Potential for investment/buyouts

Any viable business venture/startup needs to have a solid business model, with potential to make money. I need to work on my business model and ways in which the service can make money. I will look at business models and buyouts of other companies to allow me to think creatively about ways the service could profit.

A great example of a company that saw a gap in the market was Club Penguin. An online chatroom site where the user can customise their animated penguin and igloos for a yearly charge betwen USD$5.95 per month and USD$57.95. Their target audience, similar to mine is 6-14 y/o and has an average monthly hit count of 210 million users.

In 2007, Disney purchased Club Penguin for USD$700 million, this shows that there is definitely money to be made in the market of websites for children.

Disney also bought film studios Lucasfilm from George Lucas for USD$4.05 billion in 2012, Pixar for USD$7.4 billion and Marvel Comics for USD$4.2 billion.

Duolingo business model is impressive, it allows the company to make money without effecting its’ users in a negative way. It’s an online language learnig tool that is free to use. It sells translation services to content providers so that it’s users can get practise while paying Duolingos’ bills. With 120 million users, Duolingo is now worth 2.5x times more than Rosetta Stone, a paid language learning tool. This unique business model obviously works, I need to work out a way to match this style of business models.

A very popular business model with games and apps is the virtual goods business model. This model started to become successful in 2007 with the invention of the iPhone and allowing users to purchase items within the game as an ‘in-app purchase’. While this business model works really well for some organisations, raising millions monthly in profit, it won’t work for my project. The reason for this is that for the method to be succesful, it has to offer quicker or exclusive access to special customisation, community features and competitions. My sites’ sole purpose is to encourage learning about other culture and languages, I feel by allowing users access to ways to skip the learning to proceed their progress through the site would be counteractive to the point of the service.

This said, I have noted two areas in which my site can profit. Both of these methods are chargin teachers, not the users, and I am not totally certain how well they will work. Firstly, within the service of student exchange programs, the service could offer teachers access to set up exchanges in a safe and easy manner using our service.

Another great way to gain money would be to create lesson plans for teachers to purchase and use with their students, the could include all the information, resources and tools to teach the subject while offering additional extras. These can be sold in packs/bundles or can be sold independantly.

Though these ideas aren’t failproof, but instead they look for a way to make money by offering an additional service rather than charging for one of the ones that should exist without charge!

 

Venture Capitalists?

References:

Disney buys Club Penguin in $700 million deal — virtual worlds have arrived?

http://www.bbc.co.uk/news/business-20146942

http://www.investopedia.com/financial-edge/0512/3-ways-companies-profit-from-virtual-goods.aspx

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