How to Create Multiple Revenue Streams in a Tech Startup
The first and most important step is to identify new areas for monetization. To create multiple streams of revenue, you need multiple ways of making money.
In the tech world, there are countless opportunities for monetization . For example:
- Core products and services. For starters, there are your core products and services. You might sell specific products to individuals, or ongoing subscription services to companies all over the world. This is your “bread and butter,” and the reason for your company’s existence. Most of the time, it’s your biggest source of revenue and the most important stream to keep alive.
- Side products and services. Over time, you might develop new products and services that don’t fit with your mainline but may still be valuable to your company. For example, you might develop a new app that doesn’t fit your main brand but could be valuable to thousands of potential customers.
- If you have lots of people visiting your website or downloading your app, you may be able to monetize that traffic with the help of advertising. You can earn money for each person who clicks on the ads on the side of your app or webpage and make little to no ongoing effort to sustain it. Just be aware that some consumers find ads to be a turnoff, and this could hurt their image of your brand. Advertising.Search volatility from Google could also have an impact on predictable revenue.
- Classes and education. Similarly, you might develop an online course, a series of tutorials, or some other educative pathway.
These are just some of the ways you can build extra revenue streams for your business. Take the time to brainstorm and come up with even more unique ideas.
Step 2: Establish Priorities
Once you have a few ideas for possible alternative revenue streams, you should take the time to establish your priorities as a business. How important are the following?
These priorities should help you determine how many revenue streams to add, how quickly to add them, and how they should fit with your core products and services.
Step 3: Experiment
From there, you’ll be ready to experiment. Not all your additional revenue streams will pan out exactly the way you imagine, so you should be prepared for some surprise hits and surprise failures. Play with a handful of different options, and tinker with the variables. Take consistent measurements, so you , and optimize your approach accordingly. If you run multiple websites, experimentation may include trying understand the ROI for each strategy multiple content management systems or experimenting on the types of content or ads you run to optimize conversions.
Step 4: Consolidate
Over time, you’ll learn which of your revenue streams are the most profitable and least profitable. You’ll discover new ideas that put your initial ideas to shame, and you’ll find that some of your streams begin to eclipse the others. Take in all this information and consolidate your revenue streams. Create a business model that falls in line with your priorities and be prepared for adjustments in the future.
Creating a business with multiple revenue streams can be challenging, especially if you’re having difficulty getting a single revenue stream consistently running. However, it’s often the best long-term move for your business. Take some time early on to consider the possibilities, and explore different strategies that could add value to your brand.
Nate Nead is the CEO & Managing Member of Nead, LLC, a consulting company that provides strategic advisory services across multiple disciplines including finance, marketing and software development. For over a decade Nate had provided strategic guidance on M&A, capital procurement, technology and marketing solutions for some of the most well-known online brands. He and his team advise Fortune 500 and SMB clients alike. The team is based in Seattle, Washington; El Paso, Texas and West Palm Beach, Florida.
How to Create Multiple Revenue Streams in a Tech Startup was originally published on ReadWrite on November 30, 2020 by Nate Nead.
