Business Models and Strategies

Models of Business

• There are 8 models of business:
  • 1. Selling a product (physical or digital)
  • 2. Renting something out
  • 3. Taking a commission (marketplaces and platforms)
  • 4. Subscription-based model
  • 5. Pay-per-use model
  • 6. Selling a service
  • 7. Advertising model
  • 8. Percentage of assets managed model

Selling a Product

• Creating value for the customer
• Capturing that value through pricing
• Delivering the value through the process
• Example: selling a physical product (e.g., clothes) or a digital product (e.g., a course)
• Focus on unit economics (cost-efficient production and pricing strategy)

Renting Something Out

• Renting out a product or service to someone else
• Focus on high utilization rates to maximize revenue
• Examples: renting out a studio space, a department, or a car

Taking a Commission (Marketplaces and Platforms)

• Acting as an intermediary between buyers and sellers
• Taking a commission on each transaction
• Examples: Cambista (currency exchange), payment gateways, and online marketplaces (e.g., Upwork)

Subscription-Based Model

• Offering a service or product on a recurring basis
• Predictable revenue stream
• Examples: software as a service (SaaS), streaming services, and fitness gyms
• Focus on customer retention and engagement

Pay-Per-Use Model

• Charging customers based on their usage
• Examples: cloud storage, Amazon Web Services (AWS), and messaging apps

Selling a Service

• Offering expertise or skills to customers
• Focus on differentiating and niching down
• Examples: consulting, coaching, and freelance work

Advertising Model

• Offering a platform or audience to advertisers
• Focus on building a large and engaged audience
• Examples: Facebook, Instagram, and influencer marketing

Percentage of Assets Managed Model

• Managing assets on behalf of clients
• Taking a percentage of the assets as a fee
• Examples: investment platforms, hedge funds, and wealth management firms
• Focus on growing the assets under management

Models of Business

• 8 business models exist, each with its unique characteristics and revenue streams

Selling a Product

• Creating value for customers through physical or digital products
• Capturing value through pricing strategies
• Delivering value through efficient production and logistics
• Example: selling clothes or online courses

Renting Something Out

• Renting out products or services to customers
• Focus on high utilization rates for maximum revenue
• Examples: renting out studio space, departments, or cars

Taking a Commission

• Acting as an intermediary between buyers and sellers
• Taking a commission on each transaction
• Examples: currency exchange services, payment gateways, and online marketplaces like Upwork

Subscription-Based Model

• Offering services or products on a recurring basis
• Predictable revenue streams through customer retention and engagement
• Examples: software as a service (SaaS), streaming services, and fitness gyms

Pay-Per-Use Model

• Charging customers based on their usage
• Examples: cloud storage, Amazon Web Services (AWS), and messaging apps

Selling a Service

• Offering expertise or skills to customers
• Focus on differentiating and niching down
• Examples: consulting, coaching, and freelance work

Advertising Model

• Offering a platform or audience to advertisers
• Focus on building a large and engaged audience
• Examples: Facebook, Instagram, and influencer marketing

Percentage of Assets Managed

• Managing assets on behalf of clients
• Taking a percentage of the assets as a fee
• Examples: investment platforms, hedge funds, and wealth management firms
• Focus on growing the assets under management