Business Models: Don’t count your Ponzi pigeons until they’re hatched…
Posted on January 2nd, 2008
by Mitch Brisebois
At the last Ottawa BarCamp I gave a presentation on Eyeballs. More specifically, an overview of the various business techniques used by some social net sites to monetize their subscriber base. So far, only the dating sites have generated much profit - and that’s now in decline. (assuming you’re willing to accept dating sites as social net sites!). The mantra for most web2.0 companies still seems to be “Let’s get a billion users, then we’ll figure out how to make money.” This is so wrong. True innovation is getting all the parts right: product and business plan.
The web isn’t the only place you’ll find kooky business plans. Consider Waterloo-Ontario-based Pigeon King International. They buy pigeons from people they sold pigeons to, so that they can sell the pigeons to other people. Confusing? Basically they enlist farmers to become pigeon farmers. The farmers pay PKI $50k-$100k for the privilege. The farmer is then guaranteed that PKI will buy back young pigeons for $8 to $50. Because pigeons are easy to breed, the ROI is quick. The odd thing is that there no actual market for the pigeons. The buy back is only sustainable if more and more farmers sign up.
If the scheme sounds dubious, the Iowa Attorney General thinks so too. Pigeon King insists that their business is not a ponzi scheme. Their response on December 19th to the attorney general was that the future market for pigeon meat (squabs) will boom once avian flu destroys all the world’s chickens. But I’m not seeing any “Squab Fingers” on the pub menu any time soon! That’s just koo koo!
I wonder if there’s a Social Net app for raising virtual pigeons. oh yeah, Facebook.
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