Does monetisation matter?
An unexpected question which I am still in the process of answering
Last week I had the pleasure of speaking with a successful multi-exit founder, who is in the ideation stages of a new venture. They are looking to bridge a gap in the health and wellbeing space, which has the potential to improve the lives of thousands of people around the globe, myself included.
The conversation, like the majority of entrepreneur convos I get to have, was fascinating. I loved hearing their perspective and ideas for working creatively to support a large group of very underserved and underrepresented individuals, so my thinking quickly moved onto monetisation for this particular project. While it is clear to me that the topic of finances had been thoroughly thought through, I was a little taken aback when the founder mentioned that their priority was to get the product to market rather than to monetise it.
Coming from a world of operations at scale, commercial viability is always top of mind for me, so it is no surprise that I felt a little caught off-guard, although I do have to admit that their outlook posed an interesting question: how important is monetisation and how much does it matter?
I suspect the answer to that question depends on who you ask and crucially on the context in which you ask the question… your own personal circumstances as a founder will also impact your views on this, but let’s assume for a moment that your own personal finances are taken care of, and that your therefore would not be relying on generating income from your new venture… would monetisation matter then?
Then answer from me will always be “yes”, for a few reasons. First and foremost, I’ve always thought about revenue as a means to an end… the end in mind might not be buying a super yacht and living a lavish lifestyle, but it could be something as crucial as being able to add new features, running more intensive tests or growing your team as required. And while we can agree that in the age of bootstrapping money doesn’t buy happiness, it does give you options, the kind of options that could make of break your venture. Yet in my mind, there is an even more important reason to want to monetise your work: market viability intel… and while it is true, that there are many means to gather customer (or prospective customer) views and recommendations and lots of interesting KPIs to focus on, few forms or feedback are as sincere as the kind we offer with our wallets.
Why? Because it is a universal (albeit subjective) way of measuring how much effort your users/buyers/subscribers are willing to put into owning your product or receiving your services (i.e.: how many hours of work do they think is a fair exchange for what you offer)
Lastly I will refer to the unwritten code of freelancing all creatives ascribe to at some point in their careers: the balance between a market economy for the self employed and the delicate relationship between supply and demand, or simply put an unspoken agreement between freelancers to avoid undercutting each other to the extent that the value of the work becomes worthless and therefore it would be impossible for the creators of said work to make a living by practicing their craft. So in the same way that say illustrators would seek to avoid “working for free” not necessarily because they need the money, but because they want the profession to be able to live off their work fairly and they know endless undercutting will ultimately result in eroding their profession, entrepreneurs too ought to think about their systems and market in a similar way. Or that is at least what I think.
Had you ever stopped to think about the value of monetisation? Kind of weird topic for a Monday I know, but I’d be super curious to know your thoughts on this matter!
Is monetising your venture top priority or are you more concerned with product development and the impact you can have on others?
Let me know what you think…
Ori
Super interesting question. I remember one of my mentors reflecting on the same point. His view was if you're doing something worthwhile people will pay for it. And that validation is important. It's a measure of true value in his eyes.