Home > data science, internet startup, rant > Explain your revenue model to me so I’ll know how I’m paying for this free service

Explain your revenue model to me so I’ll know how I’m paying for this free service

August 24, 2012

When you find a website that claims to be free for users, we should know to be automatically suspicious. What is sustaining this service? How could you possibly have 35 people working at the underlying company without a revenue source?

We’ve been trained to not think about this, as web surfers, because everything seems, on its face, to be free, until it isn’t, which seems outright objectionable (as I wrote about here). Or is it? Maybe it’s just more honest.

When I go to the newest free online learning site, I’d like to know how they plan to eventually make money. If I’m registering on the site, do I need to worry that they will turn around and sell my data? Is it just advertising? Are they going to keep the good stuff away from me unless I pay?

And it’s not enough to tell me it’s making no revenue yet, that it’s being funded somehow for now without revenue. Because wherever there is funding, there are strings attached.

If the NSF has given a grant for this project, then you can bet the project never involves attacking the NSF for incompetence and politics. If it’s a VC firm, then you’d better believe they are actively figuring out how to make a major return on their investment. So even if they’re not selling your registration and click data now, they have plans for it.

So in other words, I want to know how you’re being funded, who’s giving you the money, and what your revenue model is. Unless you are independently wealthy and want to give back to the community by slaving away on a project, or you’re doing it in your spare time, then I know I’m somehow paying for this.

Just in the spirit of disclosure and transparency, I have no income and I pay a bit for my WordPress site.

  1. August 24, 2012 at 9:57 am | #1

    Many thanks for your disclosure and transparency. Now, if we can only get others to follow suit!

  2. lawrence castiglione
    August 24, 2012 at 10:27 am | #2

    “It’s free!” always seemed to me to be an expression of children, not adults.

  3. Dan L
    August 24, 2012 at 11:24 am | #3

    Well, I’ll have you know that no one is paying me to leave these comments. My pearls of wisdom are absolutely free!

  4. mathematrucker
    August 24, 2012 at 11:34 am | #4

    Can someone please tell me if the credit union finder app is available yet? I checked recently and it didn’t look like it was.

    A few months ago the large commercial bank where my checking account is currently located seduced me into opening up a savings account by offering some “free” cash (something like $50). I know better, but I must have been in a strange mood, so I bit. Signed a few forms (always dangerous), and off I went.

    A couple months later I received a phone call from an aggressive insurance telemarketer who mentioned the bank as the source of my number. I can only wonder where else my info may have ended up.

    I accept full responsibility for signing the bank forms, but the deceptive method the bank used to get me to sign them has motivated me to close my accounts there asap.

  5. Blue cat
    August 24, 2012 at 11:49 am | #5

    Disclosure and transparency are good, but that doesn’t tell me what your revenue model is!

    • Cathy test
      August 24, 2012 at 11:52 am | #6

      I’ll tell you as soon as I have one.

      Cathy

  6. August 24, 2012 at 1:56 pm | #7

    The free online courses are planning to get revenue from placement and a few other sources.

    Need a job? Excel in an on-line course! Your class performance will be sold for the free on-line education model to work. As you say, that’s ok as long as everyone understands the transaction up front.

  7. lace
    August 26, 2012 at 1:00 pm | #8

    Good one! Follow the money…..always follow the money……

  8. One of those bad money making people
    August 28, 2012 at 2:28 pm | #9

    No one is going to tell you their revenue model, and revenue models can change; but if you read all the small print in the user agreement, you can usually figure out at least whether a company is going to sell your data to a third party, or not. Everyone is using your data internally, of course, from your OS to your browser to your geographic location to whether or not you are running adblockers. I for one, welcome our new digital overlords.

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