Rethinking the business model has been a trend for a few years. Everyone has read about the success and spread of over-the-top business models such as Uber and AirBnB. Their very successful business models have already been copied across various fields. Did you know there is an Uber for e.g. dog walking (www.worthee.com). Tinder and Snapchat type of services are also spreading like wildfire. This means you now can “swipe-right” for jobs (Jobr), networking (CoffeeMe) or even dresses (Seamso).
Before we go further, however, let’s define what business model means. In simple terms, and in this context, it summarizes the way the company or individual creates value, how that value is delivered to the customer, and how to eventually get paid enough for the value to continue the business. Tools like business model canvas and lean canvas do a respectable job of capturing the essence of them.
So, in the current start-up boom, where everyone is copy-pasting business models, has anyone been able to come up with something truly fresh and innovative? Let’s investigate three examples of interesting business models from the last few years, which represent new thinking in the way of operating a business.
DuoLingo
DuoLingo is an application for learning a new language. All features are free of charge, very high quality and scientifically proven to be effective in teaching a new language to an individual. The catch is, that once a person is on a high enough level, the program starts to offer translation exercises as training. These exercises consist of text that DuoLingo has been paid to translate. The same text is translated in a crowdsourced model by several users (redundancy) and combined by an artificial intelligence. It is additionally possible for the user to attend a paid English language test, which allows DuoLingo to position itself as a global language skill standard.
- Value for customer:
- Teaching languages effectively for free through gamification
- Provide a platform for assessing and communicating the language skill level of an individual
- Value for the company:
- Sell the crowdsourced, AI-combined, redundant translations made by the advanced students
- Sell inexpensive language skill tests to customers
- Uniqueness
- Novel way of combining gamification, crowdsourcing and AI into a model that can create a lasting benchmark in measuring language skill
23-and-me
23-and-me sell personalized genetic testing for individuals, and provide information about various hereditary and health conditions as well as lineage discovery. In the background, they run analytics on the anonymized genetic data they receive and plan to sell the results forward.
- Value for customer:
- Affordable genetic test with personalized guidance for “life hacking”
- API-link to other “E-health” digital service providers to further utilize the genetic data
- Value for the company:
- Main income from selling genetic tests and providing customized results
- Secondary income planned from selling insights from the collected genetic data pool
- Uniqueness
- Collect a vast data pool of unique information from individuals and getting paid for doing it
Eve-tech
A Finnish entrant, that approaches design and selling of a personal computer in a new way through ecosystems: crowdsourced funding and development model and direct-to-consumer sales channel. Their success is built on achieving and maintaining an active community around their product, with excited fans providing testing, feedback and development ideas. In summary, the business case is that Eve-tech can afford the higher production costs (due to smaller production volumes) by avoiding retail channel, testing, marketing and even some development costs.
- Value for customer:
- Receives a very high quality computer without retail channel mark-up
- Product designed according to user specifications and tested and supported by peers
- Ability to directly influence and be part of the design and development lifecycle and the community
- Value for the company:
- Higher product markup possibility due to direct-to-consumer model
- Savings on testing and development from crowdsourcing
- Recurring sales to active community
- Uniqueness:
- Utilization of ecosystem thinking across the company combined with effective community management, empowering customers to be part of the development
These examples are just the tip of the iceberg. New models keep popping up all the time, as people start realizing the extent of possibilities in the new ways of working. Technology is no longer a limitation to creating new, valuable services. The only limit is our ability to think in new ways.
What wondrous things could we develop together?
