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. 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.
2. The make it private / anonymous approach
This is more like a feature, but somehow the Snowden controversy seems to have caused a stir in the business world. I expect we will quite many startups succeeding with privacy as an integrated part of their business model. The interesting question is if any for-profit companies will be able to convince people to trust them enough.
Find out more on: Start-ups with unique business models
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. 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.
Nos. 3-6 are ideas presented by: Peter S. Cohan at Entrepreneur.com
7. 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.