Tim Marman's Loosely Coupled

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• Dissecting Yammer: A Revenue Stream is not necessarily a Business Model

  I mentioned that I thought Yammer had a flawed business model , and I’ve been planning on expanding on that for awhile now. I recently revisited the topic with Corey and Dan in light of a NY Times article suggesting that Twitter had popularity and Yammer had a business model. While I find Yammer very useful for our communications at Notches , it’s not fair to say that "they have a business model and Twitter doesn’t". This juxtaposition of “popularity vs. business model” is just improperly framed - Twitter could very easily offer the same private group functionality. The problem, I think, is confusing revenue with a business model . Bringing in revenue doesn’t mean they’ve figured out how to best monetize communications. I would venture to guess that their cost per user is near or higher than $1 per month with SMS fees and infrastructure. There is no doubt that showing some revenue early on is a great thing for a startup, but to be really relevant it needs to be “core” revenue... Posted Nov 03 2008, 10:06 AM by Tim with | with no comments Filed under: Rants, Innovation, Business, Entrepreneurship, Venture Capital, Twitter

• Innovation, Disruption and The Economics of Free

  Hank Williams managed to stir up quite the controversy with his recent post lamenting the rise of free and blaming the VCs . His assertion is that the venture capitalists have made free, ad-supported businesses the norm and effectively "ruined it for everyone else" (my words). I believe it should be possible to start a small business and to have a small number of profitable customers, and to earn a living. From there, it should be possible to work hard, and to grow your business into something substantial. Until recently, this was the American way, and it applied to technology as much as to any other business. But no more. In today’s “free” world, in most online business categories, it is inherently impossible to start a small self-sustaining business and to grow it. This is because in the digital world, advertising, the only real revenue stream, cannot support a small digital business. If businesses were based on the idea that people paid for services then small... Posted Apr 08 2008, 10:41 PM by Tim with | with 4 comment(s) Filed under: Rants, Innovation, Business, Entrepreneurship, Startup, Venture Capital, NextNY, Notches