As I’m getting closer and closer to (FINALLY) getting a beta out, I’ve been thinking a lot lately about what the best business model for Coach Wizard might be.
I’ve been struggling with it in my head a little bit, so I thought I would share some of the basics around what I’m thinking and see what some of you thought (orig. I was going to just solicit some of my investor contacts for this feedback, but I decided it would be a more lively and interesting conversation out in the open).
Before I dig into the models I’m thinking about a little bit, I think it’s important to frame this discussion with the larger goal of Coach Wizard:
At Coach Wizard we want to help every coach achieve the “you made a difference in my life” moment. We believe anyone who coaches can experience this with the proper approach, tools, and support – so that is what we aim to provide to each and every coach.
With that lofty goal in mind, let’s talk about some potential models and what I see as the cons of each (ie. why I’m struggling to commit to one right now).
From the start I’ve thought of Coach Wizard as something that lends itself really well to a subscription model (SaaS). However, there are a few cons that have me hesitant to fully commit to this approach from the start.
Subscription high-level cons:
1. Traction and speed - Especially at the start, it’s going to be very hard to get coaches (or leagues) to pay for a new service. There’s a significant cost around ‘product education’ required to justify the trial and purchase. Each subscription sale will take time and the snowball will build much more slowly (years vs. months). All of this means the company will not be able to afford staff (including my full attention) for quite some time.
2. Focus - The lifeblood of the system will be all about getting subscriptions, and though we’ll only get subscriptions through great execution on our lofty goal, there will be a significant amount of attention that is spent on tuning, tweaking, and improving the subscription model itself (and that comes at the cost of tuning, tweaking, and improving the service and tools for coaches).
3. Complexity - Because money is involved, coaches will need to put more time and thought into 'evaluating’ Coach Wizard. This takes even more 'real coaching time’ away from them…and that’s specifically the opposite of what we are trying to do. You could argue that we still provide the 'net gain’ here, but the fact that it’s the initial experience and investment that gives you the opposite result is not sitting well with me right now.
So I’m on the fence about launching with a purely subscription based model to start. But if not subscription, then what are my other options? Freemium? Advertising? Donations? Building a marketplace?
I like the some of the ideas of each of these options, and I think the potential to implement each over time is possible. Let’s talk about a few of the cons I see with each though as well:
Freemium high-level cons:
1. What parts of the system should require payment? If it’s the things that speak most directly towards our lofty goal then we have all the same cons as the pure subscription model. If it’s not those things, then what’s the motivation or driving force for coaches (or leagues) to 'upgrade’? Finding the right formula for this will take a lot of A/B testing and time (see 'focus’ con above).
2. Success is somewhat based on a numbers game, as only a certain percentage of users will 'upgrade’. Reaching the 'successful’ numbers may be more than I can afford out of pocket, and getting outside investment to help with this growth approach is massively difficult (it’s the classic traction-and-egg times velocity problem).
Advertising high-level cons:
1. It doesn’t serve our lofty goal in any way (if anything it’s more likely to work against it because it’s a distraction to what the coaches are trying to accomplish within our system).
2. It’s a pure numbers game that requires massive scale and constant service traffic/usage. Getting to even the base required scale is def. more than I can afford out of pocket. Forcing constant traffic/usage does not serve the lofty goal, and I would argue actually works against it.
3. Advertising brings a bit of a stigma with it, making it much harder to build a brand coaches will love, trust, and think legitimately about.
Donation high-level cons:
1. Even more of a numbers game than advertising, and likely less sustainable/reliable over the long haul.
2. Changes the lens in which coaches look at the service (could be good or bad I guess).
Marketplace high-level cons:
1. Requires a critical mass of engagement before it can really be turned on. While I love this option for the long haul, starting with it as the primary model has the same 'numbers game’ issues that Freemium, Advertising, and Donations all suffer from.
2. Unsure of the true size of the market. Again this is both a pro and a con, as this really is an untapped market (ie. doesn’t exist today) that speaks directly to our lofty goal. The downside is that, since nothing like it exists today, there is a chance that the demand for it would be low or would take a long time to build to critical mass.
So those are the really quick, high-level 'business models’ I’ve been bouncing around in my head…there are of course a lot more details, pros, and cons that really attach to each, but I thought just putting out this high-level debate might be a good start to the deeper conversation I hope to have with you.
Of them all, I’m most excited about the marketplace opportunity (because it’s the most win-win-win and still in-line with our lofty goal), but fear that because of my resources it’s a slow, long term play that I’m not sure (yet) how to properly build towards and execute against.
I’m least excited about the advertising route, and right now I’m most uncomfortable with the subscription route (because I want to move bigger and faster towards our lofty goal than it will allow).
So – I’m dying to know – what are your thoughts? Opinions? Ideas?
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Kevin has a day job as CTO of Veritonic and is spending nights & weekends hacking on Share Game Tape. You can also check out some of his open source code on GitHub or connect with him on Twitter @falicon or via email at kevin at falicon.com.
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