Three business models

Absrtact: Silicon Valley now gives great attention to products, interfaces, interactions and morphological factors. The reason is that 1 of abstract requirements are not easy to view, and 2 are difficult to turn these insights into apps, websites or devices. Over the past 5-10 years, many product categories

Silicon Valley now gives great attention to products, interfaces, interactions and morphological factors. The reason is that 1 of abstract requirements are not easy to view, and 2 are difficult to turn these insights into apps, websites or devices. Over the past 5-10 years, technical components of many product categories have become increasingly commercialized. The target audience has also spread from early geek adopters to almost everyone in the world. So today's enterprises are more and more in the design and interface to compete. The best products are often elegant and beautiful with their unique aesthetics.

But it's not just tangible things that are beautiful. Those time-tested old-fashioned business models are often the most effective and the key to business. In the history of mankind, the key to these businesses has remained unchanged, but in the packaging of modern technology, the new bottle, the old wine often makes a more appealing taste.

Addiction: Stable recurrent income, low user turnover, highly viral transmission

The most typical case of this business model is drugs. The stubborn drug trade is still rampant after the anti-drug war has cost trillions of dollars and countless people have been killed. Of course it is not advocating this kind of thing, but because it reflects the most salient features of the business model: constant and steady recurrent revenue, low user churn, and built-in user-acquired viral mechanisms. As long as the "user" addiction faster than detoxification, business will continue to develop.

If you want to use the example of the technology industry analogy, the closest possible is the game (especially by ordering or micro-trading for monetization of the game). Warcraft is a subscription to the PC game, the peak period of 100 million subscribers can bring them 8.1-1.7 billion dollars of revenue. With the rise of mobile and leisure games, ordering slowly shifts to micro-trading, where players spend money to buy rewards or special abilities to improve their experience-a bit like drugs. Some players have even spent thousands of of dollars on it. Tribal wars, confectionery smash Legends (which have created a record of 2 million dollars a day at the peak) have allowed the companies behind them to achieve valuations of 1 billion to billions of dollars. Micro-trading + advertising provides a constant, steady stream of regular income, and players are fascinated and then start investing in the game, and will spread further among the players ' friends.

Pre-sale: No inventory risk/No accounts receivable

The traditional commodity business will have a large amount of daily expenses. It takes a lot of overhead to come up with a product idea and finally deliver it to the consumer. Some of the biggest risks include: 1 forecast production 2) inventories must be placed in warehouses or stores 2 manufacturers and wholesalers will have a backlog of accounts receivable.

But if the pre-sale, the above risk even if not completely evade can also effectively alleviate. Pre-sale is only recently on the Internet to become large-scale feasible, because the latter can easily organize people from different places to combine different needs. Custom T-shirt maker Teespring is an excellent example of a company that produces t-shirts that are ideal for student organizations and small clubs. Teespring knows how many T-shirts need to be printed, there is no inventory risk, and the storage cost is minimized. This model has just arisen for several years, but from the point of view of the operating rate is simply the printing machine. In addition, the domestic millet obviously also very familiar with this way.

Fair (Marketplace)

A market-maker middleman is a classic service that links buyers to sellers. Before the advent of the Internet, markets for the right people to do business were either non-existent or difficult to reach. Everyone in the vertical industry must find their own relationships and ask for introductions. In some of the more organized industries, even in the special directory to find someone.

The internet makes it possible to set up a global open market, combining discovery with matchmaking. Similar fairs have sprung up in a large number of different vertical industries, once scattered in local, temporary physical markets, where economic values have been grabbed by internet market founders. ebay has made the garage sale a big deal. The Airbnb of the sofa-surfing (couch surfing) is also an excellent example.

The exciting thing is that the same business model is now being applied to finance and lending. Borrowing is one of the oldest businesses in history, and by 21st century companies like the Lending Club were interesting. The rates levied by traditional financial institutions on borrowers (especially subprime mortgages) and the interest paid to lenders are often significantly different. Lending Club See this difference, in the middle found itself very good positioning. By getting fewer spreads and better matching lenders and lenders, they also managed to get borrowers to borrow at lower cost and to make better investments for lenders. The Lending Club avoids the default risk of charging borrowers and lenders at the same time. It's a total win solution!

These business models are nothing new, but they have been magically applied with novel techniques and novel Methods. Although these things cannot be seen or touched, they result in a system that is effective, self-sustaining and beautiful and prosperous. This is a perfect match between product aesthetics and technology and old-fashioned business models. Some people call it "software eats the World", I call it the union of Beauty.