why Starbuck thrives so successfully. Get into Starbuck and look into its menu. You will see that most of the drink cost Starbuck about the same to make. But Starbuck charged them so differently. The price is not based on cost, but on the willingness to pay. The price tells how special the buyer is.
So if you are launching a community website, and you are providing a tip jar, here is the guideline you might want to adopt. Some people may not know how much they should tips the others. Why don't you put a tipping guideline. Follow Starbuck! Then, the tips should be based on how serious the problem is. For example, running nose $5, headache and congestion vanish $10.
Source: Social Network Business Model by David Silver, Chapter 3
Find the book online @ books.google.com [Link]
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