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coolworl

November 28, 2007

Posted by coolworl

Starting out by relying on donation as revenue. Will it bite me at the end?

I have various ideas how I should generate revenue. One of them is to rely on donation after a transaction has been completed. If the donations does not reach my goals or to sustain the business, I will then start to charge by a small persentage from the transaction. What are your opionion on this donation concept? Have you seen other type business survive with this idea or make it big? If I start charging members do you think they'll be put off by it then join other similar copy cat sites with free/donation base service? Lets imagine that there is a fair amount of members and the website is very active. I know this is a broad question, but your 2 cents will appreciated.

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LifesaPretzel

November 28, 2007

Posted by LifesaPretzel

4 stars ( 2 ratings )

This is a great question. What it boils down to is what industry or sector is your business in? Take a look at Wikipedia which is run completely by donations. So far the donation system has worked very well for the company however, I think that is more due to the companies mission statement of free information in the hands of people not companies.

Take this for example, if you had to donate to Wikipedia or nobosh Answers which company would you donate to? I'm going to guess Wikipedia as its a company by the people for the the people, etc...

Are you able to talk about what your company does? Who are the clients etc? Or provide a comparable company? I'd love to keep this thread going.

Comments

  1. coolworl: You have a good point. My company will be comparable to Ebay and Craigslist. A portal for vendors and comsumers where they can come togather and organize agreeable transactions. I wish I can discuss more in an open forum but that will be shooting myself on the foot. I hope you understand. However, your comments are valuble. If I make it I'll definitely won't forget you.

    Craigslist is also free right?
  2. LifesaPretzel: Craigslist is not entirely free. Posting a job on craigslist costs 25 dollars. There is plenty of room for growth on the internet. I like that your not intimidated by the 30+ billion dollar companies. Be sure to research the competition before investing heavily.
  3. coolworl: Yup, just found out from their FAQ.

    Actually, I wish I can generate enought intimidation so someone will want to buy me out. If my site does make it, it's all because I filled the people's needs and it will naturely empower itself. So far, I haven't found any competition with the same idea. There are similar ones but they focus on certain products. However, I'm still up in the air if I should make this totally free and shoot for the big bucks at the end, or charge now and take
  4. coolworl: the risk of not getting enough traffic. Also, it is the additonal complication that needs to take in consideration if I start charging. Think about the invoicing development. I imagine it will have to be automated at some point and it may require some heavy construction of the site. That means more maintanance and money.

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adamsjak

November 28, 2007

Posted by adamsjak

0 stars ( 0 ratings )

If you are running a public service or non-profit, great. You'll have a chance. Anything, else no. Does your business plan generate revenue? You can't count on donations to survive, that's insanely risky.

Comments

  1. adamsjak: What is the business idea?
  2. coolworl: My comments above should answer yours. Any comments on the Craigslist part?
  3. adamsjak: It sounds like b2b, business-2-business services. like business.com or alibaba, right?
    Answer two questions for me:
    1. Is what you are doing already being done?
    2. How difficult would it be for eBay or Craigslist to update their systems to provides services similar to your idea? If its similar you should pitch the idea to the companies or a VC firm.
  4. coolworl: Similar to Alibaba but not B2B. It's more business 2 public consumers.

    1. Not quite. Other site gear towards a certain products or industry. Mine would be open to all.

    2. Ebay and Craiglist are multibillion dollar companies. I don't see any difficulties for them to immitate. However, I have a head start. Which you just made me closer towards the donation strategy. I don't think I'll stand a chance if I start charging. What does VC stands for?
  5. coolworl: Also, mine would absolutely free! Until I can't sustain anymore. I hope members would understand if that's the case.

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