Nailing the Revenue Model: Jott.com

Last week featured a web start up that failed in figuring out how to make money by offering there service. That's both sad and common. So to be positive this week, lets look at a company that seems to have nailed the money part of the start up game.

Months ago I wrote about Jott, a service that provides a platform which enabled users' to dictate message via there cell phones, have those messages transcribed to text and then delivered to them via email and SMS.

I became a beta tester around February. For me, Jott made good on it's promises and provided a valuable service that saved significant time and helped me prevent things from slipping through the cracks. Over a few weeks, I found I was averaging between five and seven Jotts a day, using it for both personal reminders and work 'to do's'. Essentially, using Jott provided much more than just easy and efficient reminders - it gave me piece of mind that I wouldn't miss anything important.

Make Money: Keep your Customers
Around late August to early September, Jott came out of Beta and continued to offer a free version of the platform supported by an ad network, but expanded to offer two additional tiers of service with full capabilities.

I'll admit, when the switch was made I was not a happy camper. As a beta tester, I had been use to the full platform of services including individual emails, the ability to set text and email reminders days out, and access to bolt on modules to link Jott with other applications. In the switch, I was bumped back to the bare bones and felt that I, as an early adopter, should have been "grandfathered in" on the full platform.

To Jott's defense, I did receive multiple emails informing me of the date of the switch and the options that would be available for me to purchase. Knowing my own personal inbox habits (which I would bet is similar to most of you) I do tend to get trigger happy with the delete button when cruising through email sent from services I subscribe too. I'm human, and very busy. While I'm sure folks at Jott were measuring open and click through rates on these emails, an additional push on social networks might have helped to increase awareness. Just my opinion though.

After receiving yet another email from the Jott team regarding the upgrade, I took a chance and emailed Doug Alley, Jott's VP of Business Development with my questions on why they chose the route they did, an some of my opinions on alternative strategies.

Jott Responds
Doug was quick to respond with a very professional email and a detailed explanation, siting some very important things to remember about monotozation:

• Start ups need to keep there lights on so there services cant stay free forever.
  
  
• People are willing to pay a reasonable fee for services that provide them with good value and consistent delivery on the promise.
  
  
• Information Privacy is critical to fostering and keeping adoption high. Monotization from data mining can be a slap in the face to the end users.

I appreciated Doug's fast and professional response. I believe that a companies willingness to address feedback from their customers' speaks volume about their culture and brand. Doug didn't once apologize for the decisions he and his associates made - and that was OK. He stuck to his guns and went to great lengths to support his line thinking.

What Doug did do was respond to a customer who felt neglected and left behind. At a recent transportation marketing conference, I heard Ann Minor site that over 68% of customers leave because they feel like they are not receiving the attention they deserve, where as only 14% leave a provider because they are not satisfied with product or service itself.

The result is that because Doug made an effort to pay attention to my concerns, I upgraded my account and am again a happy customer. And additional features like Outlook plugins, an iPhone app, and Twitter links put the icing on the cake.

Moral of This Story
Monotization is not just about developing a pricing structure that works. To be truly successful in growing your revenue and keeping customers, companies need to engage with there customers, really listen, really communicate, and turn them into raving fans of there business.

Then the money will come.

Here's a great article by Read Write Web that Doug turned me on to. What I think is most interesting is the comments from the readers...

Some Start-up's Die

It's a shame that it had to end this way, but all start-ups are not created equal. Wil Schroter, in his book, discusses the concept of building backwards and looking at how your business and technology will generate profit in the very early planning stages. I agree with that 100 percent - it costs money to keep the lights on and stay fed.

But so may start up's with great ideas miss this boat. Some developers approach ideas under the guise of "We just want to see if we can develop something really cool. It's not about money." Unfortunately, all too often, that attitude results in those same words being inscribed on those same start up's tombstone months later.

Blog Rush's Obituary
My friend and fellow blogger Mike Figliuolo turned me on to Blogrush during a lunch meeting earlier this year. It was a neat concept that would crawl the classify and content of your blog and deliver your feed on other relevant blogs via a sidebar widget. The benefit to individual bloggers was automated exposure to other potentially interested readers, based on a point system rooted in viral spread of the widgets (thus Mike's introduction of Blogrush to me).



Sadly, I received this email message today:

After careful consideration, we have decided to shutdown the BlogRush service. If you have the widget code on your blog you will need to remove it. When BlogRush launched in late-2007 it spread like wildfire all over the Web. Thousands of bloggers were talking about it and the service exploded to become one of the fastest growing free services in the history of the Web.

During the first year of the service it successfully served 3.4 Billion blog post headlines and the BlogRush widget could be found on blogs all over the world; even up until the moment we closed down the service. BlogRush didn't grow without its fair share of problems -- from security issues to abusive users trying to 'game' the system to much lower click-rates than expected.

We also had some problems with trying to fairly control the quality of the network, and in the process made many mistakes in deciding what blogs should stay or go. All of these issues, ultimately, limited the service's full potential. Our team worked very hard to try and build a service that would truly help bloggers of all sizes get free traffic to their blogs. This was our primary focus. Not once did we ever try to monetize the service with ads or anything else.
BlogRush never made a single penny in revenue. We wanted to be able to help our users FIRST and then worry about monetizing the service later. Unfortunately, the service didn't work out like we had hoped. (It happens.)

I want to say "Thank You" to all of the great bloggers that at least gave BlogRush a test to see if it would work for them. We sincerely appreciate you giving the service a try. We have received several offers & inquiries about acquiring BlogRush, but we are choosing not to go that route. While many might think this is crazy, we truly feel it's the 'right' thing to do for our users. Believe it or not, it's not always about the money. In fact, BlogRush will have lost a small fortune when it's all said and done, and it was by choice. There were many things we could have done to monetize the service but we wanted to make sure it was going to benefit our users first.

Last but not least I want to say that I hope the failure of this service doesn't in any way discourage other entrepreneurs from coming up with crazy ideas at 4AM (like I did with this one) and from "going for it" to just try and see if something will work. Without trying there can be no success. And as we all know, ideas are worthless without action. The Web wouldn't be what it is today without entrepreneurs trying all sorts of crazy ideas.

On behalf of the entire BlogRush team, we wish the best of luck to everyone with their own blogs, ideas, and crazy ventures.

Sincerely, John Reese http://twitter.com/johnreese


Moral of the Story
Monetizing is not evil and people will pay for a service that provides them value. If the strategy is thought through and executed correctly, you just might get to keep your doors open for a while...

You can also follow Mike Figliuolo on Twitter

Niche Networks: Long Tail 2.0?

First - a sincere apology to all my readers for the silence in the past month. Some changes in my personal life and really fortunate times for my company have kept me pretty busy and away from delivering new content to ChasingChange. I'll be working to keep updates as regular as possible. Thanks for your patience!

And now for the fun stuff...

How many of you have heard the buzz term "lurker" or "stalker". Social media blogger, Shel Israel, has a very interesting perspective on this topic, offering his concept of "The Amplification Factor". Rather than using the term lurker, Shel calls these users "listeners". I dig that - it's much friendlier. Whatever you choose to call them, these users tend to observe dialog, and rarely make the jump to participate.

But wearing my agency hat, here's my issue with this audience - if my objective as a marketer is to modify the behavior of target audiences, it seems that this lack of engagement from the listeners would result in my messages missing the mark or not resulting in any subsequent action. Right?

But can MySpace, Facebook and LinkedIn - all boasting millions of profiles - really provide metrics on user engagement? As a marketer, will reaching an audience of less engaged users on behemoth networks still get me the maximum return on my SMM budget dollars? Hmmm...

Enter the Niche Networks
In the past six months, I've been paying close attention to this evolving trend developing in the web 2.0 arena. While the market place is still heavily dominated by the giants, there has been an influx of smaller, more targeted networks that are gaining significant traction in terms of engagement. These networks deliver value in terms of specific functionality aligned with a robust social platform.

For the purpose of this article, I'm going to call these smaller, more topic focused social platforms, Niche Networks. Not sure if that's officially what they're being called these days, but then again, maybe no one's officially named them yet either!?! Who knows?

I Digress - The Long Tail and SEO
Chris Anderson's book The Long Tail: Why the Future of Business is Selling Less of More, has become fairly well know among business professionals in recent years.

In SEO world, this theory relates to the level of specificity in search phrases and terms, when consumers are searching web to find information on desired products and services.

The more generalized terms (or "head" terms) tend to draw the highest numbers of visitor traffic. For the purpose of this discussion, an example of a Head search term might be "Honda Civic". Firms like mine find that because of the generality of these search terms, a large percentage of the resulting traffic is not ready to convert into customers or leads, or even fully engage the site by going deeper into the pages.

On the flip side, long tail terms and phrases are much more specific. These may include a Internet user's geographic location, specific brands or even specialty services. An example of a long tail term might be "buy 2005 Honda Civic Columbus OH". These Long Tail terms do draw less traffic overall, but have tendency to result in high conversion rates. Why? It's not rocket science. The more specific the search term, the higher the chances are that a user will find exactly what they are looking for, and then be ready to act - or engage.

Long Tail 2.0?
So, going back to application of this concept to social media - these Niche Networks may never boast millions of users, but then again, that's not what their necessarily about. From what I can see, drilling down the focus of the platform seems to help foster real engagement and relationships within the subset of users who are all invested in the topic. It seems that this has potential to provide new opportunities to deliver relevant content, products and services to these audiences.

Finding Your Niche
I'm going to try something new. Over the next few weeks (and maybe ongoing if enough readers are interested), I'm going to examine some of these niche networks and ask for your feedback and opinions as well.

If anything, you may have the chance to be turned onto a new platform that will be targeted to your niche interests.

Stay tuned - more to come soon...