85 Business Models That Prove We’re All Just Remixing Capitalism

Let’s get the definitions out the way quickly so we can get to the actual list. The term “Business model” describes the framework that describes how an organization creates, delivers, and captures value. This includes target customers, value proposition, revenue streams, cost structure… “Business Model” is both an overhyped and over-used phrase, but defining one for one’s own business is a very helpful theoretical exercise (as long as the delivery behind it is rock-solid).

That definition exercise becomes much easier when entrepreneurs understand that no idea is truly unique (we’ve been doing capitalism for a long time!). Key archetypes exist, and building on them can greatly help accelerate a business’ successes. It is only once a concept has been mastered that it can be deconstructed to create something unique.

In this article, I introduce 85 business models that entrepreneurs should know about. From traditional models like the brick and mortar store to more innovative options like subscription-based models and peer-to-peer platforms, we’ll cover all the bases. By the end of this article, you’ll have a better understanding of which business model is the right choice for your company, and how to implement it effectively.

1. A la Carte business model

Pick what you want: the customer can select one, many, or all parts of a specific product or service. The customer enjoys the ability to have their needs better served while the company can learn more about their habits and preferences. This is especially useful if variable costs are low (as it is for digital offerings).

Value proposition

Control of the purchase given over to the customer.

Key attributes

• Offering that can be easily divided up

• Each product has a high marginal utility

• Low variable costs

• An advantageous pricing versus the sale of a whole product

• A hard to segment market (hard to know who wants what when)

Examples: Skillshare, EdX, Hinge

2. Add-on Business model

Additional charge for extra: the main offer is priced lower than market average, while numerous non-mandatory extras bring in a sizeable part of the total profits. Even though customers often end up paying more than they had originally planned to, they benefit from being able to adapt their purchases to their immediate needs.

Value proposition

Variable offer and low initial price.

Key attributes

• Offering that extras can be linked to

• No other available options for extra (“Lock-in”)

• Extras with high marginal utility

• A product with a low initial price

• Strong advertising to capture market share fast with low price

• High potential for emotionally-driven purchase

• Price-sensitive customers

Examples: Dell, Ryanair

3. Advertising revenue Business model

If it’s free, you’re the product: the company offers a cheap or free product, and subsidises it by offering space for advertisers seeking to reach new customers. The customer benefits from a cheap product while the advertisers are able to target potential buyers. Not to be confused with “Freemium” (see below).

Value proposition

• Free and vast content offered to the customer

• Easy access to targeted groups of customers for ad companies

• Vast amount of data for data-driven companies

Key attributes

• A (very) large customer base or long-term customer engagement

• An easily-segmented customer base (to facilitate advertising)

• An advertiser-friendly product

• Data analysis capabilities / tools

• A transparent contractual relationship with advertisers

Examples: Google, Facebook

4. Affinity club / Affiliation Business model

I make money when you make money: the company helps its partners make sales, usually getting a fixed fee or a percentage in the process. This is beneficial to said partners as they can benefit from extra reach or access to resources without over-relying on capital expenditure.

Value proposition

Easily create a nice side business.

Key attributes

• “Achievements” from partners are easy to identify and track

• A clear commission model

• A strong ecosystem

• Passionate customers

• Clearly identified customers to target

• A win-win scenario for all actors

• Lower investments in sales forces

Examples: Pinterest, influencers, MLMs

5. Aikido Business model

Convert competitors’ strengths to weaknesses: it is possible to gain a large customer base by actively doing the opposite of what other players in the industry are doing. This allows the company to attract customers that are potentially un-served by existing offers.

Value proposition

Product or service radically different from industry standard.

Key attributes

• A transparent competitive landscape, making it easy to know players’ strengths and weaknesses

• Well-defined industry standards

• Regular market research is possible

• Clearly identified barriers of entry

Examples: BodyShop, Cirque du Soleil, Basecamp

6. Auction Business model

Going once, twice… sold: an offer, whether it is a service or a product, is sold to the highest bidder. By applying this model, companies are able to sell at the highest acceptable price (given communication was broad enough), while the customer is able to match the offer to his or her own view of the product’s value.

Value proposition

Customers never pay more than they want.

Key attributes

• A wide customer base that is easily accessible (network effect)

• Rare / heterogeneous products

• A unique selling proposition to beat current market leaders

• A solid regulatory framework (who pays what when and to whom?)

• Products or offers that are difficult to independantly price

Examples: Ebay, Elance, Catawiki, Google (again)

7. Automated selling / Automation-enabled services Business model

No human interaction: as we automate more and more tasks, it has become possible to sell and purchase goods and services without ever interacting with a human. This automation has tremendous potential in reducing costs for companies, and allowing for a wider flexibility to serve final customers.

Value proposition

Flexible and time-saving shopping.

Key attributes

• Identifiable tasks that can be automated

• Products that customers need little advice with

• Simplified processes

• Processes in place in case of malfunction

• Strong technological capabilities

Examples: All automated convenience stores

8. Bait & Hook / Razor & Blade Business model

The razor is cheap, the blades are expensive: while the offer’s starting price is cheap (or even free), the products or services needed to extract value from it are expensive and sold at high margins. In fact, the initial offering is often financed by later purchases. This business model is usually used together with “Lock-In” to better bind customers to the initial product.

Value proposition

Cheap initial product with expensive necessary additions.

Key attributes

• Low-cost (generic) initial product

• Generic product is subsidised by later purchases

• Strong Lock-In potential

• Low barriers of entry

• Frequently used accessories

• High exit barriers (Patents, strong brand)

Examples: Gillette (after which the model is named), Nespresso

9. Barter / Influencing / content promotion Business model

Tit for tat: exchange of goods or services for other goods or services without using money. The offers exchanged generally do not have a direct connection with each other and are likely to be valued differently by each party (ex: the Russians once traded an entire navy for some soda).

Value proposition

The customer gains more than they feel they give.

Key attributes

• The ability to offer a product for free (or nearly)

• Goods or services with different values to different stakeholders.

• Complementary partnerships (supplier, customers, competitors…)

• Good relations with stakeholders (trust matters in bartering)

Examples: Aklamio, Procter & Gamble

10. Basic component / Low-touch Business model

Make more with less: a company makes one of its existing product or service using the minimum amount parts to provide the core task the product or service was designed for. It is especially useful for manufacturing and borrows from “bottom of the pyramid business model” as the new offering is often best suited for developing nations or lower ends of the market.

Value proposition

Cheaper products / services.

Key attributes

• An offering that can be reduced to its bare parts

• A strong brand recognition

• Low cannibalisation risks (if other offers exist)

• Large potential customer base

• Need for cultural understanding / EQ to market properly

Examples: Arvind, Zendesk

11. Bottom of the pyramid / Target the Poor Business model

Target customers at the base of the earning pyramid: a large part of the world is still at the bottom of the earning pyramid, especially in developing countries (though this is rapidly changing). By creating an offer which targets them, a company makes small profits per product sold, but is able to sell it in incredibly high numbers. An added bonus is the possibility of establishing the company within a rapidly developing places to lock in future customers.

Value proposition

Offer products that cater to the needs of this specific population.

Key attributes

• High income inequality

• Large earnings pyramid base

• Positive PR

• Technology able to connect with customers and attractive communication

• Any consumer can buy the offer

• Low(er) quality to avoid cannibalization

Examples: Walmart, Lidl (though that is changing for both)

12. Bundle Business model

All you need in one box: make purchasing simple and more complete by packaging related goods / services together. The customer gets more for their money while the company is able to better manage its stock and supply chain. This often has better margins as customers get worse at assessing the value of many products together (psychology, baby!).

Value proposition

A handful of similar products at a price lower than their addition.

Key attributes

• Products that can be bundled together

• Good packaging, whether physical or digital

• An understanding of the value the customer derives from each product

• A supply chain that can continue to supply bundled items

Examples: Apple, John Lewis

13. Cause Driven / Doing good Business model

Doing good: providing an offer that values ethics over profits. Customers will find a possibility of self-actualisation through the product, whether they seek to serve the environment, the company’s local ecosystem, or humanity in general.

Value proposition

Ethical / sustainable products.

Key attributes

• Stakeholders not overly reliant on profit

• A somewhat universal cause

• An effective PR department

• More expensive products

• Well-off customer base

Examples: Lush, serengetee (now sadly gone)… and countless others worthy of a dollar

14. Co-creation / Partnership Business model

1+1 = 3: Two (or more) companies partner to create a unique offer. The consumer benefits from the combined expertise, and both companies gain access to a new market.

Value proposition

• Improved customer experience thanks to the expertise of the partner

• New products

Key attributes

• A significant value difference between both actors partnering to avoid cannibalizing

• Efficient communication around the partnership

• Shared vision

• Compatible strengths

• Defined roles and limitations

Examples: H&M, F1 & Louis Vuitton

15. Crowd Pricing Business model

What do you think?: Prior to the launch of a product, potential customers can collectively define future retail price based on perceived value

Value proposition

Customers can have a say in the value they see in an offer.

Key attributes

• Same as Dynamic pricing (see below)… but nicer

Examples: N/A

16. Crowdfunding Business model

If one million people invest a dollar, you get one million dollars: a project is financed by a group of untraditional investors (usually the general public). If a pre-defined funding point is reached, the project goes ahead, and the investors get project-specific rewards. These rewards are usually proportional to the amounts invested.

Value proposition

Customers get to participate in things they’re passinate about, and are able to shape its creation.

Key attributes

• Goodwill and / or incentives

• Ability to do “all-or-nothing”

• Free advertising

• Willingness to fail

• Ideas needing early validation / feedback

• Platform with large draw

Examples: GoFundMe, KickStarter

17. Crowdsourcing Business model

Outsourcing to the crowd: information or input related to a task or project is generated by enlisting the services of a large number of people, either paid or unpaid, typically via the Internet. Actors are generally offered a small reward for their contribution.

Value proposition

Chance to participate in the creation process of a value brand, while satisfying entrepreneurial wishes.

Key attributes

• External actors who are able to perform the required task

• Extrinsic or intrinsic rewards available

• An already innovative company

• Increased loyalty

• A channel to communicate

• Well-framed requirements

• Clear and transparent assessment process

Examples: Volition Beauty, PepsiCo

18. Curator Business model

The curator knows best: a curator offers products or services to customers, based on previously acquired knowledge of the customer base and / personalisation. Data is particularly important but not mandatory. This is generally a high-margin business but difficult to scale as automation would beat the purpose. This model is fast disappearing due to progress in machine learning, but a human touch will always have some value.

Value proposition

Products / services tailored to the consumer’s individual needs.

Key attributes

• Difficult to scale

• In-depth knowledge of the customer / customer base

• Extensive feedback collection

• High brand recognition

• Less is more

• Product with high margins

Examples: StitchFix, Prose

19. Customer Loyalty Business model

Incentives for long-lasting fidelity: Customers are given rewards by a company (monetary or others) if they continue to make their purchases from said company. This ensure that customers remain bound to the company, helping ensure future revenues.

Value proposition

Discounted goods or gift push the customer to come back.

Key attributes

• Incentives with well-perceived customer-value

• Possibility of making incremental incentives

• Competitors with similar offers

• Capacity to leverage data to segment customer profiles and offer relevant rewards

• Good communication with customers

• Ability to make rewards “in kind” Vs financial

Examples: Sephora, Starbucks

20. Data into Assets / Data brokerage Business model

Making use of what you know: Value is created by collecting a processing customer data for either internal use or sale to a third party. Internal use includes personalisation and / or prediction (now known as AI, but it has a long pre-2020s history). Note that new laws have made this business model more regulated.

Value proposition

Look at ChatGPT. No really, look at it. How cool is it?! That’s the value proposition.

Key attributes

• Head-start from a business already centred around the acquisition of data

• Strong processing abilities

• Many data points, with many attributes

• Strong data analysis team already in place

• Often associated to hidden revenue Business Model (see below)

• Something to trade for customer data (not always!)

Examples: StitchFix, OpenAI

21. Digitalisation Business model

Making the material immaterial: existing physical offers are transformed into digital versions of themselves. As such, they can be shared and reproduced much faster, at a much lower cost.

Value proposition

Drastically reduced purchasing efforts.

Key attributes

• Dematerialisation of an existing product or service

• Infinite reproduction of services (digital baby!) and reduced marginal costs and efforts

• High IP protection capabilities

• Constant availability (digital baby!)

• Equilibrium between digital value proposition (external) and digital operations (internal)

Examples: Dropbox, Netflix, Charity water

22. Direct to consumer / Direct selling / Disintermediation Business model

Skipping the middleman: Products are sold directly from the manufacturer to the customers, without going through intermediaries. The company thus saves retailing costs (or any other cost associated with the middle-man). These savings can be passed on to the customer. This model allows the company to control end-to-end process, while retaining a connection to its customers.

Value proposition

• More personal sale experience, improved products and services thanks to client proximity

• Better service thanks to proximity

Key attributes

• Possibility of a direct connection to customers

• Control of sales information (both ways)

• Optimisation of internal functions

• Consistent messaging across channels

• Less recognised brand name (often)

• Expert sales staff

Examples: AliExpress

23. Donut selling / Cross-selling Business model

Killing two birds with one stone: offers from an external business are linked to the existing offer. This requires little extra costs, while more potential customer needs can be satisfied and additional revenue generated, as relatively few changes to existing infrastructure and assets are needed.

Value proposition

Customers who know the business will know they’re not taking a risk with a new product.

Key attributes

• Possibility of naturally offering Complementary products and / or services

• Transferable existing competencies

• High level of customer trust

• Good execution as the primary product becomes dependant on the second

• Low-margin original product

• High entry barriers

• Consistent pricing

Examples: Ikea

24. Dynamic Pricing Business model

The right price at the right time: the price for an offer changes depending on a variety of criteria (customer, time of day, weather…). This allows the company to charge a more exact fee to fit the value the customer has attached to the offering.

Value proposition

Prices adapted to what the customer is willing to pay.

Key attributes

• A deep understanding of the offering’s intrinsic value

• Enough data on environmental factors to make accurate prediction

• The technological ability to update prices in real time.

• Real time accuracy

• Pricing software

Examples: Uber, Amazon

25. E-commerce Business model

Online business: offers are sold through a web portal only. This removes most of the costs associated with physically selling a product. Customers can acquire a product at any time and in any place, while the company is able to reduce costs, as well as integrate its sales and distributions processes with other digital processes within the company.

Value proposition

• Provide not only products and services, but also support.

• Larger offering as research is made easier

Key attributes

• Low overheads

• Few intermediaries

• Few testing options

• Constant availability

• A large offering

• Transparency

• Lower costs

• Vast data availability

Examples: Glossier, Fnac-Darty, Asos/Boohoo/Pretty Little things

26. Experience selling Business model

Sell emotions, not products: The customer experience surrounding the purchase of an offer overshadows the offer itself, hence increasing its perceived value. As a result, the company experiences higher demand and can increase its prices dramatically. The experience offer must fit closely to the narrative developed by the brand.

Value proposition

Experience rather than mere functionality.

Key attributes

• An all-star marketing team

• A perfect understanding of the product or service’s value to the customer

• Control over the purchasing environment

• A unified brand theory

• The same experience regardless of branch or channel

Examples: Louis Vuitton, Harley Davidson, Lamborghini, RedBull

27. External consulting / Make More of It Business model

Multiply competencies outside your core business: internally developed expertise, as well as any other high-value assets, are offered to other companies who could benefit from it. This allows the company to produce revenues from unused resources, thus diversifying revenue streams and enhancing the core value proposition.

Value proposition

Ability to use know-how or other resources.

Key attributes

• Spare resources

• Recognised capabilities

• Highly specialised / unique core competency

• Fluctuating or seasonal demand

• Potential outside funding

Examples: AWS, BASF

28. Flat rate pricing Business model

Unlimited consumption at a fixed price: a specific price is asked for an offer, regardless of the use the customer makes of it. The company is thus able to better predict income (though demand is never a given), while the customer is able to manage expenses.

Value proposition

Cost-controlled unlimited consumption.

Key attributes

• Low marginal costs

• Customers have diminishing marginal utility

• A clear, numerical understanding of the “average” customer

• Offer abuse

• Digitalisation

Examples: Netflix, Spotify

29. Franchising Business model

We’re all family: while the franchisor owns its brand, processes and IP, it is able to lend them to independent entrepreneurs. The company thus limits its risks and is able to expend quickly, while the franchisee is able to benefit from an already well-known brand and the availability of know-how and support.

Value proposition

Access to a proven business model for franchisees as well as some expertise, meaning lower risks.

Key attributes

• Quick geographical expansion

• An ability to cater to entrepreneurs

• Low risk

• Pre-existing assets, IP, brand strength (legally protected)

• Attractive assets

• Highly standardised processes

• Standardised IT systems

• High stickiness

• Large moats

Examples: Body Shop, Sephora, Domino’s Pizza

30. Freemium Business model

Choosing between free basics and paid premium versions: basic services are provided free of charge while more advanced features must be paid for. This type of model typically occurs on the internet. The free offer attracts a high volume of customers, while revenue is generated by the (generally smaller) volume of premium customer.

Value proposition

The basic version is free of charge while the premium version is not.

Key attributes

• An addictive or high-value product (Lock-in)

• Low primary customer engagement

• A known minimal conversion rate

• Very low marginal costs

• Strong customer focus

• An understanding of what functionalities increase conversion

Examples: Dropbox, Skype, Spotify, Hootsuite

31. Functional specialist Business model

Make your own league: By strongly specialising on one aspect of its value chain, a company is able to offer an impossible-to-beat value proposition. It is therefore able to sell its expertise to competitors who seek to copy its aptitudes.

Value proposition

An expertise related to the company’s primary model.

Key attributes

• An obsessive attention to details for a specific part of the business

• Many competitors that could benefit from such an offer

• Process that can be applied to other companies or industries

• Low employee turnover

• A wide-ranging network of partners

Examples: PayPal, Amazon, Communication agencies

32. Group Purchases Business model

Bring a friend: A company offers an increasingly reduced price when larger amounts of people purchase the product as a group. The customers get a cheaper product, while the company gains new customers through network effects.

Value proposition

Lower product prices the more people are brought to the sale.

Key attributes

• Strong digital abilities

• A set of enforceable rules to avoid fraud

• Strong social media presence

• High margin products

• A social ecosystem willing to welcome the model

Examples: Zola, Pinduoduo

33. Guarantee replace Business model

You break it, we replace it: Similar to the “trash to cash” model, this model offers customers to systematically replace defective products. In exchange, it can collect those products and potentially sell them a second time, sell them for scraps, scavenge parts… As for the customers, they are more likely to stay loyal. This model is a great addition to the Razor & Blade model and has many parallels to guaranteed availability.

Value proposition

A product that will be replaced systematically.

Key attributes

• Processes to simplify customer returns

• Good customer communication

• Strong customer loyalty

• Long-term partnerships with third-party actors

• Ability to process demand fluctuations

Examples: Timberland, IQOS

34. Guaranteed availability Business model

The offer always works (T&C may apply): The providing company ensures that a product or service previously sold is always online. This becomes central to the business and impacts every part of the value chain.

Value proposition

Ensuring almost 0 downtime for machines and equipment.

Key attributes

• Efficient and easy-to-repair offerings / Easy to offer

• Strong communication channels

• Offerings that rarely break down

• Long term customer relationship

• Industry where availability is crucial

• Ability to handle unforeseen events

Examples: Hilti, Otis

35. Hidden Revenue Business model

Seeking alternative sources: The business’ survival no longer directly depends on the customer. Revenues are instead provided by a third party who cross-finances the offer proposed to customers (generally making it cheaper). The most common use of this model is through advertisement: the customers so attracted are of value to the advertisers who then fund the offering.

Value proposition

Cheaper products as they are cross-financed.

Key attributes

• A product customers need but are unwilling to pay a lot for

• Customers willing to share their data

• Ability to provide an offering for

• Strong partnership with stakeholders

• Low marginal costs

Examples: Spotify, JCDecaux, Youtube

36. Homemade Business model

Do-it-yourself: The company sells ingredients that need to be assembled by the customer in order to create the finished product. The company reduces costs by exporting part of the value-creation process, while the customer is able to create something that will fit their needs.

Value proposition

Customers can make products as they see fit.

Key attributes

• A product or service that can be broken down

• A product that is not dangerous

• Obvious benefits to the customer

• A reduction in marginal costs

• Clear instructions

Examples: Mwamem, Aroma-zone

37. Ingredient Branding Business model

Brand squared: part of an offering originates from a specific supplier. Because of the supplier’s expertise/image/credentials, the offer is advertised as containing the “ingredient”. The positive association with the ingredient brand is projected on to the product and increases its attractiveness.

Value proposition

A more desirable product.

Key attributes

• Cannot be bought individually

• An essential function in the final product

• Significantly better than the competition’s offers

• High brand awareness

• The final product is not overshadowed

Examples: Intel, Starbucks

38. Integrated supply / Integrator Business model

Involvement all the way down the line: An integrator has control over most of its offerings’ value creation process, including all resources and capabilities in terms of value creation. Efficiency gains, economies of scope and reduced dependency on suppliers result in a decrease in costs. These savings can then be passed on to customers. The company however loses out on specialisation, and may incur numerous complexity costs.

Value proposition

By managing most operations internally, the company can pass savings on to customers.

Key attributes

• Not benefitting from specialisation

• Broad knowledge depth

• Focus on downstream value chain

• Better understanding of the value chain than competitors

• No outsourcing costs

Examples: Zara, Intel, Tesla

39. Layer Player Business model

Benefiting from specialised know-how: the company provides a single value-adding offer to other companies value chains, across a variety of industries. The company benefits from economies of scale, while customers benefit from their expertise.

Value proposition

Company is able to serve many customer segments across industries.

Key attributes

• Typical client is an orchestrator

• Specific know-how

• Ability to see changing market trends ahead of time

• Competitive industry

• Possibility of later expansion to other markets

• Mature industry with highly vertically integrated companies

Examples: AWS, PayPal

40. Leasing / Rent instead of Buy Business model

Pay for temporary right to use: customers rent the product instead of outright buying it. This models differs from shared use because the company receives the product back after each use. The company is able to get more regular revenues which last during the entire product life-cycle, while the customer enjoys the product for cheaper than it would have cost to purchase it. In fact, both parties benefit from greater efficiency in product utilisation, given that time of non-usage, which unnecessarily ties capital down, is reduced.

Value proposition

The customer is able to use products they might not be able to otherwise, freeing up capital.

Key attributes

• Capital-intensive assets

• Offer financed in advance

• Ability to assess rent duration

• Possibility to transfer to pay-per-use model

• Product customers are happy to share with others

Examples: Rent the Runway, Blockbuster

41. Licensing Business model

Commercialising intellectual property: the company develops patents and other IP resources, which it then offers to other actors. As such, realisation costs are low (if not 0), but the assets are nevertheless source of revenue. Licensing gives a company the freedom to focus on R&D and allows the provision to third parties of knowledge that could otherwise be under-utilised.

Value proposition

An already recognised product.

Key attributes

• Rare IP

• More than one interested party

• Recognisable brand

• Knowledge and technology-intensive context

• Long-term relationship with licensees

• Strong R&D capabilities

• Clear rules and regulations / solid patents

Examples: Coty, L’Oréal

42. Lifestyle as a product Business model

Don’t you want to be more like me?: A lifestyle brand is a brand that attempts to embody the values, aspirations, interests, attitudes, or opinions of a group or a culture for marketing purposes. Lifestyle brands seek to inspire, guide, and motivate people, with the goal of their products contributing to the definition of the consumer’s way of life.

Value proposition

An ability to be inspired, guided and motivated through products and services.

Key attributes

• Well-known spokespeople

• Partnerships

• An ability to market a lifestyle

• Long-tail offerings

• A varied offering

Examples: Goop, Harley Davidson, Red Bull, M&S

43. Lock-In Business model

Forcing loyalty with high switching costs: customers are “forced” to keep using a company’s offer because of high technological, economic or legal switching costs. This means that most customers will not be able to / want to change to another provider. This is generally generated through product or service interdependency.

Value proposition

Low value for customers.

Key attributes

• Switching “cost” is not only monetary

• Well understood switching costs

• No interoperability with competition

• Patents to ensure non-interoperability

• Rewards for cumulative purchases

• Unique additional products

• High customer value

Examples: Nespresso, Microsoft, Canon, Kindle

44. Long Tail Range Business model

Reverse Pareto: rather than concentrating on one offer which would make the bulk of its sales, a company chooses to offer a wide variety of niche products which attracts a large number of customers (though they neither demand high volumes nor high margins individually). If a wide variety of these products is offered in sufficient amounts, the profits from the resulting accumulated small sales can add up to a significant amount.

Value proposition

Small quantities of a large number of products sold, allowing for more choices for the customer.

Key attributes

• Narrow margins

• Long-term gains

• All products contribute equally to revenues

• Efficient distribution costs

• Low search costs for customers

• Highly specialised / individual offerings

• Complexity

Examples: Youtube, Itunes

45. Mass Customisation Business model

Off the rack individualism: The company offers semi-personalised product without losing any efficiency thanks to an optimised value chain. As a result, individual customer needs can be met under mass production conditions and at competitive prices.

Value proposition

Customisation according to customer needs for the same price as mass products.

Key attributes

• Gain useful user feedback on products

• High production efficiency

• Varied customer tastes

• Same price as competitors

• Close customer relationship

• Ability to handle complexity

• Automation

Examples: Lenovo, Subway

46. Media Blends Business model

Learn and consume at the same time: eliminate the boundary between media and commerce by offering products that are shown within media. This allows companies to insert their product organically, and customer to better understand them and see them at work.

Value proposition

Purchase products as seen in media.

Key attributes

• Products or services that can blend seamlessly

• Partnership with media companies

• Media-linked capabilities

• Technology making the purchase easier

• Good understanding of what the customers seek in their media interactions

Examples: iQiyi, Tasty

47. Multi-level marketing Business model

Sell to the seller who sells to the seller who sells to…: MLM is a strategy some direct sales companies use to encourage existing distributors to recruit new distributors who are paid a percentage of their recruits’ sales. Distributors also make money through direct sales of products to customers. The ethics of this business model is still under discussion.

Value proposition

Offers participants the opportunity to earn income both through direct sales and by recruiting new sellers.

Key attributes

• A product that can be sold without training

• Good PR

• Celebrity endorsement

• Tracking sales

• Legal protection

Examples: Avon, Younique, Amway

48. Negative operating cycle / Cash Machine / Cash Advance Business model

Selling a product before having paid for it: the customer pays a product immediately, while the company has negotiated generous terms with suppliers, which allows it to have more cash in hand at any given time. This results in increased liquidity that can be used to amortise debts or fund investments.

Value proposition

Increased liquidity for the seller (few benefits for the buyer).

Key attributes

• Fast-moving/build to order products

• Position of power with suppliers and customers

• Customers can pay quickly

• Product or service has high perceived value for customers

• Low cash reserves

Examples: Groupon, Amazon

49. No frills Business model

Whatever, as long as it’s cheap: the company concentrates on providing the minimum necessary effort a customer is willing to accept for an offer. Said offer is thus a core proposition, with little around it. Cost savings are shared with the customer, ensuring a larger customer base, but lower margins.

Value proposition

Usual value proposition is reduced to its minimum, and savings passed on to customers.

Key attributes

• Price-sensitive customers

• Regular costs audits

• Standardised offering

• Automation

• Economies of scale

Examples: Aldi, Vaseline

50. On-demand Business model

Get it as soon as you want it: This model fulfils consumer demand on the basis of immediate access to goods and services. It is a business model driven mostly by technology

Value proposition

Products and services available at all time.

Key attributes

• A product that can be made available at any time and place

• Technology allowing connections between client and offer

• Platform based model

• C2C

• Aggregation

Examples: GlamSquad, Stylelisted

51. One for One / Buy One give One Business model

Buy one / Give one: One for one is a social entrepreneurship business model in which one needed item is given away for each item purchased, appealing to socially conscious consumers.

Value proposition

Combine consumer purchasing with social impact.

Key attributes

• A high volume product

• A necessity for part of the population

• A partnership which benefits all actors (ex: NGOs)

• Partnership with an NGO able to offer services around the donation

• Customers willing to subsidise prices

Examples: Warby Parker, TOMS Shoes

52. Open business Business model

Leverage collaborative value creation: Open business is an approach to enterprise that draws on ideas from openness movements like free software, open source, open content and open tools and standards. The approach places value on transparency, stakeholder inclusion, and accountability. Collaboration with partners in the ecosystem becomes a central source of value creation, thus benefiting all actors.

Value proposition

Leverage transparency, collaboration, and stakeholder inclusion to drive value creation. By embracing open-source principles, it fosters innovation through collective input and shared resources, benefiting all ecosystem participants.

Key attributes

• Coherent value chain, attuned to that of future partners

• Cooperation that benefits all stakeholders

• A focal product, service or company which feeds all the others

• Areas in the value creation process where other parties can contribute

• A possible win-win scenario

Examples: Red Hat

53. Open source Business model

Working together to create a free solution: the core of the offer (usually source code) is made freely available to anyone wishing to use it. As such, it can be contributed to (encouraged), or simply used as a customer would. A company can earn revenues by providing complementary services, such as consulting and support. However, it usually benefits more from becoming an industry standard, and the image boost that comes with it.

Value proposition

Freely available products or services created by collective brainpower.

Key attributes

• Appropriate technology

• A developed sense of community

• Low R&D budget

• Personal motivations

• Free of supplier dependencies

• Set standards for creation

• Shared risks and resources

Examples: Firefox, Wikipedia

54. Orchestrator Business model

Efficiency within the value chain: the company focuses on its strength within the value chain, while it outsources and coordinates those aspects that can be optimised by an external actor. It is thus able to reduce costs and benefits from the supplier’s expertise. Additionally, the focus on core competencies enhances performance.

Value proposition

Maximize operational efficiency by focusing on core competencies while outsourcing non-core activities to specialized partners. This approach reduces costs, leverages the supplier’s expertise, and enhances overall performance.

Key attributes

• Efficient coordination abilities

• Efficient decision-making abilities

• Close cooperation with partners

• An appropriate knowledge of the company’s key strengths

• Hands-on management of partners

Examples: Nike

55. Pay as you go / Pay per Use Business model

Pay as you go: The customer pays on the basis of what he or she effectively consumers, whether that is a product or a service. This can be in units of time or distance, for example. The customer is thus able to be more flexible about his or her consumption, though it may be priced higher than if the offer had been purchased outright.

Value proposition

• Pay for usage instead of a fixed rate.

• Highly transparent

Key attributes

• Customers seeking flexibility

• Transparent/simple fee system

• Ability to make sales estimate or minimum usage in contract

• Ability to track usage efficiently

• Learn from customer behaviour

• Offer financed in advance

Examples: Lime, AWS

56. Pay what you want /pay what you can Business model

Whatever it’s worth to you: clients pay the amount they want for an offer, sometimes going as low as zero should they choose to do so. A minimum amount may be set in order to avoid unethical behaviour a guarantee some revenue. Alternatively, a suggested price may be indicated by the company in order to guide the client. The client is thus able to control his other expenses, while the company is able to attract a large amount of customers, while benefiting from publicity.

Value proposition

The customer decides how much to pay for a product or service, hence keeping control over their assets.

Key attributes

• Possibility of guiding the customer to wanted price

• Wide consumer base

• Low marginal costs

• Strong relationship with customers

• Fairness as a social norm

• The value of a product is easy to gage

• Ability to apply this model to only part of the offering

• Ability to shut out free riders

Examples: RadioHead, BrandAlley

57. Peer to Peer Business model

Dealing from person to person: individuals interact to buy and sell goods and services directly to and from each other (or produce goods and service together). Though this model is by nature decentralised, an organising company can offer a meeting point and communication service which connects these individuals. The company is then able to earn a fee through this service.

Value proposition

Transaction between individuals, similar to commercial interactions, with added social benefits and increased marginal utility.

Key attributes

• Set of ground rules

• Ability to create network effects

• Community relationships

• Trusted image

• Simplified processes

• High barriers of entry

Examples: PAP, eBay

58. Performance-based contracting / result-based Business model

Basing fees on results: This model is similar to pay-per-use insofar as the value of the offer is not based on its physical value. Instead of a fee per use, it is here instead tied to the outcome of the offer utilisation. This leads the company to develop special expertise to ensure good performance, which benefits the client. Performance-based contractors are often strongly integrated into the value creation process of their customers.

Value proposition

A precise output is paid a specified amount, allowing customers to control their costs.

Key attributes

• Strongly integrated manufacturing ecosystems

• Ability to track performance

• B2B

• Long-term cooperation

• Complex products with challenging application

• Transparency

• No upfront costs

Examples: Rolls-Royce, Government agencies

59. Personalisation Business model

One step beyond mass customisation: the rise of data, as well as digitalisation and optimised processes allows us to offer a different product to different customers in a simultaneous manner. The company is hence able to acquire a loyal following while the customer is pleased that his or her tastes are taken into account.

Value proposition

Maximum value from the product for a specific customer.

Key attributes

• Different from mass customisation

• Data analysis capabilities

• Communication with customers and their needs

• Data collecting processes

• Ethical rules in place to avoid potentially costly mistakes

Examples: Spotify, Netflix, Asos

60. Platform Selling / Brokerage Business model

Sell next to your competitor: By aggregating a large number of companies, a platform is able to attract a large number of customers, hence creating an ever-increasing network effect which benefits all parties.

Value proposition

A wide offering.

Key attributes

• Mechanisms that make the platform grow with every purchase

• An ability to efficiently manager sellers

• Efficient contracts

• More Supply

• More demand

• Lower prices

Examples: FeelUnique, BeautyLish

61. Pre-paid / credit model Business model

Pay now, use later: Several units of a good or service are purchased in advance. Validity of these units can be limited in time or not.

Value proposition

Customers can purchase multiple units of a good or service upfront, often at a discount, providing them with convenience and potential savings. For the business, it ensures cash flow and customer retention

Key attributes

• Prepaid units: Goods or services purchased in bulk ahead of time.

• Usage flexibility: Customers can use units as needed, within or without a time limit.

• Discount incentive: Bulk purchasing typically offers a cost benefit.

Examples: AWS, WeWork

62. Private Label / White Label Business model

Own brand strategy: a product is manufactured or packaged for sale under the name of the retailer rather than that of the manufacturer. The same product or service is often sold to a variety of brands. In this way various customers segments can be satisfied with the same product.

Value proposition

Product is sold by a different company than that which manufactured it.

Key attributes

• Low infrastructure

• Specialisation

• Economies of scale

• Sales supplemented by white labels

• Strong differentiation between actors selling the same product

• Price sensitive customers

Examples: Schwartz, Tang Frère

63. Product to Service / Solution Provider Business model

Finding all you need at the one-stop shop: Every needed products and services for a specific offers are bundled to a specific point of contact. As such, customers can benefit from relevant expertise, while the company adds revenue streams, locks customers in, and gain close contact with its customers, hence creating a virtuous circle.

Value proposition

Single source for a specific offer so customers can concentrate on their core activities.

Key attributes

• Complete area expertise

• Ability to provide an all-inclusive package

• Increasingly close relationships with customers

• New ways to extend existing products and services

• Key customer insights gained

• Increased complexity and variety

Examples: Amazon, Apple

64. Push to Pull Business model

Come will they and it build: The value chain is decentralised and made flexible in order to become more customer focused. This generally means higher costs but higher perceived customer value, leading to higher margins.

Value proposition

The customer is king.

Key attributes

• Flexible value chain (including suppliers)

• High adaptability

• Low inventory costs

• A specific decoupling point

• Foresight on future demand

• Identified optimal points to integrate the customer to the value chain

• Eliminate waste

• Central planning

Examples: Zara, Toyota

65. Quality Assurance Business model

The customer knows the offer is good: the company is able to ensure the quality of its offering is on par with consumer expectation, hence improving its image and attracting potential new customer.

Value proposition

A promise to customers that the offer will not fail certain expectations.

Key attributes

• Understand customer expectations

• An easy way to display the quality assurance

• Contractually protected quality assurance

• Communication

• Transparency

Examples: Label AB, Label Rouge

66. Revenue sharing Business model

Win-win with symbiosis: Revenues are shared with all who participated to the ecosystem’s health, be they suppliers, or even competitors. This is usually because the presence of more than one actor is beneficial to the all the others through a higher potential customer base or higher customer satisfaction.

Value proposition

All participants in the ecosystem share the revenue.

Key attributes

• Commonly found on the internet

• Fair and transparent way of sharing revenue

• Beneficial / win-win partnerships

• Industry with fragmented value chain

• High barriers of entry

Examples: NFL, Medium, Spotify

67. Reverse Auction Business model

Going twice, Going once…: Roles of sellers and buyers are reversed. Sellers compete to obtain business from the buyer and prices will typically decrease as the sellers underbid.

Value proposition

• All parties get a price according to the perceived value of the offer.

Key attributes

• An environment with near perfect information availability

• A propensity towards digitalisation

Examples: N/A

68. Reverse Engineering Business model

Taking lessons from competitors: this pattern refers to the reproduction of another company’s product following detailed examination of its construction or composition. As this system requires little investment in research or development, the ensuing products can be offered at a lower price than the original one.

Value proposition

A product that is either as good as the original or appeals to a new customer segment.

Key attributes

• Unprotected IPs

• Industry transparency

• Consistent patent expiration watch

• Good PR / Legal teams

• Strong recruitment capabilities

Examples: Pelikan, Denner

69. Reverse Innovation Business model

Learning from good-enough solutions: Simple and cheap offers developed for emerging markets are imported and sold in developed economies. These offers are often innovative as they were created in a world largely untethered by complex infrastructures.

Value proposition

Offer innovative solutions to customers.

Key attributes

• Products that have value across the world

• Untouched key functionalities

• Locally-based R&D

• Reduced costs

• Protected IP

• Efficient repackaging

Examples: Nokia, TVS

70. Reverse Razor & Blade Business model

The opposite of Gillette: Offer low-margin offers tied to an original product at a very low price to encourage the sale of the much higher margined original product. This means customers have less resentment towards the company while the company enjoys high margins.

Value proposition

Enjoyment of a product once the initial payment has been made.

Key attributes

• High-margin initial product

• Offers that add value to the initial product

• Less customer resentment

• Expensive initial product

• Ability to supply high demands

Examples: Amazon, Apple

71. Robin Hood Business model

Take from the rich, give to the poor: an offer is priced differently depending on the buyer’s income, so that most of the profits are made from richer customers, who effectively cross-finance the offer for poorer customers. Similarly to the Bottom of the Pyramid model, this way of doing thing generates little initial profits, but creates economies of scale that other providers cannot achieve. Additionally, it has a positive effect on the company’s image, and recruits potential customers for the future.

Value proposition

Offer a product the disadvantaged might not otherwise be able to afford, while richer customers have a better conscience.

Key attributes

• Economies of scale

• Positive image

• Market with a solid customer base

• High margin market

• Increased future sales

Examples: Warby Parker, TOMS Shoes

72. Scarcity Business model

“Hurry up, we’re almost out of stock”: Producing few products infuses it with rarity in a world where everything is limitless. This enhances the company’s image and increases revenue due to perceived value. This however means missing out on economies of scale. Note that scarcity can be in product units, but also in time.

Value proposition

A product which gains in perceived value due to rarity and demand.

Key attributes

• Effective communication

• A process to handle dissatisfied customers

• A strong analysis of optimal revenues

• A real scarcity

• High word-of mouth possibilities

Examples: Pat McGrath, Starbucks, Booking.com

73. Self-service Business model

Putting the customer to work: the customer is (knowingly or unknowingly) tasked with producing part of an offer’s value creation process. In exchange, the company is likely to reduce the offer’s price. This is particularly suited for process steps that add relatively little perceived value for the customer, but in fact incur high costs. Customers are able to save time, as is the company: as in some cases the customer is able to execute a value adding step more quickly than the company.

Value proposition

Lower price, as well as time savings.

Key attributes

• An understanding of customer price sensitivities

• High costs processes with low perceived customer value

• Customer information / training

• Perceived customer value

• Error-free process

Examples: Ikea, McDonalds

74. Shared Use / Fractional Ownership / Fractionalisation Business model

Timeshare makes for efficient usage: Assets are shared by a group of owners. The assets linked to this type of model are typically capital-intensive, yet required on a regular basis (though not consistently). The customers are able to own and fully utilise a needed product, while the company is able to make a sale it might not otherwise have been able to make.

Value proposition

Ability to purchase products that one may not be able to otherwise afford, and more efficient use of said product.

Key attributes

• Company oversees maintenance

• Company creates clear rules (ex: exit clauses)

• Capital intensive assets

• Customers willing to share assets

• Risks

Examples: HomeBuy, Blablacar, OuiCar

75. Shop Squared / Shop in Shop Business model

Piggybacking: a company integrates an already existing commercial space instead of creating one from scratch. The hosts can benefit from a larger number of customers and a constant revenue in the form of a rent, while the hosted company gains access to cheaper resources such as space, location or workforce.

Value proposition

Extra products and offers in the same convenient space.

Key attributes

• Possible synergies

• Higher customer loyalty

• Closer proximity to customers / higher visibility

• No cannibalism

• Close cultural and operational fit with partners

Examples: Starbucks, Superdrug

76. Social Purchasing / User communities Business model

Put the community to use: Customers use media to share and purchase products, abandoning entirely the confines of the brand control environment. The company benefits from potential virality and network effects while customers is able to receive targeted messages tailored to their interest.

Value proposition

Lower prices thanks to a social purchase component.

Key attributes

• Technological ability to track customer purchases

• Strong social media presence

• Customer engagement

• Contractualisation

• Products that need to be tried

Examples: Weishang, Mogujie, L’Oréal

77. Subscription / Subscription club Business model

Buying a season ticket: the customer gains access to a product or a service by paying a regular fee (usually monthly or yearly). The company is thus able to generate a steady income while customers benefit from low usage costs and consistent availability.

Value proposition

Customers save time, money and energy. The price of the offer is often lower than that of a repeat purchase.

Key attributes

• Regular access to customers

• Easy to understand terms and conditions

• Long-term benefit for the customer

• Product needed on a regular basis

• Data analysis capabilities

Examples: HelloFresh

78. Supermarket Business model

Large selection and small prices under one roof: a large number of products (or services) are offered under the same roof by a company. This attracts a large customer base, which keeps the prices generally low. The price is also kept low thanks to economies of scales.

Value proposition

Sell of a large variety of products under one roof for a low price..

Key attributes

• A large number of partners

• A way to contractually manage many partners

• An understanding of the variety customers seeks

• Effective supply chain

• Large population

• Standardised processes

Examples: Carrefour, Sephora

79. Top of the Pyramid / Ultimate luxury Business model

More for More: By providing the best possible products, along with the best possible services and branding, the company is able to target the richest customers. As systematic differentiation is key, the costs are high, but are met by very high margin due to the small customer pool.

Value proposition

Great service… and feel like a Star

Key attributes

• High quality services

• Very high margins

• Great branding

• Well-trained employees

• Scarcity effects

• Small customer pool / fluctuating demand

Examples: Lamborghini, Rolex

80. Trash to Cash Business model

Turning old rubbish into new cash: used products are collected by the company and either sold for a profit or transformed into new products. This is generally a profitable endeavour, as collection costs are generally extremely low. In addition to removing some resources costs, it also assuages some customers’ consciences with regards to their environmental impact.

Value proposition

Goods that give a good conscience.

Key attributes

• Resources that have use after their shelf life

• Environmental products / green policies

• Processes that can accommodate a new resource diversity

• Cheap resource acquisition

• High margin industries (who usually produce the most valuable trash)

Examples: GameStop, H&M

81. Two-sided Market / Indirect network effect Business model

Attracting indirect network effects: similar to platforms, a two-sided market model operates on the basis of connecting and serving more than one group of customers. The value of the platform increases as more groups or individual members of each group use it. The two-sides are frequently different types of entities: businesses on one side and NGOs on the other, for example.

Value proposition

Network effects for both providers and consumers.

Key attributes

• Network effects

• Two or more sides

• Quick visibility to develop

• Identification of all stakeholders (included/left out)

• Identification of value stream between stakeholders

Examples: Facebook, Groupon

82. Unbundling Business model

Give the client more choice: unbundling is the idea of removing the ties between products to offer them as stand-alones rather than as part of a package.

Value proposition

The ability to not be tied down by un-extracted value.

Key attributes

• An industry ripe for innovation / disruption

• Very low barriers of entry

• Slow-moving competitors

Examples: Netflix, Google

83. Unique Format Business model

This only works here: Unique format is a form of the lock-in business model, which has been pushed to render switching to another product impossible. Instances are rare, and legal ramifications possible.

Value proposition

A product that works perfectly with specific products and services, creating an entire eco-system.

Key attributes

• Communication in case of potential backlash

• Set an industry standard

• A product customers can’t live without

• Regular use

• No legal barriers

Examples: IoS

84. User Design Business model

The customer as inventive entrepreneur: the customer is the designer behind an offer (not to be confused with the manufacturer). The company provided consumers with all the necessary support, and produces the product once designed. As such, it is able to benefit from customer creativity, while the customer is able to benefits from pre-established infrastructure. Revenue can be earned by design, or by sale.

Value proposition

Customers realise their entrepreneurial dreams without having to create any infrastructure

Key attributes

• Get feedback on customer preferences

• Products customers want to help design / Customise

• Simple to use tools for creation

• Simple products

• Community

Examples: TeeSpring, Lego

85. Variable-based pricing Business model

Larger waves means lower prices: The price of an offer changes based on a specific variable. This is very similar to dynamic pricing, but less specialised and reliant on algorithms. It is better understood and better for marketing purposes.

Value proposition

Help customers understand why they are paying the price they are paying.

Key attributes

• High margin products

• Ability to handle fluctuations

• Transparent choice of variable

• Good for marketing purposes

• Understanding of customer needs and wants

Examples: Alaskan Airlines, Asigra

This is a long read, but hopefully budding entrepreneurs will learn something new; there is an infinity of ways to make money. What matters is figuring out the right business model for one’s business… and for oneself.

Good luck out there.