Sketchfab’s business as an animal matrix
I love visual frameworks, helping you easily grasp a concept in a single glance. One of my favorite ones is the animal matrix by Christoph Janz from Point Nine Capital. It describes 5 ways to build a $100M business, by going after 5 different customer segments: flies, mice, rabbits, deers, elephants.
About 3 years ago, we started working on monetizing Sketchfab and building the business. And within a few months, it struck me that our business could essentially be mapped as the entire matrix. We have 4 revenue lines, each with a price point about 10x the one below.
The average cost of a 3D model on the Sketchfab store is ~$17 - this is our flies. Our 3D creators - who pay on average ~$100/year for our pro plans - are our mice. SMBs - who pay on average ~$1,000/year for commercial use and advanced customization - are our rabbits. And our enterprise customers - who pay between ~$10k and ~$100k/year for an unbranded solution, larger volume, bespoke implementations and advanced features - are our deers and elephants. What’s fascinating is that each of those lines bring about the same amount of revenue, each lower tier having about 10x more volume than the tier above.
While this could be seen as a lack of focus, there are a number of reasons for which we went after diversification. First, we had to test a number of monetization ideas in order to make it through the VR winter (more on that in a future post) and sustain the business. Diversification makes our business more resilient, this became quite clear during the pandemic.
Back in 2018, with over 1M users who had published over 2M 3D models, we felt we had reached critical mass of creators and content, and that the timing was right to start monetizing B2B segments as well as the content. We realized a lot of companies had already organically adopted the platform and our creator tools, and were ready to pay a premium for using them for commercial purposes, with custom branding and sophisticated implementations like 3D configurators. And our library of content grew thanks to our publishing tools, paving the way for a SaaS-enabled marketplace.
There is a virtuous circle between our various segments. Having a large community is a great way to proof-test our product — any bug or issue gets reported live, and we get to be tested across many different configurations — which means a more robust platform for companies. The community is also a great driver for our R&D efforts — the best artists are the most demanding when it comes to rendering capabilities. More and more creators who were initially using Sketchfab for personal use and their portfolio are now pitching Sketchfab to their companies, especially now that we’ve released Sketchfab for teams. Some companies discover Sketchfab through great 3D art embedded all across the web. And others discover our publishing solutions after buying from the store.