Outgrowing Advertising: Multimodal Business Models as a Product Strategy | Hacker News Reader

Outgrowing Advertising: Multimodal Business Models as a Product Strategy

a16z.com

55 pointsmtts14 comments

>tip options vary from $.30 to $21

There's your problem. Try sending 30 cents digitally in the US. We have so many vultures in the middle of our transactions that the standard online payment fee is 30 cents + 2.9%! Paypal has a microtransaction fee structure but then you're in the Paypal ecosystem.

I think if we can solve the microtransaction problem in the US we can move away from the ad / surveillance tech.

I think, it's not a problem if the platform is also doubles as your own bank :D

I agree and that's in line with the solution I have in mind. There is a lot of regulation around that in the US though.

Bingo.

Most of the business models in the article seem to be based on micro-transactions (<1 USD) as a working model. The existence of such models derives from the fact that the payment systems in China are more sophisticated/efficient and you can make that 30¢ or even 1 RMB (16¢) transactions to buy a small piece of content. As you point out, that's not possible in the US thanks to the slowness of ACH and the high cost of Credit Card payments.

It's worth remembering that there was a meaningful ecosystem of app purchases (remember the golden age of 99¢ apps in the app store?) but that was supplanted for the most part by free to buy, ongoing monetization via ads.

That could be a use case for Bitcoin's lightning network or other cryptocurrencies with low fees.

So which of these "new" business models exist outside of the eyeball and wallet economies? Tipping models exist in the US and are just as transactional as any other payments.

There are some decent points in this article but I think it really does itself a disservice by trying overhype how new and different these models are when they're really minor variations on the same basic principles. When you generalize US business models to "people use their wallets to pay for your stuff" it's going to be pretty difficult to argue that these other things fall into a new category.

Oh my, just don't say to me that even Americans now got onto that "O2O" hook...

Mr Horowitz kinda missed the point no. 1 here. I think 9 out of 10 examples there were made during the "pets.com" moment that Chinese internet had around 2013-2014, where countless similar companies flopped, and the remaining ones are been failing with daily frequency since then.

For the few remaining ones, the survival is an everyday task, and there is no wonder that they got that flexible, in order to squeeze last dimes from remaining users.

Let’s assume that Mobile users (across the world) are open to making these micro-transactions (I think they likely are). These would qualify as in-app purchases. This makes Apple + Google the gatekeepers to this happening.

If you take QQ from the original article, you can see they have made an effort to move to the US market. Qidian launched webnovels.com this year or last with a modified model disconnected from the author/tip system but with a pay to play model and gamification. It will prove if websites and publishers can find this pattern valuable. They use PayPal and other services for their transactions, but the floor is well above the $0.30 for tips listed in the article. I suspect that has to do with our transaction fees which make anything that small a loss.

Do they really all qualify though?

For example, if you were to load cash to your Paypal account using your Paypal mobile app, does Apple and Google charge 30%?

pretty thin series of observations... they are basically saying something akin to => "In the United States, we've noticed that people primarily use money to purchase things".

To be fair, they place as much emphasis on the realization that "stuff people will pay for" movement a larger volume of money than "stuff people will get without payment".

Why didn't AOL, Yahoo then succeed in the same way in USA?

I'm very curious if we shall see the `minitelization` of the Internet, ( `minitel` service popular in France pre-WWW? )

Up to this point, if you could amass any sort of audience, it was easier and more lucrative to monetize via ads than attempt user subscriptions/micro transactions.

I recall hearing that VCs would advise their consumer apps NOT to monetize at all so in acquisition talks they could position potential instead of actual amount / user.

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