9 Most Disruptive Business Model

https://morethandigital.info/en/9-disruptive-business-models-new-opportunities-for-companies/

Moving into 2018, 75% of CEO’s of global 2000 companies have digital transformation as the centre focus of their corporate strategy.

Having that shift in your business means that you are giving yourself, and your employees the chance to access better data, and better ways to process this data because the technology you are using are more advanced, and up-to-date.

With having better data, comes better selling and marketing techniques and democratises the access to information, and decision making, meaning from a sales and marketing point of view, you can be more productive.

1. Freemium Model

One of the most frequently used business models. The consumer receives a product or service free of charge. Either only basic functions are offered and for premium functions, no branding or extension of the services, the customer must then pay. This way you can quickly reach a broad customer base.

This model is especially applicable for products or services that have low marginal costs (additional costs per additional customer) or where marketing and customer information have a higher value than the operating costs.

The freemium model is one of the most popular business models online. This is where users get either a “basic” (free) version of a product/service, or a “free” trial. This user will then have the option to upgrade to a paid version of said product/service.

LinkedIn do this well for their upgraded version, as does Dropbox, Hootsuite and hundreds of other companies.

Typical examples: Spotify, Linkedin, Xing, Canva.com, MailChimp

2. Subscription Model

Products and services can usually also be offered as subscriptions. An amount that would normally only occur once is split or a new service is created that is billed periodically. The aim is to bind the customer in the long term. In contrast to the one-time purchase, the customer benefits from improvements and extensions of the service.

Non-divisible products can also be converted into a subscription here. Amazon has already provided an example with this system of how products such as detergents, cosmetics, etc. can also be delivered automatically on a regular basis.

Before the internet became so inclusive in our day-to-day lives, the subscription model was not as prevalent as it is now.

The subscription model works by bringing a customer into the business based on a monthly payment, giving them continued access to a specific product/service. Take Netflix as an example. They have over 100 million users paying a small monthly subscription fee for access to thousands of films and tv shows.

Typical examples: Amazon, Netflix (and maybe GenMudaID) - selling content

3. CUSTOMER DATA

A model that has gained in popularity especially through Google. For many entrepreneurs, this is also the most incomprehensible business model, but it has great potential for some services. Since such business models usually evaluate customer data for advertising or personalized offers, it is interesting to use a lot of information about customers.

The free model has been adopted by the likes of Facebook, Instagram, Google and Twitter. The ideology behind the free model is that you, as the user become the product because you are not paying for this. This means that your data becomes the most valuable part of the business, as does your attention for advertising purposes.

Typical examples: Google, Facebook

4. Marketplace Model

For some industries, marketplaces already had or have great disruptive potential. The business model used here is usually a digital marketplace which connects seller and buyer on a common platform. Money is usually generated via brokerage fees, commissions or fixed transaction costs. However, it is also possible to use membership fees on the platform or to generate money through advertising.

Typical examples: Amazon, Alibaba, Uber, eBay

5. Sharing Economy – Access-over-Ownership Model – Renting & Leasing

In the classic sense, the sharing economy is referred to as letting. Goods or services that can usually only be purchased are made available to another person for a limited period of time. There is the example of car sharing. The car is made available for a certain period of time and a number of km for another person against payment. In general, this can be applied to all products, whether from private individuals or companies, real estate or intangible assets.

This business model is all about a “sharing” philosophy. You pay to use the product/service, but it does not become yours to own; you are only accessing it. This is one of the most disruptive business models as it gives the same experience as purchasing something, but without having the ownership implications.

Those who are doing this well would include Zipcar and AirBnB.

Typical examples: AirBnB, Sharoo, Mobility, Lyft

6. User Experience Premium

This is a premium model that can be easily observed using Apple. A good customer experience adds value to an exchangeable product. Service, the brand and especially the experience of the customer are improved and premium prices are charged.

This is all about giving your consumers a unique experience that they are willing to pay good money for. Think about Tesla. Elon Musk has created a unique product with Tesla and because of how innovative, and how experience-driven it is, the company and its CEO are both benefiting from the success of not only the experience they offer, but how digitally-disruptive Tesla is.

Typical examples: Tesla, Apple und Premium-Marken

7. Pyramid Model

The model is a typical sales model that has been available for years. Especially due to the easy billing by technical aids, these pyramids models can be quickly built up and easily managed. It is especially interesting for products with high margins and which can be easily explained.

Typical examples: Amazon Affiliate, Microsoft, Dropbox

8. Ecosystem – Create your own ecosystem

To bind customers to an ecosystem in the long term through a “lock-in” process in a service is a dream for every entrepreneur. For example, if you have a mobile phone from Apple or with Android, you are probably included in this ecosystem. You buy hardware and use software that may only be compatible in the same system. This makes the change difficult and also prevents new competition from gaining a foothold.

Thanks to the likes of Google and Apple, the Ecosystem model is more disruptive than ever before. This business model is a success because of the way it sells an interdependent suite of products/services that when purchased, increase in value based on how many you own.

This does create consumer dependency but this is what makes Apple users stay with Apple (myself included).

Typical examples: Apple, Google

9. On-Demand Model

Time is money, that is the structure of this business model. The immediate access is sold or also the premium access to “time”. The delivery, the product or the service can be called up at a certain point in time. Video-on-demand, taxi (over) on-demand and many other systems are a good example. Companies or persons with goods or time provide their services for persons without goods and time but with money.

As important as on-demand content is, having an on-demand business model serves as an even more vital part of embracing a digital transformation. This works by having users pay for a service that they don’t have time to do for themselves, but is fulfilled by people with time, and short on money.

For example, Uber and Lyft have made the on-demand model a huge success.

Typical examples: Amazon Prime, Uber, Upwork

Now that you, as a CEO can see my 9 business models of digital disruption, it is imperative to also understand changes that are currently happening so that you can be ahead-of-the-curve.

#1: Outcome-based models:

understanding how profitable each customer is, and developing a business model to facilitate individuality.

#2: Expansion-based models:

taking your business and expanding into new industries and markets.

#3: Digital-first models:

taking the way products and services are designed, and delivered and taking the digital approach to serve more customers online.