This case tests pricing strategy and financial analysis through multiple monetization models. Candidates must balance quantitative profit calculations with qualitative market trend analysis, ultimately recognizing that declining user willingness to pay subscription fees (shown in Exhibit 3) makes the premium account model more defensible than pure monthly fees despite lower absolute profit.
Our client is an online dating startup named Grad-U-Date, which specializes in matching graduate students with other graduate students. Grad-U-Date has finished building their app and are now looking for your assistance in deciding on a monetization strategy.
What is Grad-U-Date’s best method of monetization? How profitable will the company be?