This is a business model [BM] that works very well for entrepreneurs who are active on Social
Media
[SM] platforms and have a large and growing following. Certain basic
products are offered for free while a premium payment is set on advanced
features and perks. However, you need be careful what you give away, make sure
users still need or want to upgrade to the paid option, else you may not recoup
all that you spent to create the product or service.


Practically every social service online uses this model. They give
free content that people find useful for years before introducing the item for
sale. People who have enjoyed the free benefits will already trust you, that
your offering is of good quality, and be willing to give back. Be sure that the
product for sale is relevant for the persons and the season.


Before designing this business model, deciding
it will be the best for you, and giving away freebies in anticipation of
eventually selling your product, determine your target market by answering four
pertinent questions:

1.     Every business idea is
specifically designed and packaged to solve a specific problem. That is the
rationale behind every product or service. Therefore, the first step to product
design is clarity about what problem the product solves, and who has that
problem. Who are your target
customer segments?


2.     Where can your buyers be found?
Your prospects
are not everywhere. You need know how and where they can be found. To discover
where to find buyers of your offering, you need be armed with information on their
interests and what they spend time doing. An entrepreneur’s job is to create
the demand side and the supply side of the business. At the time you start
developing the product, there is likely no demand or supply side. Take comfort
in this: the supply side you are already handling. Create the demand side by
taking the solution you created to those that need them. 


3.     Can they pay for the solution?
This will
ultimately determine whether your product will succeed in the market or not.
According to one of the laws of value, until people exchange money for
your product, it does not have value.
If they cannot, you are
not in business.


4.     Who else has the solution you are working on? The products of a
business are for a set of people, but if they find an alternative source which
is cheaper, better, or more efficient, you have lost potential clients, even
before your business starts. No business operates in a vacuum, unless and until
your business idea is patented or registered as a Trademark, the competition
will be a threat to your business profit.


What advantage this BM? You attract a user base not with
costly adverts, but by your value-enhancing freebies. Secondly, over time, your
buyers gain confidence in the quality of your offerings and trust you. Examples
of businesses that use this model are:

1.     LinkedIn: users share professional profiles, while the premium offerings are
talent solutions with added features.


2.     Vimeo – users share videos on the platform for free and may scale up to an
enhanced service, at cost.


3.     Tinder – a free dating app for which at point of joining, your credit
card details are received pending subsequent payment.


4.     Enduring Wealth with
Mopileola

– an online learning platform which grants Start-up
Entrepreneurs and Small Businesses coaching, business support, and mentorship
via E-books, WordPress Blogs, YouTube Videos, and Capacity-building Workshops.

 

#entrepreneurship

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#EnduringWealth

 

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