Building an effective model of an Internet project
While doing business in the 21st century, it is impossible to neglect Internet projects as a fundamental aspect of successful entrepreneurship. On the other hand, you come across the fact more and more often that a truly luxurious online resource is only a small gear in one huge business mechanism. Convenient usability, attractive content and an amazing visual part - it is quite difficult and very effective, but all of this can’t guarantee 100% success in business. In this case, you have to see the whole picture of your business clearly. To do this, it is necessary to establish the most effective communication channels with users, study competitors and their advantages, be able to keep the right cost-to-income ratio, etc. All this is formed by the well-constructed business model for an online project.
Definition of a business model
A business model is a visual depiction of the relationship between different business entities, which effectively organizes them to maximize profits. Building a business model for an online project lets to estimate costs, as well as the ways of income. Its essence lies in receiving more money from the user (client) than was spent on project development and maintenance. In fact, this is a competent and necessary study to optimize costs, expenses and generate profits.
Building a business model by Osterwalder
Whatever business model is chosen for work, the essence always remains the same. For this reason, the Osterwalder’s sample of modeling, who not only considered its theoretical aspects but also applied the model in entrepreneurial activity, is of the greatest attention.
His strategy has 9 structural blocks (more details on the picture) that describe the functioning of the business, both on the Web and beyond.
Due to the designed layout, it is possible to multiply the efficiency of the Internet resource, interact competently with the development team, visually present the scheme to investors, add creativity to the project, and also observe the system’s integrity. So, let's analyze the system according to the importance of the elements:
Here it is necessary to ask the next questions:
- What is the greatest value of the developed Internet project?
- What value do products/services presented on the site carry?
- What advantage do they have and what key need is met?
This is the key element of the business model. If the resource neither solves the problem of the user nor have the original idea nor pursue the goal of meeting the user’s needs - it does not have the right to exist.
This unit does not really require decoding. Do not just mix horses, people and sea buckthorn. Label only related activities.
- What makes the project work?
- Where does the investment come from?
- Where is the "core"?
- Where did the ideas come from?
Identifying friends in the Internet is a guarantee of long work and stable success. Only really strong partners should be chosen, and for this, you need to research the market activities and competitors.
- Who is the target audience of an online project?
- How can it be divided?
This block refers to external interaction. Designating your target audience is one of the most important points for the work of any business. It is important to structure and select user groups. For example, entrepreneurs, men, aged 25 to 45 years old - this is one segment. Beginner startups, from 18 to 26 years old - this is another segment. It is important to properly distribute the criteria for your project and highlight the different segments.
As for promotion channels, internal and external are distinguished here.
Internal is the ability of the site to interact with users by segments.
External - when it is discussed on other resources: in chat rooms, on forums, thematic portals, etc.
- How to create effective interaction on your website?
- Where should we talk about the project? How to get there?
This is the so-called “feedback”, which makes the conversion for the resource. It is necessary to structure and choose convenient ways to communicate with the user and improve them. Feedback is nothing more than a definition of project profitability. For example, the reviews and feedback section on the site, the ability to make post yourself in ratings on external resources.
External blocks often depend on current trends, changes in the user's behavior, and sometimes even on the economic situation. In order to stay the course and to avoid highlighting outdated channels of interaction with users, it is necessary to attend forums, seminars and regularly study user’s behavior.
Determine the costs. For Internet projects those are:
- Payment for the domain and hosting (once a year)
- Permanent technical support of the resource, bug fixes, problems and so on.
- Regular updates of the contents
- Improving the design and visual part
- Ensuring continuous feedback (for example, organizing a call-center)
Here is an unfilled field for work. Profit depends on the product’s value. The main ways to generate income:
- Paid content (check whether the user is willing to pay)
- Sale of advertising space
- Affiliate program
You can creatively approach the filling of the layout, this improves performance.
Our company CitySites has already launched more than one hundred successful business models, according to which our partners work around the world, ensuring maximum profit and a decent level of development.
Read more: "Onboarding. Focus on the result".