“How will this generate income?”
“Can it stay afloat?”
“Is this economically viable?”
These questions and more are what I get tossed at me whenever I pitch a new idea or project. To the average Nigerian startup founder, the most likely answer to such questions would be “Google adwords/adsense”, which is the most popular ad network in the world today. Since a business model based on advertising might not be the best option for some startups, I have listed below some business models that Nigerian startups can adopt.
1. Subscription: This means charging users of your site right from the very beginning. This requires a lot of gumption and courage as most would be users might not be so well disposed to paying for a service that has not yet tried and tested. Also most web users have been spoilt by the FREEMIUM model which is the most popular business model on the web, hence it would be extremely difficult to get those kind of people to pay for what you have to offer. The success of the SUBSCRIPTION model depends on some factors:
(i.) Your Product: Can your product offer enough value to would be user’s to convince them to pay for it?
(ii.) Means of Payment: How easy is it to pay for your service? In a place like Nigeria, where e-commerce and e-payment platforms are either complacent or not interested in offering mobile/web payments, this can be a huge challenge.
2. Incentive Marketing: This business model involves offering discount coupons to users as an incentive to using your website. The income generated from this is shared between you and the merchants/advertisers.
3. Affiliates: This is a variation of the advertising model, and it works by having the website owner advertise goods and services for merchants, thereby providing customers to such merchants and taking a percentage of the sales generated.