Can an Online Community Be Profitable?
After hearing about the success of Facebook and other social networking sites, many people believe that they can jump on the bandwagon and cash in quickly.
This is definitely NOT the case!
Many of the social networking sites that generate revenue now ... operated for many years losing money. However, there are a few models that can be used to create a profitable platform.
- The Sponsorship Model - Getting sponsors/investors is the best way to get your network up and running. By approaching people that are interested in the subject matter of your community, you can get them to offer you start up capital. One of the downfalls of this model is that you are dealing with something intangible and your investors must believe in your vision.
- The Membership Model - Charging membership fees can generate funds, but most people believe the Internet should be free and will resist paying to belong to a community. One way around this is to build your client base through tiered access. With tiered access, the basic membership is free and a premium is charged for upgrades or additional features.
- The Advertising Model - Many people try to jump directly to this step and end up failing. Advertisers typically become interested in a community once you have built up a significant audience and they can see the value of marketing to them. Advertisers will want demographic information about your network to ensure your community is a good fit for their product or service.
There are a few common truths about building an online community:
- Make as few restrictions to membership as possible - make access to your community free and easy
- Remember that it takes time to build up your membership base
- Don’t expect to make back your initial investment quickly
If you travel down the online community path, make sure you are familiar with the potential roadblocks that await you! My advice is to be - persistent, patient and passionate ... and you could find success!