Monetizing the Elephant: Creative Ways to Generate Revenue
How do you monetize an elephant? This question comes from an activity I used in a digital marketing course I taught in a French business school. On my way to lecture there in September 2015 I saw a New Yorker cartoon by Mick Stevens showed someone sitting beside a city street 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 cartoon 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?
But there are more effective ways to monetize the elephant. When I challenged my students to come up with more ideas, they filled 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 — always remember to watch for possible revenues from by products and “waste” to create a more circular economy.
Usually there are more ways to monetize the same resource, product or service than you would expect. Finding these and choosing the most effective of these is an important part of developing your business model. It is also not something static. You might have several revenue streams at one time and you might also adopt multiple monetization methods over the lifetime of a product.
Shazam, the song recognition app, began in 2002 as a premium phone call service that returned the name of the song by SMS. Later, when the iPhone was invented, Shazam was repackaged as an app and generated revenue initially through referrals to iTunes and in-app 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. This is not something new that has been discovered by internet-based startups. A hundred years ago the Chicago Tunnel Company had multiple streams of revenue, hosting cables in their tunnels, delivering materials to buildings in the downtown Chicago area and removing waste. They also 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. But even the Chicago Tunnel Company left some money on the table. They could have generated additional revenue streams through tourism and renting out the tunnel spaces as movie locations.
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 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 co-working spaces 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.
