It’s been said a million times before, a great idea without any plan for monetisation is a great idea for burning money and little else. I always cringe when I see new businesses started with no thought whatsoever towards eventual monetisation – it’s a part of the strategy that need to be baked in from the star (especially so because money is the lifeblood of business).
Interesting to read on their blog then that PickupPal has dropped it’s commission (formerly 7% of the transacted value of the trip). PickupPal puts a really nice “making the world a better place” spin on this, saying;
We have had such tremendous growth and are proud to be the largest Internet ride sharing company in the world. We feel that by removing this commission PickupPal will be able to grow even faster and become one of the world’s leading green-house gas emissions reducers
Well I guess they’re correct in one respect – paying for something IS a bit of a barrier to its widespread adoption (what would Google search use be if users had to pay for it I wonder?). I also know all the theories about building a userbase and then introducing charging at a later stage but this is a theory fraught with problems – it’s very easy to turn off a userbase used to a free service by all of a sudden charging them for the privilege.
Unfortunately the era of Google has changed peoples perceptions about what a service is “worth”. The amount of stuff out there that is accessible for “free” is so great that customers become a little incredulous at the very concept of paying for a service – regardless of the fact that without monetisation there is no long term viability for a business.
So what is the prognosis for PickupPal? Their idea is nice – trying to save the planet by facilitating ride-sharing – they claim that they’ve built a large userbase already so there is some potential for a partnership with or takeover by another organisation that already monetises (TreeHugger maybe?) – but to change tracks so markedly indicates an underlying issue around the business plan.
Watch this space!