10 Ways to Profit from Your Online Community
David Silver, founder of Santa Fe Capital Group, offers 10 tips to help your online community prosper.
1. Start a tip jar. Solicit payment from members for the best stories or movies, research, answers to quizzes or photos, with the contributing member receiving 70 percent and the community receiving 30 percent.
2. Give kudos. Payments in scrip (think gift cards) that act like tip-jar money but can be used to buy products or services offered in the community or exchanged at the online foreign exchange market.
3. Charge a reputation management fee. Publish a monthly newsletter where, among other things, corporate decoys and other invaders are exposed. Charge no more than two dollars a month to begin.
4. Charge syndication fees. Sell the best stories, videos, and photos to digg.com and other aggregators.
5. Charge a digital rights management (DRM) fee. Charge nonmembers who have been sent a copyrighted piece of music, video, or photo from a member a DRM fee to receive the video, perhaps $2.40 a video, and offer them a free one-year membership to your community.
6. Use users groups. Form a users group to encourage members to fill a “suggestion box” with ideas on how to improve the community. Ask the members who want to join the users group to pay a membership fee. Let’s say it’s $1.67 per month. Eventually hold a convention for users to meet and implement new revenue sources.
7. Revenue share. Follow the lead of potential sites such as Mocketeering.com, a viable but currently non-existent site that would bring together funny people and designers to cooperatively work on reconstructing the packaging and the ads of consumer product and service companies. The community can be constructed in such a manner that when the package or the ad is finished, the designers can offer it for sale, through the community, to the large corporation and quote a price for it. If purchased, the designers would keep say 70 percent of the sale price and the community 30 percent—that’s revenue sharing.
8. Form strategic alliances. Raise up-front money from old corporations that wish to sit on the windowsill of your company to learn how you might design and operate an online community for them.
9. Manage facilities. Once your community is up and running successfully, offer to launch and manage online communities for your old corporation sponsors under facilities management contracts.
10. Get wireless carrier revenues. Port your content to mobile phones and share the monthly charges with the carriers 50-50 or better.
—Excerpted from “Smart Start-Ups: How Entrepreneurs and Corporations Can Profit by Starting Online Communities” (Wiley, 2007, $24.95) by David Silver. Silver is the founder of the angel capital firm Santa Fe Capital Group and the author of thirty books on entrepreneurship and finance. For the past three decades, he has been funding high-tech start-up companies.