C2C Balloon

Freemium model rocks!

Posted by Horacio Poblete @ April 17, 2009 in c2cballoon

5 comments

We’ve been discussing the weaknesses of ad-based revenue models for web applications. Now we would like to share what, in our opinion, is the best way to monetize a web startup. Let’s remember that startups need to produce positive cash flow, which doesn’t simply mean occasional funds or a second round of venture capital.

We believe that if you have a web application that makes users more efficient,  helps them save money or improves their organization, you should seriously consider adopting the Freemium model. It’s great for consumers to have a free starter account (which is generally for a limited time or with limited features) so they can test the application’s features and learn what it’s all about. For the prosumer market segment you can offer Premium, Pro accounts with enhanced features.

Free = Consumer
Premium = Prosumer

In Freemium model some heavy users are willing to pay for the service and subsidize the costs of running the business. The average conversion rate of free to premium offerings is about three percent. However, it is still important to provide a free service so users can become fans of your startup and help spread the word about your great service. You can offer a basic free service and charge for Premium enhanced features. If you do this it will be ok, but we suggest dealing differently with your free accounts. People don’t want to feel that they are getting a free, “second class” service account. Make them feel respected by giving them all the best features, but in a small quantity. They want a taste of the same high quality as paid accounts.

Apart from “Freemium,” there is also a “donation” model which deserves attention. Let’s check, for example, the Remember The Milk “Pro” account. For only $25 you get a one year Pro account. And what does it mean? Basically that you get “a warm fuzzy feeling for supporting RTM”. So they are not really charging for Premium features but asking for a donation to support their great service. I did it and I was glad, as it is a great web application.

Now let’s do some math. Remember The Milk has more than 500,000 members. Let’s apply an average conversion rate of two percent to this amount. They earn at least $250,000 per year in donations, or, more than $20,000 per month. This is not bad at all, and I’m glad for Bob T. Monkey.

Although it’s our favorite model to monetize a web startup, Freemium model is not a magical solution for every web business. It will not work well under certain circumstances, such as if you have a consumer-facing social network.

Please leave your comments and we can discuss where and when to not apply the Freemium model.

Should I charge for my web application?

Posted by Horacio Poblete @ March 19, 2009 in c2cballoon

3 comments

For some time now, I have been hearing about how web applications need to be free, or very close to free at the least.

The interesting fact here is that these “free future” gurus are often owners or founders of social networking sites. And as we discussed on our last post, no one has a clue as to how to go about making cash from a social community; the ad-based revenue model works only for huge and very particular social sites. So why then should we consider that this “free” model is worth it for everyone?

If you have a consumer-facing application, perhaps you don’t really have much of a choice and you have to bet on creative strategies to make money for your business indirectly. But if you have a fancy and useful business-oriented web application, why on earth wouldn’t you charge for it? Why do some pseudo-gurus insist on turning the word “charge” into a dirty one?

Let’s say this very clearly. Startups need to become cash flow positive, and as one friend always tells me, “in an economic crisis cash is king.” There’s nothing to be ashamed if you focus on profitability, especially if you are building your web business in a socially responsible way. Humanizing Technology remember? Let’s be consistent here. We simply cannot expect entrepreneurs to invest in bringing brilliant ideas to life and building sustainable web businesses based on the weak ad-based revenue model.

Even if you have big subsidies and raise huge capital, you should put a price on your idea if you have a niched product. You’ll be amazed - and maybe you shouldn’t – at the number of people who are willing to pay for a good web application.

Do you believe you have a great product? Does it help your clients save money, make them more efficient, or just be more organized? Then don’t hesitate and put a price tag on that web application.

Do you want to make money with a new social networking application?

Posted by Horacio Poblete @ March 12, 2009 in c2cballoon

2 comments

Well, welcome to the club! There isn’t a clear and killer way to monetize social networks yet. Consumer-facing applications are struggling to pay the bills using the traditional advertising model, and even if you read in the news that “Facebook is worth $15 billion,” you may face significant challenges if you want to make money by building your own social networking application.

The interesting thing is that even if nobody has a clue about how to make millions with a social community, they still can sell it. Blame the “bubble” for this irrational behavior.

People may tell you that these sites have zillions of members, high traffic, marketing potential, blah, blah, blah, but ask yourself if you would pay just $10/month to use MySpace or Orkut? Your answer is probably a resounding “No!”

Here, we are talking about big, huge social sites. It just doesn’t seem reasonable to me to believe that small or new social networking applications can really be profitable with an ad-based revenue model. You have more chances of winning the lottery than to have the same luck and success as Facebook.

I’m not saying that social networking is not for businesses, but the big problem is that it’s not clear what it is you can do with a consumer-facing social network when it comes to making cash. There’re some great business-oriented examples like LinkedIn, but they don’t count only on advertising to be profitable.

If you want to do something cool, and you don’t care about its profitability, then go for it! And write to us as we really love to talk with passionate and idealistic people like you. But don’t do it for the money. Coolness shouldn’t be confused with business utility or profitability.

It’s about time we had a reality check. Startups must recognize the need for profitability. I think some investors are going to lose of lot of money if they’re rooted in irrational behavior. And this time, they can’t really blame any economic crisis.

And Darwin was right…

Posted by Horacio Poblete @ February 19, 2009 in c2cballoon

2 comments

A week ago it was Charles Darwin’s birthday. Two hundred years ago he exposed his statement - all species of life have evolved over time - and I kept this in mind the whole week.

I could not avoid comparing “natural selection” with the current situation we are living. We are in a crisis. Not only in an ordinary financial one. We are in a crisis of values.  In a way we’re forced to polarize to our strengths when times get difficult and the crisis provides a  “golden” opportunity to rethink a “couple” of things.

First of all there is no more turning back. Desktop software’s have their days counted. They are not dying, they are just evolving. No matter if you call it web 2.0, web 3.0 or whatever, each day new web applications show their powerful innovation mood and amaze everyone with their features that were unthinkable just some months ago.

But we can also think in another kind of  “evolution”. I’m talking about sustainability. The “green” one but also the human side of it. I’m talking about building web businesses that use technology to promote socially responsible development. Sustainability and great commercial profits can and have to go side by side. That’s what we call Humanizing Technology.

It’s a fact that things changed and new entrepreneurs will have to be more effective, more selective and even more “human” and I honestly believe that the “new Entrepreneur 2.0 will win the “natural selection”.

You still can go at 150 MPH but not in the wrong lane. Evolution is not just a fashionable word, what does it really means to you?

You think it. We make it happen.

Posted by Tatiana Pezoa @ February 6, 2009 in c2cballoon

0 comments

So you got a great idea for a web application. Something simple but effective that would connect people or maybe make them improve collaboration, become more organized and even more productive.

Why not being a web entrepreneur?

C2C Balloon is powered by a highly motivated, creative (not to mention friendly) team of experts, all willing to do whatever it takes to make your idea a huge success. We are not talking just about coding, but effective help with strategy and consultancy. We will bring your web 2.0 application to life, promote it with state-of-the-art videos, presentations, and provide attention-getting content to some of the Internet’s hottest social networking sites.

We like to think we’re different. Not only because we’re passionate about what we do, and have a gifted team to make good on our promises, but we genuinely believe in this new era of business 2.0. Yes, we‘re driven, but also friendly and ethical.

No “magic formulas”, just hard work and a team that will lead you to run a successful business on the Web. When we take on a project it is much more than a job. At C2C Balloon, every day we earn our client’s trust and respect, and we do whatever it takes to make your project a stunning success.

Words into images

Posted by Horacio Poblete @ January 30, 2009 in c2cballoon

0 comments

Two weeks ago we posted about the new era of communication that is starting. You can check it here.

Well, Felipe just played a bit with the concept and illustrated it with a video. Always interesting to put words into images…

Hope you like it. :)

http://www.youtube.com/watch?v=g_RhSCDRt1A&fmt=18

A new era of communication is starting.

Posted by Tatiana Pezoa @ January 12, 2009 in c2cballoon

0 comments

We are real and virtual people. We’ve learned to profit from the best of both worlds and our lives integrate these two Worlds into one.

Whether we like it or not we are and will be connected all the time. In fact, we collaborate, share and have found many ways to be present in several places at the same time.

C2C’s key mission is to revolutionize communication. To connect people to ideas and not just to machines. Our challenge is to use technology to humanize the human/bits relationship.

Humanizing technology and breaking down barriers. These are our guidelines to build cutting edge web 2.0 applications that really make difference in people’s life.

http://www.youtube.com/watch?v=Pon5Bur_zqg&fmt=18

One blog, several purposes.

Posted by Tatiana Pezoa @ January 9, 2009 in c2cballoon

0 comments

We will split this blog into two ones in a short-term. One for our applications (products) and other to keep you guys updated about what’s happening in C2C Balloon’s life.

So please don’t be mad if we post several mixed themes for now in this blog. :o)

C2C Balloon has just arrived!

Posted by Tatiana Pezoa @ January 7, 2009 in c2cballoon

1 comment

Well first of all welcome to our home! :o)

Our house is your house, mi casa es su casa, mein haus ist dein haus, faites comme chez vous, casa mia è casa vostra, mijn huis is jouw huis, minha casa é sua casa, mitt hus er ditt hus, oma talo on teidän talo, tum toua tam sa-buy, az én házam a te házad, mój dom jest twoim domu, můj dům je tvůj dům, мой дом ваш дом, το σπίτι μου είναι το σπίτι σας!

Let me tell you a little about us. We are a technology company whose mission is to provide a bridge to the way business is conceived, built, and promoted in the Web 2.0 World.

Creative people are thinking up ideas that can change people’s lives, and they need the tools and a team behind them to help bring their ideas to fruition, to make their concepts a functioning reality, and to provide them with ongoing support.

C2C Balloon has gathered a team of some of the brightest new minds working with constantly evolving Internet technology and thinking.  Together, we represent from building code, to developing strategy, to lead generation, cost control, traffic monitoring, and promoting an application through our knowledge of the workings of the social web.

We do believe that the forward-thinking entrepreneur will see the potential of these new opportunities, and will look to a company like C2C Balloon with cutting edge expertise and fast response, to be the first in the marketplace.

So this is it. We build and promote fancy web 2.0 applications.

You think it, we do it.

Many things are going on now and we will keep you guys updated on this blog. This is just the beginning. :o)

Recent posts

• Client2Central is live!
  Posted by Horacio Poblete @ May 7, 2009 in Client2Central
• Client2Central Video Presentation
  Posted by Horacio Poblete @ April 29, 2009 in Client2Central
• Freemium model rocks!
  Posted by Horacio Poblete @ April 17, 2009 in c2cballoon
• Follow us on Twitter!
  Posted by Horacio Poblete @ April 15, 2009 in c2cballoon
• Twitter goes Freemium
  Posted by Horacio Poblete @ April 2, 2009 in Web Applications