Digital Business Tips

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Similar to the Access-Over-Ownership model, there is also an on-demand business model. In this case, it is not a physical product that you own, but a virtual product or service.

On-Demand works, for example, through online video stores where you get the right to consume video for a certain period of time (Amazon Video, Apple TV+, etc.).

We also see model-on-demand in the “gigaeconomy”. This is an example where you book a consultant and you get paid automatically based on how long you need help. (Upwork, UpCounsel, Fiverr, etc.).

E-commerce model

One of the first and by far the most successful companies to sell physical goods through an online store and e-commerce was Amazon. It is also the most famous business model on the web today, and you can buy almost anything online.

Unlike the market model, which is also Amazon today, pure e-commerce models are based on a one-sided approach to selling. The company sells its own shares to buyers.

Marketplace model (Peer-to-peer, two-way marketplace)

A two-sided market is something we see quite often on the internet. Sellers and buyers use a third party platform to trade their goods and services. This marketplace can include services (Uber, Upwork, etc.) or also products (eBay, Etsy, Amazon).

The biggest problem with this business model is its complexity and dynamics. If you don’t have sellers you will never attract buyers, if buyers don’t find sellers you will lose them. Thus, a two-sided platform must carefully scale supply and demand at the same time in order to remain attractive to both parties.

Ecosystem model

Digital ecosystems are one of the most complex yet powerful digital business models today. Ecosystem orchestras such as Amazon, Alibaba, Google, Apple, Tesla, and many others use clients with different services on different platforms. With knowledge and data, they can attract new customers through the “seller closure” effect that their ecosystem creates.

Just think about what services you use on Google, Apple, Amazon, Alibaba, etc., and how difficult it will be to leave their digital ecosystem. The anchoring effect is also an important factor for future earnings. But you don’t have to be the orchestra of the ecosystem, maybe you are a user of the ecosystem, or you are a contributor of modules to the ecosystem. A good example of a modular provider is PayPal, which provides seamless payment for many different digital business models and ecosystems.

More information: What is a digital ecosystem? — Understanding the most profitable business model

Ownership Access/Sharing Model

It’s all about “sharing,” but in a business sense. This system allows you to pay for a product, service or offer for a certain amount of time, without having real ownership rights. This could be a car rental (like Zipcar), an apartment rental (like Airbnb), or even industrial machinery.

It was one of the most disruptive business models due to its impact on ownership and the resulting income. The car could suddenly become a source of income instead of just generating expenses.

Model of experience

Adding experiences to products that would not be possible without digital technology. One example is Tesla, which has brought a whole new digital experience to the automotive industry by adding digital services and even a digital ecosystem to their vehicles, which is currently the main driver for their business model.

Another example of an experience model is also combining different experiences together and creating a new customer-centric ecosystem.

Subscription Model

We all know Netflix or Office 365. These products are good examples of the classic subscription model. There the user gets access, updates, services, etc. on a monthly/annual basis. The subscription model is especially used for content, software, and memberships.

Open source model

Firefox is one of the most successful open source examples. The software is free to download, free to use, and open to the community worldwide to contribute. Because it’s free and many people contribute, it spreads quickly and usually also gets a lot of (free) resources to improve the software. The business model behind Firefox generates royalties and partnerships with search engines.