netzooid

We’re building a “Web 2.0” application (still low key while we prepare for loads of users and move to different pricing…) and the economics of it are that the value is different to different people within the industry we’re targetting. Umair recently mentioned again one of the fundamental questions bugging us:

Is Web 2.0 really just about price discrimination?

We’d like to be able to charge more to the customers that we delivered more value to.

In addition to the above question I’ve been thinking about Tim O’Reilly’s aphorism “drive usage, monetize later”. At first this didn’t make sense to me, but the more I thought about it, the more it clicked. One way I’ve started thinking of the web is like a Monopoly board. You have pieces which individually may make little or no money, but when combined a revenue opportunity appears. The Yahoo/Konfabulator deal is the latest of these. JBoss and Hibernate is another good example.

But no one wants to buy us right now and we could never cover our costs if we started giving it away free. So how do we deliver a value to all segments, while still making a profit? Right now our plan of action is creating different plans – including a free one. We’re also working on some farther out ideas that won’t be ready for a while. I’ll certainly be reading more of Umair’s blog and be on the lookout for other ideas.

This entry was posted on Monday, July 25th, 2005 at 5:49 pm and is filed under Tech Ramblings.