... where visionaries, game changers, and challengers discuss business models
"What is the best business model?" people ask me often. "What are the best business models we can learn from?" Actually, I believe there are many. But we stick to the same examples. Mostly Internet based models. But I believe there are more...
Mostly we look at the same models over and over such as Amazon, Spotify (free drives paid), Apple, Netflix, Hilti etc. But can we find more best business models? Can we find them in different industries?
Question for the Hub
I would really like to know what YOU consider the best business model. Please let me know what you think. I will make an overview and ranking based on your input.
The ‘best business model’ is one which generates value for its stakeholders on a sustained basis. Few months back, I wrote a blog titled ‘Apple Business Model Score: 10 out of 10’, which assessed Apple’s business model on a 10-fold criterion outlined by Silicon Valley VC Bill Gurley in his blog post ‘All Revenue is not create equal – The keys to the 10x Revenue Club’. Check this post at http://jitendermiglani.wordpress.com/2011/08/11/apple-business-mode.... In my opinion, best business models are the ones which score maximum on the criterion outlined there.
On your second question, I believe that Alex did a fantastic job with the introduction of Business Model Patterns in the #bmgen book. Sometime back, somebody asked the following question on Quora: “What is the most interesting business model patterns you know?” Please check my answer over there: http://www.quora.com/What-is-the-most-interesting-business-model-pa.... Though the field of business model patterns is yet to evolve, I believe this will have the answer of what are the best business models we can learn from.
Personally, I am very impressed with ‘Multi-sided Platform’ business model patterns. I have found them applicable in different industries, not just technology industry. For example, VISA is a perfect example of multi-sided platform. It is one of my favorites as well. I have recently started writing a blog titled BMIMatters. Over the blog, I am going to illustrate business models of highly valued companies using the Canvas. I have recently written a blog post explaining Twitter business model. Please check it at http://bmimatters.com/2012/02/18/understanding-twitter-business-mod.... More case studies to come.
Great overview of the 10-fold criteria. Hard to beat or even meet Apple. The patterns are powerful in understanding and innovation of (new) business models. I like the way the patterns are structured around the 9 building blocks. Recently we worked with a Telco in which they now understand they operate in the Multi Sided Platform. They see now new opportunities arise. Great experience. My MSP favorite is Spotify. I think it is a great MSP with double revenue.
You are absolutely right when you say it is hard to beat or even meet Apple. The power of Apple's Business Model Innovation is clearly reflected in the following analysis that I did nearly a month back. Look how Market Cap of Technology majors changed in just 2 years.
31 Dec 2009: Apple - $190 Bn; Google - $197 Bn; Wintel - $384 Bn (Microsoft - $271 Bn; Intel - $113 Bn). Apple behind Google. Apple half of Wintel.
20 Jan 2012: Apple - $392 Bn; Google - $190 Bn; Wintel - $383 Bn (Microsoft - $249 Bn; Intel - $134 Bn). Apple twice Google. Apple more than Wintel.
As you might be aware, Apple delivered blockbuster numbers last quarter. This boosted Market Cap even further. As of yesterday, Apple's Market cap was $477 Billion. Whereas, the second most valued company, Exxon Mobile is much behind Apple with Market cap of $410 Billion.
Is $1 Trillion Market cap possible for Apple? After analyzing its business model, I believe yes.
WOW...I am not an expert at business modeling, but I think Apple does not want to join trends in anything, they want to start their own trend and that is why they built a nasty following with a loyal fan base that worship them like crazy.
As I see it, this is why they can dictate pricing and the market. When all other companies follow what you start, that's when you know you are leading.
Sorry for the interruption, just may 2 cents.
I believe they can make a trillion!
I have written a separate blog post on assessing the attractiveness of a business model from an Investor perspective. I have provided a visual representation of the 10-fold criteria over the Canvas. I am sharing the link below for the benefit of businessmodelhub community.
It has been a while now since I posted the comment above. Now, I have illustrated the VISA Business Model over the Canvas. In case you want to check it out, please visit the following link: http://bmimatters.com/2012/03/19/understanding-visa-business-model/
For an example of the applicability of Muti-sided platform to non-technology companies please refer to my blog
This covers the e-choupal of ITC ltd, India
An interesting area for business model innovation is in retail where traditional 'brick and mortar' retailers are now (it took some time....) responding to the growth of online retailers with innovative cross channel business models. A well known example in the Netherlands is upmarket department store De Bijenkorf that has launched a webshop that allows them to increase the service level in their stores. Tthrough use of the webshop they now have the option to offer customers home delivery of a size or colour clothing item that the physical store does not have in stock anymore. Result: sales growth online and in the stores!
Any more examples of business model innovation in retail?
And who can share some innovative business models for professional services that generally rely on billing their clients for the # hours worked * fee?
Please check out the following video on youtube. It is about Tesco Homeplus Virtual Subway Store in South Korea http://www.youtube.com/watch?v=fGaVFRzTTP4 Very interesting example of cross-channel innovation
A company experimenting with a new model: http://paywhatyouwant.eu/?utm_content=buffer41b9b&utm_source=bu...
one of the most innovative - and successful - business models is performed by ARM. With its business model (R&D licencing as key activity, production by semicondutor c'ies as partners) ARM is world market leader in mobile devices' semiconductors and heavily challenging Intel. Good job, isn't it.
Cheers from Aachen
I don´t think there´s one best BM; BM is evolucionary and depends heavly on the people; isn´t static so you can only speak of a good business model under that period of time, with that external conditions.