Today I saw this company where its online business model was mainly to have people try out free offers from various vendors while doing surveys. Of course, the business gets like say $2 to $10 for every survey or offer that people try as a direct result of their referral. Their incentive to get people to do so is to reward them with these points of sort that can be used as a currency for their in-house products. Example, doing one survey can net them 100 points which can be used to play a game or 1000 to buy a cheap item.

It seems like it is doing well for them too. Compare that in contrast where if you went with the more traditional route where you say charged people $5 for like 1000 points or something like that and you probably won’t get as large of a response unless your product is truly in demand. There is a drawback to this though as many of these affiliate companies don’t allow you to offer incentives in order to get people to try the products.

For example, if one vendor offered me $5 to refer someone to try its product I can’t say that I will offer you $1 to do so. There are many that don’t mind though as long as it is qualified leads. Different ways of creating a business.

I was reading an interesting debate today on how apparently a lot of businesses that use a free to use model while charging for premium services can usually make more money than ones that charge the fee upfront. Example, imagine using a community site where it is free to interact with others but costs money to say spruce up your profile. This is compared to say a community site that simply charges you one monthly fee upfront to use everything.

I guess the simple explanation is that there are more odds that the free method will allow you to potentially create a bigger pool of people who could potentially spend money. Example, one place with 150,000 people that spend only $5/month versus a site with say 50,000 that spend $10/month. I’m always surprised at the things people pay money for.

Example, in some sites you can send people “virtual gifts” that cost one real dollar. Sure enough, millions of people do it all the time. Sure makes you think if you are trying to create a business that revolves around social interaction and entertainment.

I was watching an interview today where a person was talking about his views on how he feels that a lot of entrepreneurs expect to run their business highly on the notion that they can get third party funding and support by continually doing what they think others want. Example, imagine running an organization where there is a government grant for people who promote an art in a specific way and so you constantly revolve your work/operation to cater to that.

Or, imagine you writing a book where instead of simply writing what you feel like you try to create it in such a way where you are basing your work on what you think people want to generate a sale. With that in mind, the person was expressing that you have to be independent when it comes to situations like these where you shouldn’t be expecting to get anything but rather focus in creating what you think is the ideal product/service. Afterwards, that in turn will attract say sponsors and sales with the ideal demographic/audience.

It’s true in many ways I thought as you really have to trust and believe that your work can sell itself. At the same time, you will probably he happier in the long run being able to create things the way you want to.