Blog Entry

Mar 18
2014 

Running Monetization

Running Monetization? Let me explain.

My professional life is focused on software monetization; providing software companies with solutions to further monetize on their software offering. In my personal life, my hobby is running. I’m the traditional ISV of running. I started in primary school when I realized that I was born with a Unique Selling Proposition: endurance. While others would collapse on the sidewalk trying to release a side cramp, I just endured and came first.

My “Endurance USP” enabled me to retain my leadership in my running circle until I reached the army where I served as a combat fitness instructor, training both soldiers and the future instructors in the field. I realized that my personal USP needed some external support if I wanted to stay in the lead. But I had mixed feelings about this. I know my body, I know my strengths and weaknesses – running is just running, what is there out there that I could “BUY”? Knowledge is the obvious answer, which I started to consume in mass, teaching myself about nutrition, methods to optimize my personal resources, and speed workouts and intervals. This newly found knowledge helped me keep my lead, but only by a fraction. The running world was catching up with me and if I didn’t look around for real advice on how to stay ahead, I would lose my leadership.

I find that the challenges are similar in the software development world.  If you are a three-decade strong ISV, as I am, you know it all. You have developers in- house, you know who you sell to and how to do it best. But the market around you is constantly evolving.  Software consumption practices are shifting. Consumers want to consume based on their preferred features, preferred usage times or just based on their personal needs. Constantly adapting to the changing needs of your target audience means you move away from your core development excellence. This forces you to allocate valuable resources to catching up with licensing solutions, entitlement and packaging solutions all of which are not your core USP.

If you are a newbie to running (the 30 – 40 year olds who want to prove to themselves that they can defy age) or a SaaS startup, you feel invincible. You have this USP you were born with which appears to consist of amazing ideas that no one thought of before- and the mere existence of this USP is enough to make an audience want to interact with you.  The channels to your markets are at your fingertips. Cloud makes everything a click away and before you know it, you have users in the 10’s of thousands and the world is your oyster.  And that’s when it hits you …now what? That’s where monetization strategy comes in.

Will a giant company buy me for the number of users I have? Until it does, how do I actually pay my team and myself for supporting this wonderful invention? What do I even know about these users who love my solution – do they like all the features I provided or are they just using one? Do I know if I can segment these users to certain groups and offer different users different packages, and how much to charge for these packages? Even if I did figure this out on my own, do I have the internal resources to open the code and start re-writing, QAing, internal approvals, etc.?  It seems endurance can only take you so far, and if you don’t figure out how to monetize on your efforts, you will probably lose a lot more than the leadership position.

So how did I end up monetizing my running? I decided to let others monetize from my efforts and I joined an online community that donates $0.25 for every kilometer I run to the charity of my choice. I’m not in the business of professional running or winning medals, but I want to do what I like, which is simply running, and I prefer to use a third party platform to help me or someone else benefit from it. Software vendors contemplating whether to build a licensing and entitlement management solution or to buy one should think along the same lines. Stick to what you love, to what you are good at, and let a third party work with you to monetize on your offering.

  • Bro

    Go sister!