Digital Business Models Chapter 4

Questions and Answers

What is a strategy that involves attracting producers to persuade their customers to join?

Big bang adoption

Micromarket

Viral growth

Evangelism (correct)

Which monetization option involves charging a portion of transaction volume?

Market access fee

Transaction fee (correct)

Freemium model

Subscription fee

What is described as targeting a small market where members already interact?

Big bang adoption

Evangelism

Micromarket (correct)

Viral growth

Which strategy relies on traditional push marketing to generate initial interest?

Big bang adoption Signup and view all the answers

What is included in the concept of a freemium model?

Certain functionalities are free but premium features require payment Signup and view all the answers

Which of the following best describes the concern with transitioning from a free service to a paid model?

It is a delicate issue that requires careful handling Signup and view all the answers

What aspect of platform monetization may involve subsidizing price-sensitive user groups?

Curated offerings Signup and view all the answers

In which model do all users contribute to the costs while some are subsidized?

Two-sided platform Signup and view all the answers

What is the typical duration of the fundraising process via a crowdfunding platform?

A few months Signup and view all the answers

What is the most prominent crowdfunding platform mentioned?

Kickstarter Signup and view all the answers

What percentage of projects on Kickstarter typically gets funded?

Only a minority Signup and view all the answers

What was arguably the most famous project funded on Kickstarter?

A smartwatch Signup and view all the answers

How do some companies utilize crowdfunding platforms beyond raising funds?

To advertise their new products Signup and view all the answers

What have various crowdfunding/investing platforms evolved to target?

Different types of projects Signup and view all the answers

What factor does the investor relations of a funded team involve after fundraising?

Cultivating relationships with investors Signup and view all the answers

What is the primary function of a technology platform in a digital business model?

To connect users and enable them to build and run applications Signup and view all the answers

Which of the following is NOT a category of digital business models covered in this module?

Traditional retail models Signup and view all the answers

Which characteristic is commonly associated with Kickstarter as a platform?

Long history Signup and view all the answers

How can platform models be segmented?

By the number of sides they serve Signup and view all the answers

Which aspect of platforms is emphasized in the discussion of marketplaces and crowdsourcing models?

The connectivity between users and resource allocation Signup and view all the answers

What characteristic is associated with a digital business platform?

It relies on a digital technology platform for its base. Signup and view all the answers

In terms of user groups, how are platform models typically classified?

By the number of sides they engage Signup and view all the answers

Which statement best describes the role of ecosystems in digital business models?

They are oriented towards consumer and end-user interactions. Signup and view all the answers

Which of the following is an example of a back-end/enabling model in digital business?

Cloud computing services Signup and view all the answers

What is a primary value of a one-sided platform for its users?

Access to the existing user base Signup and view all the answers

What is a challenge related to monetizing a one-sided platform?

Understanding user preferences for pricing Signup and view all the answers

If a one-sided platform charges fees from only some users, what could be a consequence?

Reduced attractiveness of the platform for all users Signup and view all the answers

How can the growth dynamics of a one-sided platform be described?

Limited by the single user group's size Signup and view all the answers

What is one economic perspective on the business model of a one-sided platform?

Simple with one user stakeholder group Signup and view all the answers

Which aspect is NOT considered a part of the value capturing model for a one-sided platform?

Flow of customer loyalty Signup and view all the answers

What does the value creation model for a one-sided platform primarily comprise?

Flow of information Signup and view all the answers

Why are one-sided platforms relatively uncommon?

Limited opportunities for profit generation Signup and view all the answers

What is LinkedIn primarily known for?

Serving as a leading social network for professional use Signup and view all the answers

What does the term 'flywheel in the middle' refer to in the context of social networks?

It represents user growth and retention driving momentum Signup and view all the answers

What can happen to social networks after experiencing exponential growth?

They may face exponential decline in popularity Signup and view all the answers

What characteristic of social networks allows them to achieve exponential growth?

Their platforms are highly scalable Signup and view all the answers

What happens to the 'flywheel' when it loses momentum?

It leads to a complete halt in user engagement Signup and view all the answers

Study Notes

Digital Business Models Overview

Module No. 1403 covers digital business models, emphasizing platform models, marketplaces, and crowdsourcing.
The module consists of several parts: introduction to business models, digital business fundamentals, core models, platform models, ecosystems, and enabling models.

Technology and Business Perspectives on Platforms

A technology platform connects users and allows them to build and run applications.
Digital business platforms require a foundational digital technology platform to operate effectively.

Platform Segmentation

Platform models categorized by the number of user groups (or sides) they serve.
Strategies for platform growth include attracting producers, utilizing "big bang adoption," and targeting micromarkets.

Monetizing Platform Models

Critical questions for monetization include:
- Who to charge (all users, part of the user base, or specific groups)?
- What to charge for (transaction fees, market access, or extended functionalities)?
Transitioning from free to paid models can be delicate and requires careful consideration.

One-Sided Platforms

One-sided platforms simplify the business model by focusing on a single stakeholder group: the users who are also customers.
Value for users comes from access to an existing user base.
Examples are essential to understand one-sided platforms' functionalities and monetization challenges.

Crowdfunding Platforms

Crowdfunding can take months for the fundraising process to complete, emphasizing the need for investor relations post-funding.
Kickstarter stands out as a major crowdfunding platform, with a significant project success history.
Notably, only a minority of projects on these platforms achieve funding.

LinkedIn serves as the leading social network for professionals globally, with extensive premium offerings.
User growth in social networks can exhibit scalability and exponential trends, described as the "flywheel effect."
Historical examples indicate that rapid growth can lead to significant declines if the momentum is lost.

Notable Statistics

Crowdfunding platforms cater to various segments, targeting different project types and user demographics.
The growth of social networks underscores the importance of maintaining user engagement to sustain momentum.

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Description

This quiz covers Chapter 4 of the Digital Business Models module, focusing on platform models, marketplaces, and crowdsourcing. It introduces key concepts and characteristics essential for understanding these business models. Expand your knowledge on value capturing and creation in the digital realm.