Diary of an ex-banker — Part Eight - JsixQ : Caterpillar to Butterfly? Finding a Business Model.
So, we had an idea that we loved, a polling app, but could the caterpillar turn into a butterfly? Could Just Six Questions become a viable business?
Even though we wanted to create the app because we loved the concept, rather than to make money, it had to generate revenue to pay all the set-up and running costs…and our salaries. So we would need a sustainable business model.
Guiding Principles
However, there were three things that we agreed upon immediately based on our own likes and dislikes:
- The app must be free to download and to use.
- We didn’t want any advertising.
- We wouldn’t sell or share users’ personal data.
These would become our guiding principles that we would write into our business plan.
Now we had to find ways of generating revenue without breaching these principles.
App Business Models
Broadly speaking, there are five app business models:
· Free, but with Ads (In-App Advertising)
· Freemium (Locked Features) — the basic app is free, but certain features are locked and only available if you pay.
· Paywalls (Subscriptions) — similar to the Freemium model except that it focuses on locking content, not features. Paywalls allow an app user to view a predetermined amount of content for free but then they must subscribe and pay.
· In-App Purchases (Selling Physical/Virtual Goods)
· Paid Apps (Cost Money to Download)
Our guiding principles seemed to eliminate 4 of the 5 and that only left In-App purchases / Selling Goods which wasn’t what we were about.
Surely, we couldn’t fall at the first hurdle? A period of head-scratching ensued!
Then, we had a ‘light bulb’ moment. Although it had never really occurred to us, what we were planning to do was very similar to existing market research. A company or political party would pay a market research organisation to ask a representative group of people questions on a particular topic and then give their views. The main difference is that we wanted to ask everyone, rather than rely on small samples, and to share and publicise the results freely.
Georgia and I immediately signed up to a large number of market research websites and apps to see what was out there. Another difference between what we wanted to do and what is being done became immediately apparent. Most online market research is seriously boring!
Online Market Research
Based on my experiences this is what you can expect:
- You register with a site and have to give large amounts of personal data
- You then get a notification telling you that a survey is ready for you
- You click on the survey and are asked to input again some of the personal data you have already given (age, salary range, profession are typical). Why, as they already have this info?
- At least half the time you are then told that they have enough people with your demographic or simply that you are not eligible for the survey (why did they send it to you in the first place?)
- If you are lucky enough to do the survey it is often long and tedious and there is a strong temptation to click on the first answers to try and finish as quickly as possible.
- You are rewarded with points which can be converted into vouchers when you accrue enough
Clear Blue Water
The differences between what we wanted to do and what already existed were immediately clear. Where they were long, dull and uninspiring we would be fast, fun and engaging. Few people are willing to commit 20 minutes every day to answer a long list of questions. But they might just commit 3 or 4 minutes if the experience was enjoyable and they knew what to expect…Just Six Questions!
So it was decided. Our revenue would come from companies, charities, political parties, individuals etc. paying us to ask questions via the Just Six Questions app. We knew that what we were planning would only be suitable for a sliver of the current market research industry, but as that was worth around £4.8Bn in 2016, we felt that even a sliver would be enough to sustain us. And we had a few ideas of how to expand beyond the existing market. Of course, persuading hundreds of companies we had no relationship with to pay us to ask questions on their behalf would be a massive challenge, especially in the beginning, but it was one we were up for.
Now we had a business model we could write our business plan and move on to the next stage.
Originally published on www.jsixq.com
