Billion-dollar club factor #2: Define a monetization model that can capture demand without stifling it.
Our friends at GrubHub will tell you without any qualms that there is no consumer revenue model. This is because GrubHub's revenue comes from the restaurants that are happy to pay for the incremental business that GrubHub brings them. By making it free to the consumer and providing incremental business to restaurants, GrubHub has kept friction to a minimum while speeding up adoption and growth.
OkCupid and SparkNotes founder and current Match.com CEO Sam Yagan explained why there have been so few new players in the dating site world. As with other two-sided networks, dating sites experience the classic chicken-egg problem of needing scale on both sides to create liquidity.
To overcome this challenge, OkCupid began first as a personality testing site, a unique and creative approach to customer acquisition, in order to bring in users and build the supply side of the market. When they introduced dating, it was free of charge—and still is today. The large population of users, plus the free nature of the platform, has kept new competition at bay.