What is a Business model? Which one works and why? How do you know you have the right one?

According to wikipedia.org, “a business model describes the rationale of how an organization creates, delivers, and captures value, in economic, social, cultural or other contexts. The process of business model construction is part of business strategy.”

In theory and practice, the term business model is used for a broad range of informal and formal descriptions to represent core aspects of a business, including purpose, business process, target customers, offerings, strategies, infrastructure, organizational structures, trading practices, and operational processes and policies.

It is difficult to know whether or not a business model would fit with your company unless you try it. Below are some unique business models I gathered that are already proven to succeed in their respective domain:

1. Duolinguo
An online language program, startup Duolinguo teaches you basic vocabulary, grammar and sentence structure through games and motivational hearts. It’s completely free, and makes money by pulling thousands of web translations and merging them to create almost flawless, human-like ones.

Check out: The founder’s TED talk to learn more.

The numbers enumerated above are the unique business model which I find interesting, practical and could easily work. Considering that there are also other choices you could browse the net, hopefully, you’ll find this suggested models to be helpful in pursuing your own strategy. Who knows, this could be a foundation that can help you develop or create your own unique business model.

2. Set up person-to-person exchanges.
Some young professionals living in the city need a car seven days a week to commute and do errands. Find trustworthy people who will pay to drive those cars, and both sides will be better off.

3. Reverse Auction
In a reverse auction, extremely price-sensitive buyers name their price for a service. If the seller accepts the price, the buyers must commit to the seller’s terms.

4. Orchestrate demand aggregation.
Assemble all the sellers and buyers for some stuff in the same virtual location. This will give sellers the deepest pool of buyers and vice versa.

5. Offer a product at the highest price.
Find customers whose survival depends on a product that nobody else can provide. Then charge them half a million dollars a year to use it.

6. Friendsurance – The future of insurance

I find the Friendsurance business model innovative because it brings communities and social trust into the insurance industry. By sharing an insurance pool with friends, people are less likely to cheat with insurance money, thus they can pay less insurance premium. Friendsurance facilitates this by acting as a broker between insurance companies and their users.

Well if you think of it, you can actually formulate your own ideas on what is going to be the next “big thing”. Personally, I would like to see those future cars in the movie, flying and having their hyper-drive. This might sound silly today but we might not know the possibility considering the evolution of today’s technologies.

Moreover, I also found out this interesting thread and selected some of Stefan Von Imhof’s answers on Quora, he said:

There’s nothing I love more than thinking, talking & writing about the future. Here’s a list of some things I’m excited to see develop in the near future & over the longer-term, along with my predictions for when each will start to happen.

Next 2-5 years:

• Augmented Reality I’ll start here because it’s the obvious choice. Google Glass, mobile apps, etc. A ton of chatter, but certainly also a ton of opportunity.

• Wireless Power We still have way too many cords, cables, and electronic devices that need to be physically plugged in or connected. This doesn’t need to be the case, and is a big enough pain in the ass that the market should step in soon. The technology already exists. I don’t know all the ins & outs, but this seems like a big opportunity not many people are talking about.
• Internet of Things: This is an old idea but it’s gained a lot of traction recently, because it’s a good one. Connecting & linking not just computers, phones and tablets, but all of our devices through the cloud. Fridges, remote-locking mechanisms, coffee-makers, etc. Most consumer products can be Internet-enabled for less than $20. The only thing holding it back is the fact that the management infrastructure is not in place yet. We’ll need ways to manage and utilize these networks of smart devices and objects that are in our homes and lives. This is an area that is very fragmented – yet any widely utilized application or platform will need to work across many different devices, platforms and suppliers. Many companies in the cloud storage/data management space are in a good position here.

~5-7 years:

• Graphene No nano-material is thinner or stronger than this stuff. We just need to figure out how to affix it to other materials and an entire new world opens right up.

• Mobile Payments I still can’t believe this hasn’t taken off in the US. With rapid evolution of mobile phones, there is such a big opportunity for replacing money transactions with either an existing, or a new form of electronic currency on a very wide basis. Of course there are lots of examples of both alternative currencies and mobile payment systems today – but they are all still based around credit cards, bank accounts, etc. What we need is a whole new protocol. No one seems to have hit upon a business model that is universal and popular enough to displace physical money. And whatever emerges could replace a lot of conventional advertising as well.

~7-10 years:

• Driverless Cars Plenty has been said about this already. The technology is already here, but it will take time to let the legislation/infrastructure/free market catch up.
• 3D Printing

Thank you for reading. If you wish to send us your ideas kindly comment below.

Making your own business from scratch is difficult. That’s why most entrepreneurs commit mistakes, especially those who are new.

To help you grow as an entrepreneur, I listed below 10 of the most common mistakes every start-up entrepreneur should avoid.

Here are the following:

1. Trying to build a product for everyone.
He, who tries to please everybody, pleases nobody.

2. Lack of focus.
All entrepreneurs are cursed with having too many ideas that are too tempting not to be executed. The point is to be able to put everything else aside and focus on one with best timing and most potential. Jack Dorsey mentioned somewhere that he had his Twitter idea almost a decade before he started it and put it in shelf – which is his way of clearing distractions.

3. Ignoring cash-flow.
As already mentioned in many answers confusing cash-flow or ignoring it is surest way to fail.

4. Quitting too early + not failing soon enough. 
Quitting and failing are 2 different things. Failing soon is about not wasting time (or failing in love) with features once you have enough evidence they aren’t going to make profit – you should seek that evidence all the time. Quitting on another hand is giving up to circumstances while knowing that what you are doing can work and will make you happy.

5. Wasting time on what competition does. 
Someone once famously tweeted: “If you spend all your time looking at your competition your product will end up looking like competitions ass.”

6. Picking the wrong co-founder and not having a shareholder’s agreement in place.
Talking or wishing and doing are to separate things, when you are motivated and excited everyone feels like a winner. All people tend to overestimate themselves, however once it comes to action many back off or find reasons and excuses to go for the easy and safe route. Making sure you aren’t giving equity to a “co-founder” before you get a proof is what shareholder’s agreements are made for.

7. Issuing equity too early.
Many people you hire early on may only a half-hearted commitment and ambitions on their own. Once I was going to offer small part of equity to an advisor and I had a chat about it with one experienced partner in a law firm, he told me: “Why would you need an advisor who does it for equity? Get people who are excited about your product and want to help out because of that excitement and belief in it, then after a year or more you can talk about equity.”
Same thing with stock options, the ideal time frame should be around 5 years, if you give it to someone after 1 year of working they can simply walk away and take a free ride while you’re working your ass off increasing the value of their stake.

8. Too many features – overcomplicating. 
Everybody knows why Apple was so successful. Here’s a quote from Albert Einstein that sums it up nicely: Any darn fool can make something complex it takes a genius to make something simple.
It’s the simplicity not complexity that sells (and makes it hard to build)

9. Not seeking or using customer feedback.
Well they may not tell you what you should build but they can surely tell what’s wrong – as Bill Gates once famously said.

10.  Underestimate the value of connection and networking.