July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

A growing crop of Silicon Valley startups are finding ways to make money and make a positive impact.

Change.org is one of the most successful examples. The company generates revenues through its cause-based ad model (last year it brought in about $15 million), and is arming ordinary people to strike out against perceived injustice. “If you show them that their voice matters, you can radically change behavior,” founder and CEO Ben Rattray said in a recent interview.

Change.org CEO Ben Rattray

After months of testing, Change.org is ready to launch a new revenue model that is geared to consumers, not organizations.

If you’re perusing the site and come across a cause that is particularly close to your heart — anything from a plea to Verizon to nix contracts or a campaign against Twitter to ban “thinspiration” hashtags – you can pay to promote the petition.

“This is what our users wanted,” said Jennifer Dulski, Change.org president and COO in an email interview. Dulski said the team is consistently asked how supporters and petition-creators can promote their campaigns to more people.

Organizations already have the ability to sponsor petitions, which is the primary way that Change.org makes its money. It’s not disimilar to how Facebook asks brands to pay to promote posts on the company page.

San Francisco-based Change.org has grown to 35 million registered users around the world, and its petitions often garner thousands of signatures. Generally speaking, the more signatures a petition receives, the more likely it is to catch the attention of the press and/or key decision-makers.

Related: Change.org CEO Rattray will speak at HealthBeat, our San Francisco-based conference on May 20 & 21, on the topic of consumer-driven health care reform.

By targeting consumers, the team expects to pull in steady revenues in smaller dollar amounts. Contributions are capped at $1,000 per user per petition, but beta tests found that 98 percent of contributions were under $100. During the test period, a total of 5800 people contributed to promoted petitions.

Change.org’s ad-based business model has been critiqued in the press. Clay Johnson, author of “The Information Diet” told the Wall Street Journal he has “huge problems” with the site as it is a “lead-generation business disguised as a social-change organization for whoever is willing to pay them for the email addresses.”

But Change.org is proud of its B-corp status; Rattray recently told me that unlike most non-profits, the company can afford to hire the best talent.

Has Change.org crossed the line between change-making and profit-making? Leave feedback in the comment section below. 

Images at Change.org office // Christina Farr

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Subscription revenue is the new old thing, apparently.

Flickr — remember Flickr? — charges $6.95 a month to share your photos to the world, if you want pro functionality. Buffer, the social media sharing and analytics company, charges $10/month for anything beyond the freemium crumbs. And Dropbox goes from $10-50/month, just at the consumer level.

But subscription revenue has been around a lot longer than even the oldest dot-com. Aria Systems, a software-as-a-service billings platform, put together an infographic with all the subscriptions that the average American — you know, the person who lives next door and just got an Android phone — pays every month.

It’s a massive $857/month … mostly because of items that we don’t typically think of as subscription payments, but actually are. Things like insurance, a mobile phone plan, and utilities. Even the biggest one of all: health care.

Over time, startups can only hope that some of this revenue, most of which is dumped into the laps of massive contenders in yesterday’s economy, will come their way.

Here’s the visual data:

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

So you thought that recurring revenue streams are the sole province of funky web 3.0 services companies?

JustFab will send you a to-die-for clutch and blouse for $40 a month, and The Fancy will Fedex just about anything that its members like for $30. And yes, men can get a “sockscription” from smart socks manufacturer BlackSocks.com, or for under $10 the Dollar Rubber Club can even deliver a monthly pack of condoms straight to your door, every 30 days.

But the recurring revenue stream has been around for long before Basecamp and online project management, the Wall Street Journal’s paywall, or even the local newspaper that your daddy paid $5/month for.

But news is where the subscription model seems to have started, with newspapers and periodicals, way back in 1440.

Aria Systems, the cloud-based subscription billing management company, compiled a short history of the recurring revenue model, from Spotify and Netflix to telephone service back in the 1800s, and all the way back to newspapers and periodicals back in the 1400s … four years after Johannes Gutenberg started working on his printing press in Mainz, Germany.

Here’s the infographic:

photo credit: Great Beyond via photopin cc

StartApp, an Israeli startup that promises to bring much-needed revenue to frustrated app developers, today announced it has been downloaded 150 million times.

The highly profitable, fast-growth company is a darling of the Israeli tech scene — this, I noticed, during a trip to Israel this summer where I was introduced to StartApp’s CEO, Gil Dudkiewicz, an entrepreneur-in-residence at local venture capital firm, The Cedar Fund.

Dudkiewicz told me then that the pain-point StartApp is trying to address is simple. Developers struggle to generate revenue from their applications. Even some of the most downloaded apps do not have a strong and sustainable business model, which acts as a deterrent to young developers building the next generation of apps.

As it stands, developers only have two options to make money: They can charge for an application or set up in-app ads.

“The latter option provides an inferior user experience, as most users will only click on the ads by mistake,” the company’s chief executive told VentureBeat.

StartApp offers a platform that allows Android app developers to monetize through downloads, an attractive model for the most popular apps on the marketplace. As VentureBeat reported in March, StartApp will pay developers $50 for every 1,000 downloads.

The company’s critics have been quick to point out the catch. Isn’t there always a catch? Users who download a StartApp-integrated app will notice a curious search icon appear on their home screen. This is how StartApp makes its money. Whenever a user searches the Web via this search portal, StartApp generates revenue, and developers can take a cut.

They will have been notified and have the right to delete it immediately — but will this taint the user experience?

With the sheer volume of downloads and rapidly expanding customer base (StartApp now integrates with 3,500 Android apps), the solution seems to be working for now. To continue to thrive, the company will need to find an alternative to the search box, particularly before expanding to iOs. Apple would not welcome the intrusion on its slick user interface.

StartApp faces strong competition from global mobile ad networks, such as Admob and InMobi. The founders remain optimistic that the pay-per-download model will be the preferred option. “We have introduced a new take on app monetization, one that enables a clean app for a better user experience,” Dudkiewicz told me in an email interview.

StartApp brings us this news a few short months after its first funding round of $4 million, led by the Cedar Fund and Ascent Venture Partners. Since March, adoption rates have skyrocketed; the app was downloaded a further 100 million times.