I expect business models to change dramatically as we proceed into the future. New and strange sounding business models are popping up all over the place and I predict that this trend will continue.
Business model can be defined as a design for the successful operation of a business, identifying revenue sources, customer base, products, and details of financing.
We have gone from a premium business model (sell your products at high prices) to freemium (give away a basic version, charge for extra features), cheapium (sell it cheap), and then the totally free, ad supported business model adopted by media companies like Facebook, Twitter, and Your local TV networks.
The whole business model landscape has really changed and it will keep changing. A few examples to help in understanding.
Some companies are experimenting with books for example, they offer you unlimited books to read every month for an access fee. This takes off the burden of having to buy books.
Some schools collect school fees daily or weekly, rather than per term. It is easier to pay in chunks rather than one-off payments. That is a business model innovation.
The concept of losing money to make money makes no sense to people who work in the industrial age, but in these digital times, you could do it and get away with it.
Business model innovations that deliver great value to the customer at perceived cheaper prices, wins. I doubt if premium priced products and services will get a seat in our future, but of course I know premium brands do not aim for the mass market and its ok.
More than ever before, if you can innovate with a new business model for your line of business, you would rule the world. Seriously!
Watching The World
- Microsoft goes freemium with new smartphone strategy.
- Iroko TV now allowing people to download movies for offline viewing.