“Online businesses are whole different animals. It pays to be adaptable
In February, a cool Web startup called AllApartments changed its name. While it was at it, the company rehauled its business model. What started out two years ago as a simple online listing of apartment rentals available in the U.S. suddenly was something far more provocative. The new business, called SpringStreet, still sells ads on its site, where it lists some 7 million apartments. But now the startup wants to make money in completely new, weird, and unexpected ways.
These days, the San Francisco-based company throws in quotes and deals on furniture, moving-truck rentals, and loan possibilities–all for free and often at a discount. SpringStreet makes money by collecting transaction and commission fees from about 35 partners, including Visa and Ryder Moving Services (R). Every time a consumer requests a car insurance quote or applies for a loan, SpringStreet gets a fee that starts at $4. ”We want to provide people with free services and save them money,” says Sophia Kabler, SpringStreet’s vice-president for marketing. ”The good part is, we make money off of all that.” And how. SpringStreet expects the new fees to account for nearly 50% of revenues this year.”
– A little blast from the past! This article is from December 1999 and just brims with optimizm and excitement. Of course, by now we all know what happened. It is interesting to see that some of the online businesses survived, most are shell of their former selves. It also illustrates the point that basic business practices and models eventually ruled the day so take heed! Don’t try to reinvent the business model wheel. It is hard enough to succeed in business without throwing an untested business model into the mix. -ed.