Have you ever wondered what the twentieth century will look like? A middle-aged person who has heard of Facebook, Twitter or Google ideas? You would probably come up and ask, “Gentlemen, how are you going to make money from all this?” And that would be a very precise question. The same Facebook has been looking for an answer to it for a long time. He finally found it by creating his own business model. But how do business models emerge and change? There are such businesses that provide free domain and hosting for 1 year and still are able to make a living out of it. What is new and exciting that emerges in this area?
How do new models emerge?
In order to understand what factors determine the emergence of new business models, it is necessary to define what a business model is. Alexander Osterwalder’s definition is most often found and quoted. According to him, the business model streamlines how a business creates, delivers, and finds value.
The word 'rationalize' is very important here. Improving a process or the relationship between processes in a company defines the emergence of a new model. And those processes and relationships between them can be diverse: customer segments, value proposition, sales channels, resource allocation, cost structure, and so on. In other words, a new business model can be born when one of these components is replaced or improved.
"The emergence of new business models is largely determined by us, the consumers, and our changing habits, relationships, the generation to which we belong."
Innovations in this area are brought about both by new technologies that perform the function of middle-man or security and trust and by changes in society. The emergence of new business models is largely determined by us, the consumers, and our changing habits, interpersonal relationships, and the generation to which we belong.
Today, the world's largest workforce is the millennial generation - people born between 1977 and 1995. Their behavior is very different from previous generations. If, for example, the baby boomers watch 5-6 hours of TV a day, the millennium generation does not spend all its time on it or, if necessary, watch all the necessary videos online.
So even the same action is noticeably different. A different millennium generation of trust and new technologies. They no longer have to step through themselves to trust the execution of orders online or the entry of credit card data.
Ongoing and future changes
According to the interlocutor, the roots of the new business model being developed date back to the Middle Ages. As early as the 15th century. In the middle of the 19th century, Johannes Gutenberg renewed an already existing business model - his printing press was an improvement and new application of existing tools. He provided free domain and hosting for 1 year and managed to attract new customers just like that.
In modern business models, we see the same thing - existing processes and relationships are streamlined, accelerated, and improved. The best examples of recent years are Airbnb, Uber, Spotify, AppStore, Skype, Netflix. All of these companies did not invent something revolutionary but offered the opportunity to convey value to the consumer in a different way than usual.
In this case, what is the relationship between the old and the newly emerging model?
It happens that you become hostile friends. In such cases, competition is transferred to the search for common markets, the desire to partner. For example, Hostens, although not using the bank's international money transfer infrastructure, still partners with banks at the local country level. And banks like it because Hostens still allows cash flows through them. The case of Skype and similar communication services is similar. He competes with hosting companies, but they are satisfied because Skype significantly increases the amount of data consumed.
On closer inspection, you can already see areas that will soon bring new business models to the business world. The most interesting is the nascent business models that are creating a new industry (Internet of Things, artificial intelligence). A great example of IBM Watson is cognitive computing systems that understand human natural language. These systems are not programmed, they learn themselves.
The Watson business model is based on the fact that the value created only increases over time, and there is a lot to be paid for adopting such a solution by recognizing cancer in medicine or helping to plan urban infrastructure. The possibilities for its use are huge. Many new models, I think, will be seen in the expansion and improvement of the Internet of Things, when we understand where the greatest added value lies, find solutions on how best to streamline and improve processes and make money from it. As soon as it happens, there will be a big breakthrough.
A balance is needed between innovation and proven laws
Professionals admit that it is impossible to predict with complete certainty which business model will be the most efficient. But there are some guidelines. It is very important to delve into the client's environment and desires. It is no coincidence that Steve Jobs paid much attention to anthropological issues - patterns of human behavior. It helps predict how people will react to one thing or another.
Another important thing is to understand where a business can work wonders. When you refine the only thing that gives you the biggest competitive advantage, investors and consumers will also enjoy the product or service you create.
It is the interlocutor who would like to wish startups, who are developing their business models, a greater insight into the perspective of customers.
In the end
We are eager for knowledge, so we can really streamline processes very successfully. We usually do this with a little copying, but I don’t see anything wrong or reprehensible here. If you can take any process but make it better, that’s welcome.
However, I miss a deeper look at the problem at hand from the client’s perspective. We need to delve into and answer questions about what kind of work the consumer will be able to do with your product, how we get into the consumer routine, what kind of relationship customers want us to build with them, what value the customer is really willing to pay for. It will not be easy, but similar questions, interest in global trends, development of prototypes and receiving feedback about them help to find the model that would be doomed to success. One of the great examples of the new business model is hostens.com, feel free to check them out for free domain and hosting for 1 year.
