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Business Models

Diagrams | Matrices | Thinkers

How will transformative technologies disrupt traditional business models?

NAMEDESCRIPTION - IMPLEMENTATIONTECH POTENTIAL
Affiliate marketingCommission-based promotion of other companies' products. Amazon Associates pioneered public affiliate programs in 1996, now used by 2.3% of websites with advertising networks3/5
Agency-basedService delivery through specialized expertise teams. iPullRank and WiderFunnel demonstrate how individual contributors can build successful agencies through networking and quality work3/5
AggregatorConsolidating multiple services into a single platform. Grubhub transformed food delivery by aggregating restaurants across 4,000 cities, serving 22.6 million users4/5
AI SaaSAI-powered software solutions with subscription pricing. OpenAI offers API access to large language models with usage-based pricing5/5
API licensingMonetizing 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 usage4/5
Attention merchantMonetizing user attention through advertising. Instagram and Snapchat allow brands to market themselves through their platforms2/5
Auction-BasedCompetitive bidding for products/services. FCC uses simultaneous multiple-round auctions (SMRA) for telecommunication frequency slots3/5
BundlingCombining 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 plans3/5
Business Operations as a ServiceOutsourcing operational functions through tech-enabled platforms. ServiceNow provides workflow automation across enterprise operations5/5
Co-creator CommunitiesCollaborative value creation through tokenized participation. Decentraland allows users to create, experience, and monetize content and applications5/5
ConsultingKnowledge-based advisory services. McKinsey & Company provides strategic advice to businesses and governments worldwide4/5
Crowd SourceLeveraging distributed communities for funding or creation. Kickstarter enables creators to fund projects through community support4/5
Data licensingMonetizing proprietary data access. Bloomberg licenses financial data to institutions and professionals worldwide5/5
DeFi FinanceDecentralized financial services without traditional intermediaries. Uniswap enables trustless token swaps with over $1.5 trillion in trading volume5/5
DePINDecentralized Physical Infrastructure Networks using token incentives. Helium created a decentralized wireless network through community-owned hotspots5/5
Distribution basedControlling product delivery channels. Coca-Cola maintains one of the world's largest beverage distribution networks3/5
Drop-shippingSelling products without holding inventory. Wayfair connects customers with furniture manufacturers without warehousing products2/5
Discount with high-qualityOffering premium products at competitive prices. ALDI and Lidl source products in bulk and sell at wholesale rates2/5
Dynamic PricingFluid markets based on demand, location, reputation. Uber adjusts prices based on real-time demand and supply conditions4/5
EcommerceOnline retail sales. Amazon revolutionized retail through its online marketplace and logistics network3/5
FractionalizationDividing ownership of assets into smaller units. Masterworks allows fractional investment in fine art masterpieces5/5
FranchiseLicensing business model and brand to independent operators. Subway has over 37,000 locations in more than 100 countries3/5
FreemiumBasic services for free, premium features at a cost. Spotify offers free ad-supported streaming with premium paid tiers3/5
High TouchPersonalized service with significant human interaction. Four Seasons Hotels provides exceptional personalized customer service2/5
Immersive CommerceAR/VR enhanced shopping experiences. IKEA Place app allows customers to visualize furniture in their homes before purchase5/5
LeasingRenting assets for a specified period. Enterprise Rent-A-Car offers vehicle leasing for various durations3/5
Low TouchMinimal human interaction in service delivery. Robinhood provides investment services with minimal human intervention4/5
Membership SubscriptionMinimal human interaction in service delivery. Robinhood provides investment services with minimal human intervention4/5
Multi-brandOperating multiple brands under one company. Procter & Gamble manages dozens of consumer brands across various categories3/5
Multi-sided platformConnecting different user groups. Airbnb connects property owners with travelers seeking accommodations4/5
On-demand ServicesImmediate fulfilment of customer needs. DoorDash provides real-time food delivery services4/5
Online educationalDigital learning platforms and content. Coursera partners with universities to offer courses to millions of students3/5
Pay as Go (Utility)Usage-based pricing model. AWS charges customers based on their actual cloud resource consumption4/5
Peer-to-peerDirect exchange between users without intermediaries. Etsy connects artisans directly with buyers4/5
Product as a serviceOffering products through subscription. Zipcar provides car access through membership rather than ownership4/5
Razor and bladeSelling base products cheaply, profiting from consumables. Gillette sells razors inexpensively but makes profit on blade replacements2/5
Real Estate + Franchise ServiceStrategic property ownership combined with franchise operations. McDonald's purchases prime real estate and leases to franchisees at markup3/5
Reverse AuctionBuyers set price, sellers compete. Priceline allows travelers to name their price for travel services3/5
Reverse Razor and BladeGiving away consumables, charging for the platform. HP Instant Ink offers free printers with subscription ink services3/5
Small-scale AgencyFocused, affordable service packages for SMBs. Design Pickle offers flat-rate graphic design services4/5
Spatial ComputingAR/VR solutions for business applications. Microsoft HoloLens enables mixed reality for industrial applications5/5
StandardizationCreating uniform processes and experiences. Starbucks ensures consistent customer experience across all locations3/5
SaaS SubscriptionRecurring payment for ongoing access. Netflix charges monthly fees for streaming content access4/5
TransactionFacilitating transactions through trusted connections between buyers and sellers3/5
TokenizationConverting rights to real-world assets into digital tokens. RealT tokenizes real estate properties for fractional ownership5/5
User-generated contentPlatforms where users create the primary value. YouTube relies on creators to produce content that attracts viewers4/5
Vertically IntegratedControlling multiple stages of the supply chain. Apple designs hardware, software, and operates retail stores3/5

Meta

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