... 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.
I have attempted to provide a visualization of Google Business Model using the Canvas. Please click the following link to see it:
It's great to see how rapidly you've provided this inspiring model in a post. Thanks for that!
How did you manage to do this so quickly if I may ask?
Here is the secret sauce for quickly drawing the business model of a company over the Canvas.
Firstly, Canvas is a great tool because it helps you ask the right questions related to a business model and provides you the space to capture the answers to those questions. So, Thanks to Alex Osterwalder for developing it.
Once you know what questions to ask, finding answers is not very tough. For public companies, the place to start is the SEC filings (10-Ks, 10-Qs) for the firms listed in US stock exchanges and the annual reports of the companies. Investor presentations also provide useful inputs. Then, one should use appropriate Google queries and search over websites such as Slideshare, Scribd, Quora, and Wikipedia.
I used this process for “tracing” the business model of Google over the Canvas. However, this process could not be applied to Pinterest because it is a startup. Hence, I was not so quick in drawing the Pinterest business model.
Having said all this, I believe there are 3 levels at which business model analysis can be done:
1. Basic. Here we try to “trace” the business model of a company, as I did for Google.
2. Intermediate. Here we analyze their numbers and try to assess the attractiveness of a business model from the investment perspective
3. Advanced. Here we try to differentiate or innovate a business model. For differentiation aspects, we need to study competition business models as well. For innovation aspects, we need to have a good knowledge of business model patterns and different Innovation tools and Design thinking techniques.
And one more thing. In order to do such kinds of business model analysis, one needs to have both time and interest in doing them. I had both. So, I was able to quickly do the basic analysis of the Google business model.
Thanks! I'll give it a try sometime. I'm also running a self employed start-up. So it's really interesting to experiment, creating a business model I'd like to see now, in a few years and in the further future. :)
I think an interesting blog post on your blog would be to actually document the tracing process for one of the models you created within the canvas. Meaning, show the end product (the business model canvas) and then document the files you looked at, the sections in the files, and what corresponded to each entry in the business model canvas.
That would be a fun read.
I have posted in My Blog the BM canvas for e-Choupal of ITC Ltd.
Appreciate your rating this canvas and your comments
This always raises with me the question what do we define as best? Based on the most profitable company? (But has this been caused by the business model?) Business models that go beyond the monetary benefits? (But is the triple bottomline already widely accepted?)The most innovative business model? (But will this also result in success?)
I agree. The biggest and the brightest is always presented to us like the success company or the success man; But like everything in life, not everything that shines is gold.
Cleary to define the top we need to have a multi criterion matrix; Even if you insist to define profit has the only drive, you have to agree that this model has proven his bugs in today’s history i.e. you can raise todays profits at the expenditure of the company survival at the long run.
I have to say, I really like the Southwest business model. It is built on strictly adhered to core values and the belief that happy and highly motivated employees results in better customer service and higher returns for the company.
The combination of Leadership, Culture and Dynamic strategy are what set the best performing companies apart from the rest.
A bit late to the discussion, but I do feel that it is worth the effort to check age-old (and I mean truly age-old!) business models against a background of the canvas and modern commentators, be that Bill Gurley, Clayton C or leading force AO.
What about the business model of accident insurance, as established in Genoa in the 14th century, when cargo/vessel financing and insurance were unbundled. Highly sophisticated value proposition for very diverse customer segments, channels and relationships narrowly defined, predictable and convenient revenue mechanics, sustainable incremental margins, network effects galore and generally supportive and dependant partnerships.
And 650 years later still going strong, I should have added...
As for modern models, Amazon's set is top for me:
The internet leads to an explosion of new business models as it is history's first invention that combines within itself a mode of communication, a mode of transportation and a mode of production. Very very few internet enabled businesses make an integrated use of all three distinct characteristics and the truly revolutionary combination aspect. Apple rides the waves (and is in this early stage the cash generator) better than anyone else, but has yet to get to the combi-core. Amazon is much deeper into it, although it lacks Apple's clever and valuable linkage of the "electronic" and the "physical" life. I am thinking of Amazon's role in many-to-many commenting, retailing of electronic content, re-employment of data generated by usage and facilitation of cloud computing. Can't help admiring it.
But you weren't looking for yet another endorsement of Amazon of course.