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Business Models Are Now Commoditized

In the modern internet landscape, business models have become widely available, making the question of "how will they make money?" less interesting. Companies now have a plethora of readily accessible solutions for monetization, rendering the traditional approach of building unique models redundant.

• There's a multitude of ad networks to choose from, offering various ways to generate revenue.
• Payment providers like Paypal, Amazon, Stripe, and mobile payment solutions like Boku provide convenient payment options.
• Offer walls like Trialpay, and platforms like Kickstarter, are also available for diversifying revenue streams.

The Rise of Facebook: A Case Study in Growth

The example of Facebook illustrates the significance of growth over complex monetization strategies. While initial skepticism surrounded Facebook's revenue model due to its low advertising revenue per pageview, the platform's massive user base ultimately propelled it to a multi-billion dollar business.

• Facebook's success hinges on its enormous user base, reaching a staggering 1 trillion pageviews per month.
• While its revenue per pageview remained low, the sheer volume of users generated substantial income.

Scale: The New Imperative for Success

In the current internet environment, reaching a significant scale of active users has become the primary driver of success. It's no longer about innovative business models or complex monetization strategies, but rather about building a product that resonates with millions of users.

• Achieving a user base of 100 million or more active users is now a realistic goal for many startups.
• Companies like Zynga, Twitter, Groupon, LinkedIn, and Dropbox have already achieved this milestone.

The Importance of Product/Market Fit

To achieve significant scale, startups must prioritize product/market fit. This involves building a product that meets a real need in the market and resonates with its target audience.

• Companies must understand their market, identify their ideal customer, and build a product that solves their specific problem.
• Once product/market fit is achieved, scaling the product becomes a more achievable goal.

Facebook's Growth: A Paradigm Shift in the Internet Economy

Facebook's trajectory serves as a prime example of the paradigm shift in the internet economy. Its success is a testament to the power of scale, illustrating how even with a seemingly simple business model, growth can generate immense value.

• The internet has witnessed a dramatic expansion of users, creating a vast market for startups to tap into.
• The availability of plug-and-play monetization solutions allows startups to focus on building great products and reaching a large audience.
• The key to success lies in building a product that resonates with a wide user base and achieving significant scale.

The New Question for Startups: Active Users

Instead of obsessing over complex business models, the new question for startups is: Could this product engage and retain 100s of millions of active users? The answer to this question will determine the company's long-term viability and success.

• Companies should focus on building a product that attracts and retains users over the long term.
• Reaching a large scale of active users will naturally lead to monetization opportunities, making the business model a secondary concern.

The Importance of Market Size and Growth Potential

Startups should focus on entering large markets with significant growth potential. This allows for maximum scalability and the opportunity to reach a large audience.

• Evaluate companies based on their market size, growth potential, and ability to achieve significant user growth.
• Don't be deterred by seemingly simple business models or traditional monetization strategies.

Conclusion: Embrace Scale and Focus on Product Excellence

In conclusion, the modern internet economy favors companies that achieve significant scale and have a strong product/market fit. Focus on building products that resonate with a large audience and achieve massive user growth, and the monetization strategies will follow. Remember, scale is the new king in the digital world.