Business Models
Diagrams | Matrices | Thinkers
How will transformative technologies disrupt traditional business models?
| NAME | DESCRIPTION - IMPLEMENTATION | TECH POTENTIAL |
|---|---|---|
| Affiliate marketing | Commission-based promotion of other companies' products. Amazon Associates pioneered public affiliate programs in 1996, now used by 2.3% of websites with advertising networks | 3/5 |
| Agency-based | Service delivery through specialized expertise teams. iPullRank and WiderFunnel demonstrate how individual contributors can build successful agencies through networking and quality work | 3/5 |
| Aggregator | Consolidating multiple services into a single platform. Grubhub transformed food delivery by aggregating restaurants across 4,000 cities, serving 22.6 million users | 4/5 |
| AI SaaS | AI-powered software solutions with subscription pricing. OpenAI offers API access to large language models with usage-based pricing | 5/5 |
| API licensing | Monetizing access to proprietary software interfaces. Google Maps offers flexible licensing with free tiers for low usage and paid plans for high volume. Twilio licenses communications APIs based on usage | 4/5 |
| Attention merchant | Monetizing user attention through advertising. Instagram and Snapchat allow brands to market themselves through their platforms | 2/5 |
| Auction-Based | Competitive bidding for products/services. FCC uses simultaneous multiple-round auctions (SMRA) for telecommunication frequency slots | 3/5 |
| Bundling | Combining multiple products/services into a single offering. Microsoft Office bundle increased market share from 7% to 38% in one year. Netflix bundles streaming video with wireless and pay-TV plans | 3/5 |
| Business Operations as a Service | Outsourcing operational functions through tech-enabled platforms. ServiceNow provides workflow automation across enterprise operations | 5/5 |
| Co-creator Communities | Collaborative value creation through tokenized participation. Decentraland allows users to create, experience, and monetize content and applications | 5/5 |
| Consulting | Knowledge-based advisory services. McKinsey & Company provides strategic advice to businesses and governments worldwide | 4/5 |
| Crowd Source | Leveraging distributed communities for funding or creation. Kickstarter enables creators to fund projects through community support | 4/5 |
| Data licensing | Monetizing proprietary data access. Bloomberg licenses financial data to institutions and professionals worldwide | 5/5 |
| DeFi Finance | Decentralized financial services without traditional intermediaries. Uniswap enables trustless token swaps with over $1.5 trillion in trading volume | 5/5 |
| DePIN | Decentralized Physical Infrastructure Networks using token incentives. Helium created a decentralized wireless network through community-owned hotspots | 5/5 |
| Distribution based | Controlling product delivery channels. Coca-Cola maintains one of the world's largest beverage distribution networks | 3/5 |
| Drop-shipping | Selling products without holding inventory. Wayfair connects customers with furniture manufacturers without warehousing products | 2/5 |
| Discount with high-quality | Offering premium products at competitive prices. ALDI and Lidl source products in bulk and sell at wholesale rates | 2/5 |
| Dynamic Pricing | Fluid markets based on demand, location, reputation. Uber adjusts prices based on real-time demand and supply conditions | 4/5 |
| Ecommerce | Online retail sales. Amazon revolutionized retail through its online marketplace and logistics network | 3/5 |
| Fractionalization | Dividing ownership of assets into smaller units. Masterworks allows fractional investment in fine art masterpieces | 5/5 |
| Franchise | Licensing business model and brand to independent operators. Subway has over 37,000 locations in more than 100 countries | 3/5 |
| Freemium | Basic services for free, premium features at a cost. Spotify offers free ad-supported streaming with premium paid tiers | 3/5 |
| High Touch | Personalized service with significant human interaction. Four Seasons Hotels provides exceptional personalized customer service | 2/5 |
| Immersive Commerce | AR/VR enhanced shopping experiences. IKEA Place app allows customers to visualize furniture in their homes before purchase | 5/5 |
| Leasing | Renting assets for a specified period. Enterprise Rent-A-Car offers vehicle leasing for various durations | 3/5 |
| Low Touch | Minimal human interaction in service delivery. Robinhood provides investment services with minimal human intervention | 4/5 |
| Membership Subscription | Minimal human interaction in service delivery. Robinhood provides investment services with minimal human intervention | 4/5 |
| Multi-brand | Operating multiple brands under one company. Procter & Gamble manages dozens of consumer brands across various categories | 3/5 |
| Multi-sided platform | Connecting different user groups. Airbnb connects property owners with travelers seeking accommodations | 4/5 |
| On-demand Services | Immediate fulfilment of customer needs. DoorDash provides real-time food delivery services | 4/5 |
| Online educational | Digital learning platforms and content. Coursera partners with universities to offer courses to millions of students | 3/5 |
| Pay as Go (Utility) | Usage-based pricing model. AWS charges customers based on their actual cloud resource consumption | 4/5 |
| Peer-to-peer | Direct exchange between users without intermediaries. Etsy connects artisans directly with buyers | 4/5 |
| Product as a service | Offering products through subscription. Zipcar provides car access through membership rather than ownership | 4/5 |
| Razor and blade | Selling base products cheaply, profiting from consumables. Gillette sells razors inexpensively but makes profit on blade replacements | 2/5 |
| Real Estate + Franchise Service | Strategic property ownership combined with franchise operations. McDonald's purchases prime real estate and leases to franchisees at markup | 3/5 |
| Reverse Auction | Buyers set price, sellers compete. Priceline allows travelers to name their price for travel services | 3/5 |
| Reverse Razor and Blade | Giving away consumables, charging for the platform. HP Instant Ink offers free printers with subscription ink services | 3/5 |
| Small-scale Agency | Focused, affordable service packages for SMBs. Design Pickle offers flat-rate graphic design services | 4/5 |
| Spatial Computing | AR/VR solutions for business applications. Microsoft HoloLens enables mixed reality for industrial applications | 5/5 |
| Standardization | Creating uniform processes and experiences. Starbucks ensures consistent customer experience across all locations | 3/5 |
| SaaS Subscription | Recurring payment for ongoing access. Netflix charges monthly fees for streaming content access | 4/5 |
| Transaction | Facilitating transactions through trusted connections between buyers and sellers | 3/5 |
| Tokenization | Converting rights to real-world assets into digital tokens. RealT tokenizes real estate properties for fractional ownership | 5/5 |
| User-generated content | Platforms where users create the primary value. YouTube relies on creators to produce content that attracts viewers | 4/5 |
| Vertically Integrated | Controlling multiple stages of the supply chain. Apple designs hardware, software, and operates retail stores | 3/5 |
A Business Model sets the foundation for operations, outlining the core elements of how the company operates, including its value proposition, target market, revenue streams, cost structure, and key activities.
- Tech Potential
- Operational Know How
- Threats
- Predictions
- Critical Path
Tech Potential
- 5/5: Transformative potential - technology fundamentally changes or creates new possibilities
- 4/5: High enhancement - technology significantly improves efficiency or capabilities
- 3/5: Moderate enhancement - technology provides notable improvements
- 2/5: Limited enhancement - technology offers some benefits but isn't transformative
- 1/5: Minimal impact - technology has little effect on core business model
Operations
- Compare alternative production processes to optimise outputs.
- Improve quality of outputs at lower cost to benefit unit economics.
- Research the integration of tech by major industry players.
- Leverage AI to improve decision-making.
Threats
- Analyze all relevant technologies that may be at different stages of evolution and how these could impact the company
- Understanding new technologies that can impact your business in advance is essential
- Interview competitors and understand their different strategies
- Investigate and analyze competitors' strategies to understand any competitive advantage
- Get details on new products, productivity insights, and resource utilization of competitors
Predictions
- What roles require human input? What capabilities to they need?
- Understand the history of technology trends in the industry
- Research the technology roadmaps of leading industry players
Critical Path
- What is the hardest problem to solve?
- What is the most valuable problem to solve?
- What is preventing progress?
- What are we missing?
Context
Links
- Basic Startup Infrastructure
- [Business Model Navigator(https://businessmodelnavigator.com/explore)