What is the long-tail business model? How does the long-tail business formula differ from the conventional business wisdom? The long-tail business model is where a business sells a wide range of niche products/services instead of selling large numbers of high-demand products/services. The long tail formula seems to fly in the face of the common advice to focus on one niche product (in other words, to prioritize one thing and do it exceptionally well). Further, expanding your offerings according to the long tail formula could be the key to disrupting the market and winning big. In this article, we’ll take a
Why is it important to define the customer groups your business intends to target? What are the different types of customer groups? It’s important to identify and validate your customer groups before you develop your business model. There are five main types of customer groups: 1) mass market, 2) niche market, 3) subdivided market, 4) diversified market, and 5) multi-sided market. We’ll take a look at how to target each of these groups below.
What is the bait-and-hook business model? How do bait-and-hook businesses make a profit? The bait-and-hook business model is where a business sells the main product (for example, coffee machine or printer) at a low cost in order to generate profit by selling complementary products/refills/top-ups (for example, coffee capsules, printer ink) at a high price. In effect, businesses choose to initially make a loss in the hope of making a future profit from ongoing purchases. In this article, we’ll take a look at the concept behind bait-and-hook business models and how they generate revenue.
What is a free business model? How do companies finance the provision of their product/service for free? A free business model is where one or more customer groups receive value at no cost (e.g. a software company offering a limited suite of features for free). Free users are always financed by another part of the business model or by another customer segment. In this article, we’ll look at the different types of free business models, and how they generate revenue.
What is the open business model? How do companies with open business models create value for their customers? An open business model is where a business creates value through collaboration with external partners. There are two main ways to do that: 1) integrate their internal resources with the partner, or 2) supply their resources for a fee. We’ll break down both of these principles below.
What makes a successful business model? What are the different types of business models? A successful business model is one that creates, and over time, builds upon a competitive advantage. In their book Business Model Generation, authors Osterwalder and Pigneur discuss five different types of business models: 1) unbundled, 2) long tail, 3) multi-sided platform, 4) free, and 5) open. We’ll take a look at the key elements of each of these formulas below.
Do you know how to build a tribe? What does it require to start one and keep it going? A tribe is a group of people with a shared vision and the drive to achieve it. You can build a tribe from scratch, or you can infuse a stagnating group with new vision and energy. To keep your tribe going strong, focus on improvement and communication. Keep reading for more on how to build a tribe.
What is Osterwalder and Pigneur’s Business Model Generation about? What are the nine elements that make up a business model? Business Model Generation by innovation experts Alexander Osterwalder and Yves Pigneur is a contemporary guide to systematic business innovation. The authors provide a template for brainstorming and visualizing the overarching elements that make up a successful, holistic business model. In addition, they provide techniques you can use to generate your own innovative business models, as well as strategies you can incorporate to regularly analyze and optimize your existing business models. Below is a brief overview of the key points.
Do you feel like you’re always on the defense, trying to improve your product to overthrow your competition? How can you stop getting bogged down by what your competitors are doing? Investigating what your competitors are doing can be time-consuming and distracting. According to David Hansson and Jason Fried, the founders of software company 37signals, you will be better off ignoring your competition altogether, especially in the startup phase. In this article, we’ll explore the importance of ignoring startup competition.
What is the multi-sided platform business model? How do companies that run on an MSP business model create value for their customers? A multi-sided platform business model (MSP) is where a platform connects several distinct groups of customers with mutual interests. This business model is not a new development—it has existed for centuries. However, it started gaining prominence only in the last decade or so thanks to the advancement of the internet. Keep reading to learn about the concept of the multi-sided platform business model and its key characteristics.