Rotary International is an international service organization whose stated purpose is to bring together business and professional leaders in order to provide humanitarian service and to advance goodwill and peace around the world. It is a non-political and non-religious organization open to all.
They had a great value proposition. They had a great user base and active users of their product.
They have tested their business model but yet the future of their business looks unsustainable.
For some years, Google business operated without a revenue model. They wanted the experience of their search engine to have an edge over the others in the search engine market.
They wanted to build a search without ads biased ranking. They wanted to rank pages based on quality and relevance.
But, how do they sustain a business without a revenue model. This is to show that the revenue model is actually one of the sustainability factors of a business.
In other words, how will the business make money to continue its operations and have resources to steer growth?
The Google founders (Sergie Brian and Larry Page) tried to solve this critical issue in their business models as explained in 3S rules. Fortunately, they arrived at Google Adwords, Google Adsense and other monetisation strategies.
In this second series of business model analysis, we shall be considering how to design your revenue model in such a way that the business model will be balanced.
Let’s get started;
The Two Components of Value Valuation in a Business Modelling.
We have to look at the concept of revenue in a very clear way. What do you think will make the target market to exchange money for what you sell?
What mode do you intend to collect revenue from them? Here are two ways to go about this;
Product/Offering Of The Business:
Revenue is a product of the offering or the product you are giving to the market target. This is a well packaged value proposition and solutions to a specific need or problem of the target market.
Products or offerings are packaged solutions and packaged value propositions. When I teach copywriting or write copies, I call this an irresistible offer that will persuade clients to pay you and make you stand out in the market.
Continuing with the example of Google, their offering is providing a search engine to organize the world’s information and make it useful and accessible to everyone.yes,your product and offering first.
Revenue Modelling:
How do you want the users of your offering or product to pay you for rendering such services to them? How do you want your prospect to pay you for solving their problem with your product.
You know the concept of revenue modelling goes with the concept of exchange. That is your business is offering a solution and the market target is paying to have the solution.
The question is this; how do your prospects pay for your solution or your offering? This brings us to the concept of revenue modelling.
It is simply a design of how you want the market target to pay for your products. We have some of the following revenue models used in business;
The user of the product or offering pays for the product and has access to use it for a certain period of time. When the time elapses, he will have to subscribe again or pay again to enjoy the service for a specified period of time.
A good examples is Data Subscription of telecom companies (Mtn, Glo etc)
This is simply charging a percentage from the transaction that takes place through your offering or product. We have Uber as a clear case study of this revenue model.
They provide the platform for the driver and rider, they take a cut from revenue made.
This is using the data of the users of your platform or products as a revenue modelling tool. You sell these refined data for advertisement by other businesses.
This is how Google and Facebook work.
You provide a basic free version of your product and a paid version. The free version is a lead generation tactic and the paid version is where users have to pay.
I explained in this article “while the freemium model is not free.” A good example is Linkedin.
In this revenue modelling, the users pay directly for using a particular product. This is a very good example of how traditional businesses operate.
A good example is Supermarkets and retail stores where you pay for what you buy instantly.
You need to model your revenue based on what is suitable and strategic to your offering and business model. Sometimes, you may consider more than one business model in one business model.
Tekedia Mini-MBA webinar is now daily, starting tomorrow. Saturdays 11am and Weekdays (Mon to Fri) 11am Lagos time. For tomorrow, see Week 3 board – https://www.tekedia.com/2week3/ . The webinar will focus on Q/As, light lectures and community connections with invited guests and faculty.
We have published guidelines for the Certificate program capstone. Tekedia capstone is a research paper or a case study exploring a topic, market, sector or a company. You must have attended, begun or about attending Tekedia Mini-MBA to qualify to register. Learn more and register if interested here – https://www.tekedia.com/capstone/ . Here are the programs.
We have a video introducing the Certificate program along with the unveiling of registration for Tekedia Mini-MBA 3rd edition. Visit here – https://www.tekedia.com/mini-mba-3/
Tekedia Team
Professor Ayobami Ojebode of the Department of Communication and Language Arts and other African researchers in academic and industry are expected to produce reports that enhance Africans’ digital rights. According to the Institute of Development Studies situated at the University of Sussex, Professor Ojebode will be working with other researchers from Access Now, CARD Ethiopia, Amandla.mobi, the Association of Progressive Communications (APC), the Collaboration on International ICT Policy for East and Southern Africa (CIPESA), the Digital Society of Zimbabwe, New Zambian Innovations, the University of the Witwatersrand, HU University of Applied Sciences Utrecht, the University of Edinburgh and the University of Zambia.
Information from the Institute indicates that Professor Ojebode is among the network of researchers dubbed “the Digital and Technology Research Cluster” who will work on a research project that worth £150, 000 in funding. The project, according to the Institute, is being supported by UKRI – GCRF Digital Innovation for Development in Africa (DIDA).
“This collaborative research project includes activists, analysts, and practitioners with deep contextual knowledge into a multi-disciplinary research team. The network will begin by producing seven Country Digital Landscape Reports to scope the existing political and technological landscape in Nigeria, Ethiopia, Uganda, Kenya, Zambia, Zimbabwe and South Africa.
An analysis of existing capacity and gaps will inform the design of a broader programme of research beyond the inception year. We will use the Country Digital Landscape Reports to identify cross-cutting research themes and produce thematic reports that build the knowledge and capabilities of citizens to exercise, defend and expand the rights guaranteed to them in law but denied to them in practice.”
Information from the funder also indicates that the fund is allocated from a £1.5 billion fund to support cutting-edge research which addresses the problems faced by developing countries. Professor Ojebode has been deploying his skills, knowledge and experience in development communication and studies towards sustainable development in Nigeria and Africa since 2002.
Professor Ojebode and others are expected to deliver reports that equip Africans, especially people with significant interest in ensuring good governance and sustainable development on the continent by addressing development challenges in political and technological landscapes, with better resources and processes. Successful completion of the project means that the researchers would have opportunity to access parts of £19M allocated for six to eight projects for the 24 Network of Researchers by the UKRI – GCRF Digital Innovation for Development in Africa. According to the funder, “the projects in the second stage could be either a research project or enhanced network building through a ‘Network Plus’ grant.”