Revenue model is not a business model but only a part of it ( and sometimes not), and when you talk about implementing your idea, you need a business model, not a revenue model; for the latter will never be elusive if prudent and ethical business practices are employed.
Also read: 12 Steps to starting a business
When one observes successful startup ideas, be it Youtube or Facebook, closely, it can be noted that revenue making, or for that matter, net profits to the venture did not accrue in initial phases. It was only the enabling feature – in case of Youtube, it was hosting videos for free and for Facebook, it was the person-to-person connect – that scripted win for these companies.
While conceptualizing, one has to refrain from weighing his/her idea against only monetary gains expected from it. The basis of any viable business model lies in the ‘need’ for that concept in contemporary society. When everyone wanted to put up their videos and watch other videos for free, Youtube came to the rescue. And when people wanted a webpage of their own, Facebook made its way.
So, was it the lack of or ambiguity in revenue model that was halting you?
Your answer lies in another question. Did you ever ponder on why venture capitalists, angel investors and private equity funds have been relentlessly backing ventures that after years of being founded are still operating at losses?
Yes, it is not the money or revenue that they are making, it is the revolution in market and in consumption patterns that they are bringing which assists them raise funds for operations.
Traditional approach to starting a business has faded with the information technology revolution that is gripping us all. E-commerce has significantly lowered down commissions of middlemen and the resultant is cheaper goods for end consumers, what’s happening in the far east while you are in Europe is accessible within seconds, the flow of information is so quick and so cheap, rather near-free.
Technology start-ups are not like conventional trading businesses where commissions earned determined the viability. They are rather the determinant themselves, they provide solution before making money, and this is what that makes them a lucrative investment area today.
Think of how you are solving a concern, not of how you will make money from your idea. Revenue models are outcomes of your ideas, not the vice-versa. Thus, it will not be wrong to say that your zero revenue model can get funded or acquired as well.
