Saturday, April 11, 2009

What is the Lemonade Stand of the Internet?

Everyone has done a lemonade stand or gotten a drink from one. It is the definative small business example and it is a cultural icon for the entrepreneur. So much so, that it is used in schools to teach business issues. But thinking in terms of current business reality, it makes me wonder:

What is the online equivilent for the lemonade stand?

If I look thru my list of Online Revenue Models I see that some are easier to implement. Some things which can generate revenue quickly as a small one person shop. These are different from those things that take some other large component to make it work quickly:

Short term opportunity or easier to do:

As opposed to Longer term harder to do things:


The great things about the lemondade stand is that the goals are clear, the process is clear and it ends up being all about execution.

Looking even closer at the list, it seems that ads and donations are the quickets and easiest.

Easiest:
  • 4. Ads -> Set up a Blog and turn on ads
  • 15. Donations - Ala NPR / Public Radio -> Put up a donate button

A little more work:
  • 5. Sell a product directly -> Requires fullfillment
  • 6. Sell a product Indirectly -> Sign up with Vendor to resell product
  • 7. Subscription -> set up a subscription, membership


While both Ads and Donations require you to create content that is valuable to the reader and then to attract an audience, it seems that ads generate more revenue for the level of work.

This Suggests that suggests that the Lemonade stand of the Internet is to create a Blog and put up ads on it.

The steps to this would be:
  1. Set up a bank account to keep all the revenue in, keeping money separate from the personal money.
  2. Sign up for Blog software - Let's use Google Blogspot - http://www.blogspot.com
  3. Sign up with Ad provider - this is a part of blogspot by clicking on monitize. Ads will be inserted into the blog.
  4. Write content that is valuable to an audience.
  5. Spread the word that you are writing and build an audience.

Does this seem like the simplest revenue and business model on the internet? Would this be the canidate for the "Online Lemonade Stand"?

What would your choice be?


3 comments:

Andy said...

Kevin Kelly wrote about what people are paying for in a network economy, where many "products" are essentially free: http://changethis.com/53.01.BeyondFree

This is a fantastic look at relevance in a time where many business models are crumbling.

Enjoy!

sechrest said...

Yes, Kevin Kelly's outline of what makes a product interesting is worth looking at. But the assumption is that the product is digital.

I suppose that for a "Lemonade Stand" that this is a valid assumption.

However, I think for the broader revenue model question, it is important to remember that many things will never be digital.

Andy said...

I think this applies to non-digital goods as well. Think about food - people will often pay higher prices for food based off it's relevance to the situation (i.e. $5 box of Goobers at the Movies, $4 bags of almonds up at Wicked last weekend, #1 immediacy).

My wife runs a tutoring business - www.inspiretutoring.org - and, I ran a coaching business after I received my Master's; the main attraction to these services is the tailoring of the service to the individual (#2 personalization). Anyone can get free answers to math questions online, but to address their specific needs was a "better-than-free" good.

In fact, I think Kevin Kelly's manifesto applies moreso to non-digital goods than digital goods. When everyone has a good meal for the same price, where do you go to?