Web Business Models - Bizcamp Dublin

Web Business & Revenue Models

Caelen King CEO RevaHealth.com

@revahealth.comblog.revahealth.com

Who Am I

Product Manager Baltimore Technologies. Software license sales > €150 million.

CEO & Founder of RevaHealth.com. Raised > €2M. Subscription, Transaction & Advertising models.

VP Product NewBay Software. White labelled web apps > 15 million users

A Start up Revolution

Never before has it been possible to build a global business with so little capital

Web Business 101

Who will pay?

How much will they pay?

How will they pay?

Can you reconcile revenue to costs?

Merchant Operating a Market

Application Provider

Utility Publisher or Broadcaster

5 Web Business Types

Software License

White / Co Labelling

Mark Up

Commission

Subscription

Pay Per Use

3rd Party Sponsorship / Advertising

Reven

ue M

od

els

3rd Party Sponsorship

Mark Up

Pay Per Use

Operating a Market

Subscription

Commission

Publisher or Broadcaster

UtilityApplication Provider

Merchant

Software License

White / Co Labelling

Webware top 100

Software License - Problems

Profitable deals can turn unprofitable in year 2 & 3.

Requires world class sales or distribution team and difficult to scale

Product become sales driven, not market driven resulting in feature bloat

White Labeling

Develop, maintain, deploy and operate massive web application for organizations with an existing consumer base

Puts you more in control of your own destiny than software licensing

Much better long term revenue model

Still requires high level sales or distribution channels

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Subscriptions

Beautiful Revenue Model

We’re Rich

Hooray!

Churn

5% Annual Churn

Hey I’m still pretty rich

15% Annual Churn

Ok, I can deal with a smaller car

30% Annual Churn

I’ll get the bus to work

50 % Annual Churn

I’m screwed

Things to know about subs

20% Churn = 100% customer satisfaction.

You must price discriminate

Raise your price

channels

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Advertising

25

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27

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Pay Per Impression (PPM)

RevaHealth.com can earn $5 PPM

Low risk low reward

Need a lot of impressions

channels

Pay Per Click (PPC) – self sell

RevaHealth.com can earn ~ $1.2 per click on average

Click through rates of 3-4% (7 ads)

Equivalent PPM of about €35

CPC works best if you have transient visitors

Pay Per Action & Affiliates

RevaHealth.com can earn 10% commission on a PPA basis

This is where RevaHealth.com gets paid if the patient actually gets a treatment done

Translates to a €400 PPM

Why we don’t do PPA

Collections & Cash Flow

We do Pay Per Lead

Answers the collections issue

Better monetization than PPC

Not as good as PPA

However better cash flow and costsPPM

3rd party sponsorship lessons

Move as far up the risk categories as possible. PPM – PPC – PPL - PPA

PPC – Tweak & Test and double your revenue

At some point you have pimped out your application too much - StopPPM

[email protected]@revahealth.comslides on blog.revahealth.com