Roundtable Recap: May 26 – Twitter, LinkedIn – Why Not Affiliates?

During today’s roundtable, I opened with a question that was going to be a key topic of discussion at the end of the show: Why do large sites like Twitter, LinkedIn, Facebook, etc. make so little use of the Affiliate business model for monetization purposes?

This is a question I would like to address to you guys as well. Please use the comments below to give your thoughts and analyses on why you think Twitter is not using the affiliate business model to monetize its immense traffic. The same question applies to many large sites that prefer CPM-based display ads to affiliate deals, and my hypothesis is if they used affiliate-based monetization more aggressively, they would be making a LOT more money.

For related material, please read my recent post Making Money With Blogs. It would give you some concrete details to tackle this somewhat hairy strategy question that I believe the CEOs of Twitter, LinkedIn, TechCrunch and others need to consider.

Got Produce?
As for the presenters, first up, Deborah Walliser from Redding, California, presented Got Produce? This is a greenhouse technology to grow fresh agricultural produce. Deborah has interest from Whole Foods and some other grocery stores to build such greenhouses near their distribution centers. She, however, has framed the business model as a franchise, whereas in my opinion, this is a technology licensing and services business. I have advised her to course-correct and validate with the potential customers how much they are willing to pay and in what framework.

Priyanka Bhatnagar Jewellery & Accessories
Next, Priyanka Bhatnagar from Pune, India, pitched Priyanka Bhatnagar Jewellery & Accessories, an e-commerce jewelry line. Priyanka needs to learn a lot about how to position an e-commerce business in a hyper-crowded jewelry market. The only way I can really help her is by putting her through 1M/1M premium, because it is impossible for me to give her a crash course on e-commerce in three minutes.

Snowboard Wax Mobile Apps
Then Adam Lee from Incline, Nevada, presented a mobile app for snowboarders who want to wax their own snowboards. The market sizing of the business is full of assumptions that made me very uncomfortable, the chief of those being that over 40% of free members would convert to premium. Freemium conversion rates are usually 4% at the very best, more like 1% to 2% average. I advised Adam to also build this as a B-to-B business selling apps to snowboard wax makers and even board vendors. Of course, this needs to be validated.

Finally, we had a discussion on Adam’s proposal to sell 20% of his equity for $50K, which I thought was preposterous. That’s like selling your prized assets for nothing in a flea market. No way! Adam needs a crash course on financing and should go digest the 1M/1M curriculum module on that topic ASAP.

You can select the business you like best of those discussed today through a poll on the 1M/1M Facebook page.

The recording of today’s roundtable can be found here. Recordings of previous roundtables are all available here. You can register for upcoming roundtables here. And you can sign up for the 1M/1M premium program here.

Also, folks, remember, the Microsoft India Startup Grant application deadline is May 31. Don’t miss it!

 

This segment is a part in the series : Roundtable Recap
. March 25 – A Mixed Bag Of Advice . April 1 – Bootstrapping Tips . April 8 – A Focus On E-Commerce . April 15 – Small Is OK; The Goal Is Profitability . April 22 – The Original Runners . April 29 – Finding The Right Direction . May 6 – Defining Value Proposition . May 20 – Validation, Validation, Validation . May 27 – Is The Venture Worth Your Time? . June 3 – Defining Market Segments . June 10 – Efficient Targeting . June 17 – Online Education Startups . June 24 – Three Startups That Can Hit One Million Dollars . July 1 - Get Your Pricing Model Validated . July 8 - The EJ Methodology . July 15 - A Market Of Late Adopters . July 22 - Bootstrap Using Services . July 29 - Startups In Malaysia . August 5 - Paying Customers =>Validation =>Valuation . August 19 - Niche E-Commerce Is Great For Bootstrapping . August 26 - 85%-90% Of Search Traffic Comes From Organic Search . September 2 - Find High Velocity Channels . September 9 - Open Opportunities In Cloud Computing And Rural BPO . September 16 – 5 Cloud Computing Opportunities for Entrepreneurs . September 23 - Do Not Spray And Pray . September 30 - Investors Don't Fund Broad Ideas . October 7 - Try To Get At Least $2M Pre-Money In Seed Round Valuation . October 14 - Professional Investors Do Not Invest In $20 Million Markets . October 21 - Bootstrapping Comes In Many Flavors . October 28 – Convert Potential Competitors To Partners . November 4 - Premium Lounge Sneak Preview . November 11 - African Tech Entrepreneurs Emerging . November 18 - Not Coming To The Rescue Of Victory . December 2 - Niche Marketplace Businesses Can Be Interesting . December 9 - Where Should You Raise Money? . December 16 - Top 10 Tech Trends To Watch . January 6 - Top 10 Vertical and Social Web Trends For The Decade . January 13 - Top 10 Online Advertising Trends For The Decade . January 20 - Personalization Remains An Open Problem . January 27 - Non-Dilutive Financing Through Revenue Sharing . February 3 - Indian Entrepreneurs Are Maturing . February 10 - When Keywords Are Competitive . February 17 - Indian Company Plugs Gap In Google’s Enterprise Solution . February 24 - VCs, Angels, Incubators, Accelerators – What Are You Doing With Your Rejects? . March 3 - Spotlight On The Northwest . March 10 - Spotlight On India . March 17 - Spotlight On Latin And Central America . March 24 - 75th Session Spotlights The Midwest . March 31 - Microsoft’s $100,000 India Startup Challenge Grant . April 6 - 1M/1M Announces Important Partnership With MAD Incubator, Malaysia . April 9 - 1M/1M Announces Partnership With TiE Chennai . April 16 - 1M/1M Partners With Indian Angel Network Incubator . April 17 - High-Octane Energy In Pune . April 21- Incubators Are Reaching Out To 1M/1M . April 28 - Guerrilla P.R. & SEO Most Profitable Customer Acquisition Strategies . May 5 - Ownership Matters . May 12 - Two Really Cool Companies . May 19, Making Money From Blogs . May 26 - Twitter, LinkedIn - Why Not Affiliates? . June 2 - 1M/1M And Incubators - What We Have Learned . June 9 - Silicon Valley . June 16 - Exciting Companies Lined Up For Microsoft Startup Grant Finals . June 23 - New Assessment Tool For Entrepreneurs . June 30 - Continued International Participation . July 21 - Crowd Sourced Funding Exchanges - An Emerging Trend . July 28 - Investors And Incubators Need To Look At Pre-Incubation . August 4 - How Do You Bootstrap Freemium Ventures? . August 11 - Menlo Park And The Silicon Valley Renaissance . August 25 - How To Use Twitter For Lead Generation . September 1 - Fall Call To Action . September 8 - A View Into Israeli Start-ups . September 15 - Do Your Homework First . September 22 - How Do You Catalyze A Region’s Entrepreneurship? . September 29 - From Poland To Argentina . October 6 - Dedicated To Steve Jobs, Reinforcing Mission To Restructure Capitalism . October 13 - FREE Is Not A Business Model . October 20 - Non-profits And For-profits . October 27 - Check Out Stanzr . November 3 - VCs Are Not Always Right . November 17 - Business Schools And Early Stage Entrepreneurship . December 1 - 1M/1M Premium Company Freshdesk Wins Funding From Accel Partners . December 8 - Three Open Opportunities For 2012 . December 15 - Web 3.0 And Social Dancing; Romania Emerging . December 22 - Free Apps, Ad-Supported Business Models => Dangerous! . January 5 - ERP Galore . January 12-13 - Spotlight On IIT Kharagpur, India . January 19 - Are Media Sites Fundable? . January 26th - Spotlight On Jacksonville, Florida . February 2 - YCombinator vs. 1M/1M . February 9 - Are You Fundable? . February 16 - What’s Happening In Turkey? . February 23 - Microsoft Israel To Offer 1M/1M Scholarships . March 1 - Strategy Gaps Need To Be Plugged . March 12 - Winners Of Microsoft Israel Scholarships . March 15 - Spotlight On 3 Day Startup Tel-Aviv . April 3 - Rendezvous In Bangalore . April 12 - More From Indian Entrepreneurs . April 19 - Tyranny Of The TAM . April 26 - A Rare Women-Only Session . May 3 - Some Wonderful Opportunities With Corporate Partners . May 10 - BlueSnap-Elance Contest Applications Deadline This Weekend . May 22 - Winners Of TechHub-A&N Media Battle Of The Startups Contest In London Win 1M/1M Scholarships