New Yorker magazine published a cartoon by Mick Stevens showing someone in a city with an elephant. He has a sign saying “See the elephant, $1” and he is on the phone to a friend saying “Business is terrible.” This describes very well the situation of people trying to sell a product that everyone expects to get for free – like news, weather and music. Who is going to pay to see an elephant that they can see already without paying?
There are more effective ways to monetize the elephant. When I challenge students to come up with ideas, they always fill whiteboards with creative alternatives. You could make people pay to touch, feed or sit on the elephant. You could rent it out for parties, weddings or movie productions. And you could perhaps sell the poop to gardeners – remember to watch for possible revenues from by-products and wastes to create a more circular economy.
In many cases people adopt multiple monetization methods. Shazam began in 2002 as a premium phone call service that returned the name of the song by SMS. Later when the iPhone was invented it was repackaged as an app and generated revenue through referrals to iTunes and advertising. But then in 2017 Shazam was acquired by Apple who removed the advertising and added it to Apple Music. Now they have effectively demonetized the app and are exploiting indirectly a byproduct – user Shazam data – to attract artists and record labels. This is sometimes a valid alternative, where your goal isn’t to generate revenue but to complement other products and services.
Exploiting app data is common in the world of digital services like Shazam, but there are many other cases where companies have monetized otherwise untapped resources. A hundred years ago the Chicago Tunnel company found a unique source of revenue selling their cold tunnel air to cool theaters in the summertime. More recently waste heat from the Paris Metro has been used to heat apartments in a building over the Rambuteau station.
As we move from a linear to a circular economy it often becomes easier to find new ways to generate revenue simply because there are more actors in the ecosystem and they are interrelated in more complex ways. Terracycle’s Loop service for home delivery of refillable product containers highlights this trend. Now being trialed in New York and Paris, Loop gives consumers a completely waste-free way to enjoy their usual consumer products. Loop delivers full containers then collects the empties for refilling from bulk stock. This might sound familiar to anyone who has read old stories featuring milkmen, the people who used exactly the same model to deliver milk in refillable containers to your doorstep. Loop is a fascinating example because of the many possible revenue streams, from consumers, consumer brands, retail chains, delivery companies and municipalities. You could spend a whole workshop just discussing how to apply this type of business model.
But how do you find ideas for monetization? There are three methods to start with. First of all, you need to get help from your friends, colleagues and anyone else you can ask. When more people brainstorm ideas together you will end up with many more ideas. Second, you need to be aware of the methods other companies are using, so read about other companies, read business publications and hang out at places like Impact Hub where nearly everyone you meet is an entrepreneur. Finally, be a bit more creative and look for old ideas that you can recycle, like the milkman model. You find these often in contemporary period fiction like Sherlock Holmes stories, Treasure Island and so on.
Sometimes, though, you have to be careful not to be too aggressive in extracting revenues. Some methods do not pass the “do no evil” test and will be rejected by consumers, impacting your reputation. And in some cases the solution is not to monetize end-user delivery at all.
This can happen in cases like Shazam, where it becomes part of a larger whole. You can also make an impact on society with solutions that are not monetized, like Wikipedia, the TEDx franchise, the world-wide-web and many other things. Sometimes we don’t need to monetize our elephant. We can just let it go back to the forest. Maybe we don’t get so rich in the process but we could make the world a better place.
Based on an original workshop premiered at Impact Hub Stockholm on 18 September 2019
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Andrew Hennigan is a lecturer, speaker coach and writer specializing in topics related to influencing skills, innovation and culture.