I posted this on Fred Wilson’s blog about 2 weeks ago before I went to Europe. His topic was discussing free web models.
I made the assumption that users were a cost of input just like factory workers since in web 2.0 sites the users add a large portion of the value (or at least keep the site functional).
Y-axis: value of service (insert your marketing effort here)
X-axis: trade off between ‘rent on privacy’ and ‘$ cost of service’ (i used a percent scale since I didn’t fully figure out a way to have them expressed in the same unit)
The constraint I called the convenience rate, which then allowed for different indifference curves to be drawn tangent to it depending on user preferences.
The multiple business models on the web would fit in between the x-axis scale.
The model is basic and there’s a lot more I can flesh out, but that’s because it’s still in infancy; for a poor reason.
Unfortunately, my proposal was turned down. My professor told me to try another topic he knew more about - like sports betting.
I’ll scan in a picture for the model soon.
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