Coming up with a revenue model for Orbit required some trial and error. At first, we were thinking that our app, which helps people maintain their social connections, could generate revenue from a tiered subscription system. But the target users that we interviewed said they wouldn’t pay for our product: the dominance of advertisement revenue models has made users accustomed to cost-free mobile app experiences.
Indeed, free stuff is the main benefit of advertising revenue models. We could attract lots of users very quickly by making it so accessible cost-wise. Moreover, if Orbit sold advertisement space to other companies, it would be very easy to have a third-party ad network handle who gets the space, how much they pay, and other complex decisions. That would allow us to easily appeal to investors that are already well-acquainted with the advertising model. Also, rather than having to discuss pricing and the privacy of user credit card information, for example, we could focus more on generating as many users as we can. Orbit may suggest local events/activities for our users to attend with their loved ones, and advertisements related to this feature would likely capture the “intent to buy” that makes product search ads so profitable.
On the other hand, Orbit is not as powerful as Facebook (yet). Digital advertisements make very little money per user, especially when compared to advertisements in the physical world. Thus, an early-stage app like ours would need to have massive numbers of users in order to cover our implementation costs. We also want to avoid issues that have faced the internet at large such as spammy, annoying user experiences, polarizing or otherwise inappropriate ads, and click-bait content that values attention over enrichment.
