Freestarters : - A Study On Online Businesses Starting Up With No Revenue During a Limited Period of Time

Abstract: This study finds that online businesses may benefit from non-monetary value generated when starting up by not incurring any revenue for a limited period of time. The conclusion is supported by a combined set of previous research and qualitative data from initiated sources, and demonstrated by Swedish online video-editing company JayCut. The investigated variables are categorized into Company, Product, and User. By using recent year’s vast technological advances regarding ”Processing, Bandwidth and Storage”, companies may copy and distribute their digital products and services online at virtually no marginal cost. By ”Being Free”, thereby not charging users any fees for these offerings and instead put focus on user experience, users may deliver other forms of value. The findings in this study indicate that more sustainable differentiation may be achieved through “Three Factors of Value Creation”, namely ”User Contribution”, ”Network Externalities”, and ”Strategic Partnerships”. As this is a qualitative research limited in scale and scope, to draw more general conclusions the area needs further quantitative research that may result in additional findings regarding the initial strategies of online startups.