Unit 4 - Business ModelFebruary 20, 2019

Last Unit

Branding

Feedback from surveys

Any changes or adjustments

Company name and positioning statement

Unit 4

Learning Objectives

Develop a revenue model

Pricing strategy

Understanding revenue growth

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Elements of your

Business Model

The money you need to start your business

Starting capital (seed money)

Your plan to make money for your app

Revenue model

Things that you need to pay for to run your business

Operating costs

The money you have left over after paying bills

Profit projection

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Revenue Model

How does the company make money from each customer segment?

What value

Healthy HanksSporty SamInsta IngridPlayful Parker

Food Cart Business

What will you sell?

Who are your customers? How many customers will you have?

How much will they pay?

Pricing Your Product

Meeting a price for a product is one of the most important decisions

your company can make!

Why do so many prices end in 9? $0.99, $9.99 or $99

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Apps Pricing

One-time download price

Minecraft

In-app purchases

PokemonGo

Advertising

Facebook

Donations

Share The Meal

Food Cart Example

One-time download price In-app purchases Advertising Donations

Decide on the price Sell each food for a set price

Give away food, but sell condiments and larger plates at a set price

Give away free plates of food, But sell advertising space on the plates

Give away the food, But have a donation jar

by the condiments

Pricing

Considerations

How much is your app worth to your target customer?

Will they see enough value to pay when they download?

Are there in-app features that users would pay for?

How do competitors charge?

Who are the potential advertisers?

How likely are your users to donate?

Potential

Revenue

Revenue Price Market size How quickly you get customers

Number of potential customers Who would buy your app and how many people like that are there?

= * *

Calculating

Revenue

Revenue Price Market size How quickly you get customers

= * *

$1 App price

200,000 people under 19 in Ottawa

10% will buy this week Won’t all buy at once! You need to market it.

* *=$20,000

Example

Messaging App Growth

Calculating

Revenue

App purchase

App price *number of users

who paid to download

AdvertisingPrice of an ad

*Number of users

who would see it/click

DonationsNumber

of downloads*

Percent who donate

*Size of

donation

In App purchases

Number of downloads

*Percent who

purchase*

How much they purchase

Next Steps

Continue working on your market research and branding

Come up with your pricing and revenue model

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