TC Teardown: 13 Ways To Get To $10 Million In Revenues (Part I)

http://techcrunch.com/2010/10/10/teardown-13-ways-10-million-revenues/

by cwan • 16 years ago

53 12 16 years ago

I love the implication that there are only 13 kinds of consumer startups, as if nothing else could possibly exist. My reaction is to run screaming from anything on that list.

byrneseyeview• 16 years ago

(Before you post in the comments about how unique your startup is, this list is not meant to capture every consumer business permutation. There are always going to be exceptions. And the breakaway companies like Zynga, Groupon, Facebook, Twitter, and Foursquare, to name just a few, inevitably introduce nuances to pre-existing models.)

The point of the article is to illustrate how different kinds of businesses make their money. The main exceptions I can think of are:

* Ad arbitrage. (Lots of people nobody has ever heard of.)

* Free analytics monetized through data sales. (bit.ly, lots of ambitious but ultimately failed startups.)

* White-labelable features. (bit.ly, Geezeo.)

* Email newsletter management.

* Ad networks.

But most of these stretch the definition of "consumer" startups.

ryanwaggoner• 16 years ago

White-labelable features and email newsletter management would both fall under "provide paid service". And ad networks could be viewed as a type of lead generation.

callmeed2• 16 years ago

"assuming you have a good product that the market wants"

Oh yeah, that ...

garply• 16 years ago

The goal of reaching an amount of revenue instead of profit makes me think:

"Buy 20 million dollars worth of products and sell them for half-price."

dzlobin2• 16 years ago

The only model displayed here that has to do with physical products takes costs into consideration.

Other than that, surely if you're making 10M a year on any of these business models you won't have operating costs of anywhere near 10M a year.

callmeed2• 16 years ago

I wouldn't be so sure. I'd venture to guess there are plenty of startups who only break even (or worse) when you add their operating costs + customer acquisition costs.

Murkin• 16 years ago

Clicks on paid links - 5%

Can anyone confirm this statistic ?

JonM• 16 years ago

Nope. All approximations, but it doesn't sound crazy; considering that someone has inputted a search term and the link will be related to that term. Obviously there are loads of variables but it's probably of the right order (single percentages)....

I've inserted all my company data into the "Social Network" model to see why we aren't netting $10MM yet.

Our main discrepency is Pageviews per UV and sell through rate.

I've got plenty of ideas on how to improve the Pageviews per UV. Sell through rate and CPM are more of a challenge.

sanswork• 16 years ago

I work in search advertising and 2-5% CTR is pretty much the range of organic traffic. Variables would of course be the quality of the ads and the quality of the traffic but that figure should be easy to reach.

Also the number of searches is low and the payout is high for what most people can expect to make on search traffic.

50 million searches a day isn't that much let alone per month. 35c cpcs are rare unless you get a good deal from a Tier 1 network which you almost certainly won't until 50 million searches a day is nothing.

stevencarpenter• 16 years ago

Hey guys, this is the author of the Teardowns. Happy to talk more about the cost structure of different models, if you find it helpful. Just let me know what kind of biz you are thinking abut doing and I can help out.

TC Teardown: 13 Ways To Get To $10 Million In Revenues (Part I)

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