Thread

I’ve noticed there’s been alot of chatter this week at tech-news-type sites about the future direction of Open-Source and the types of business models that were utilized in the past to fund and support these types of ventures and how they are having to change now, and i am wondering:

Does anybody know of, or has seen a business/tech book where a person can learn about the different types of business models that have been utilized by successful tech companies and open-source ventures?

It seems most for-profit tech business models make there money thru selling a product and offering support, or just selling a service. Whereas open-source business models in the past seemed to be based on generating cash thru only software support. Then came along hosting-type models where the majority of funds are generated thru the promise of reliable, problem-free hosting of the software. What other types of tech business models have you seen or tried?

@Zimco this is a great topic for discussion.  You somehow read my mind 

With the possibility of the current global recession, and a decline in people wanting websites we should all address our long-term business models.

We are working on a business model ourselves and would be happy to discuss once completed.  I can say that having alternative income streams apart from just the development business would be wise. 

- One point would be to have additional products.  It could be anything from a simple aggregator to an online website that brings the artist community together.  What we need to do is research and see what the market needs.  BTW lots of web dev companies have gone this route.

- Another point to address is what the market demands at this current stage.  For the most part i think its simple information websites that you can churn out on one base code.  Also i would say make sure to have your forms correct. 

Make your forms look beautiful as well as functional.  Simple stuff here, and make sure to maintain a very good quality.  Throw in some backend stuff(login, commenting etc etc) and your clients will love you (if you have clients that is). One animated gif instead of flash will also impress alot of people.  GIVE THEM EXACTLY WHAT THEY DESERVE,and then throw in some freebies while maintaining a high level of quality.

Thats not to say don’t go all out with higher end clients.  Try to model around both, but go for the *commercials first. 

- Structure your services and charge by technology. Package 1:  xhtml/css/one static banner etc. Package 2:  xhtml/css/javascript/flash banner. etc etc Package 3: xhtml/css/flash/php(CI) + maintenance contract.  You can even go the CMS route and charge extra for the docs to train their staff. This is debatable..

Lastly i would like 2 things, because i too was a techy, and still am a techy and will always be a techy: 

(1)  For business its a volumes game, and will usually be a volumes game for smaller individuals and companies.
(2)  For you all techies out there, learn how the business side works.  Sure man you have a great app and you can code over 2000 lines, but if it aint marketed properly then what.  THEN WHAT MATE?  Just think of it like that.  [No disrespect intended here] Concentrate on the marketing and protect all that TALENT that you so rightfully should cash out on.

Another model here for you in lieu of the above points:  PAY AND GO!

featureBlend, Great post and i look forward to hearing more about your business model once it is crafted.

I’m a business book junkie but have not found one yet that talks about the types of business models used by, or issues facing people who work in internet based businesses: web design/development, web application programming, hosting, community driven sites, etc.

I see your point about having additional web “Products” as add-ons to entice potential clients and i too have noticed more and more designers posting their “products”. I think this is definitely a trend. However, i wonder after a few years will they want to continue to try and support these products as the technology underneath them (webservers or programming languages) change and their product begins to fail or throw errors?

I’ve noticed that as more people use and become comfortable with using pre-built web-based applications like popular blogging software, and CMS’s, they begin to expect, and look for other web-based products they can just drop-in their site and don’t understand why sometimes they can’t have this, and that, running at the same time!

I like your idea of structuring services. I’ve often run into the inevitable problem of “scope-creep” in developing websites: in the beginning client clearly tells you we only need 9 web pages, but by the end there’s over 23, plus they ask you to install this great piece of web-based software they found and promise to send that final payment check right after you get that installed for them. In these types of cases, having a structured service clearly laid-out would definitely help to alleviate “scope-creep”.

I think your idea of offering a “training service” is also another valid addition a person could add to their tech business model to generate cash. Believe it or not, i once had a client ask me if i offered training on Wordpress!

I agree with you that business is a “volumes game” but maintaining a constant flow is difficult especially if you have to be the one doing the coding and trying to run-down sales leads at the time. I’ve seen some design firms now concentrate their efforts on maintaining a clients website for them after it’s initially built by charging a monthly maintenance fee and only have to sporadically make minor adjustments to the site for that monthly fee, but have that cash flow to rely on when getting new business is slow.

Somebody just sent this link to me so i’ll throw it out for others that might be interested:
http://www.internetbusinessmodels.org/

You might want to read “The Purple Cow” by Seth Godin.

I was at first excited at your book recommendation, especially after reading the sample chapters on his website.  Then I read a handful of the reviews on Amazon.  Are these negative reviews merited?  And can you recommend any other books on the topic?  I was looking for something on the topic of tech business and marketing them but also with a similar focus on inspiration.