People tend to confuse the HOW and WHAT, but although they are very different – they dance well together!
This episode is Part 2 of our discussion about the 5 W’s and an H or developing your Why, Who, What, When, Where and How. At the conclusion of this episode, it is my desire that you are able to clearly articulate your HOW.
Business/Organization Models:
OWNERS
#1 Landlord: Owns an asset and profits by charging others for the rent or lease of that asset.
- Physical Landlord: Car Rental, Auto Lease, Real Estate
- Virtual Landlord: Ad Space on Google or Facebook Ads
- IP Landlord: Disney licensing to sell their merchandise
CREATORS
#2 Inventor: Creates new or improves on products/services to be manufactured or sold in the marketplace.
- Examples would be Thomas Edison, George Washington Carver, Steve Jobs
#3 Research & Development (R&D) Shop: Systematized the process of turning ideas into inventions and is able to produce inventions on a massive scale.
- Examples would be 3M, IDEO, Pharmaceutical Companies
#4 Artist/Writer/Speaker: Different kind of creator, generally working in a solitary role to create something unique and artistically pleasing such as a book, painting, or sculpture.
- Also includes Photographers, Journalists, Bloggers, Podcasters
#5 Teacher/Trainer: Individual(s) that teaches or instructs others. The material taught can be created by the teacher/trainer or taken from other creators.
- Artists, Writers, Speakers, Photographers, Journalists, Bloggers
#6 Content Producer: Very similar to the artist, but is focused more on the production of content or material that is designed to inform or explain.
- Also includes Technical Writers, Graphic Designers, Web Copywriters, Freelancers, Speakers, Bloggers, Podcasters
#7 Thought Leader: Informed opinion leaders and the go-to people in their field of expertise. They are trusted sources who move and inspire people with innovative ideas; turn ideas into reality, and know and show how to replicate their success.
- Examples include TD Jakes, Joyce Meyers, Stephen Covey, Malcolm Gladwell, Seth Godin
BUILDERS
#8 Manufacturer: Assembles or builds products for distribution and is skilled at mass-producing on behalf of others or themselves. (Rarely invent, but produce from ideas originated by creators)
- Examples include Automobile manufacturers, Chinese manufacturers of Apple products (iPhone, iPad, etc.)
#9 Maker: Solves problems through making goods – typically handcrafted products produced on a somewhat smaller scale.
- Jewelry, handbags, clothes
#10 Engineer: Uses technical skills to build technology that solves problems and sells it.
- Example is SaaS (Software as a Service) Model: Mailchimp, Infusion Soft, Gumroad, StudiopressWHOLESALERS0
#11 Wholesaler: Able to aggregate multiple products and provide a diverse distribution infrastructure to support individual manufacturers and enable mass distribution to retailers. (They tend to be middlemen)
- Examples include Costco, Amazon FBA (Fulfillment By Amazon)
#12 Broker: Facilitates transactions between sellers and buyers, generally without ever owning what is being sold and profiting from a charge on top of the sale price.
- Physical: Real estate brokers facilitate the sale of property
- Financial: Stockbrokers facilitate the sale of stocks & bonds
- Virtual: Companies selling the use of products or services from others like Fiverr, Craigslist, Kickstarter
- Intellectual Property (IP): Companies like LinkedIn that facilitate networking opportunities
#13 Trader: Profits by buying and reselling assets, often by improving or otherwise adding value to the asset prior to sale.
- Physical: Comic book stores– Financial: Fidelity, eTrade, Goldman Sachs
- Virtual: Datalogix which aggregates and sell data
- IP: Patent trolls or domain name squatters
#14 Traditional Retailer: Profits by selling products and services directly to buyers at a mark-up from the actual cost.
- Low Cost: Operates on very low margins at the low end of the market (Kia, Hyundai, Walmart)
- Cost Plus: Sustains average margins in the mass market (Toyota, Honda, Walgreens)
- Premium: Supports exorbitant margins by maintaining the prestige value of the brand (Bentley, Rolls Royce, Christian Louboutin)
#15 Non-Traditional Retailer: Looks like a traditional retailer but goes beyond individual transactions to maximize customer lifetime value.
- Freemium: Offer something of value at no charge to encourage a later purchase like Evernote, Dropbox
- Long Tail: Profits from the use or purchase of a deep catalog of products instead of focusing on best-sellers like Amazon, Netflix
- Razors & Blades: Offers a free or low-cost razor in the hope of earning a profit on refill blades like Gillette, HP Printers
#16 All You Can Eat: Offers unlimited use of a product/service over a fixed period of time for a flat fee.
- Examples include Netflix, RedBox, Golden Coral
#17 Subscription: Offers a product or service on a continual basis for a recurring charge, generally weekly, monthly or yearly.
- Examples include Hulu, Magazines
#18 Mediapreneur: Shares useful content to keep the audience inspired and informed. Sells ads, sponsorships, affiliate programs and accepts donations.
- Examples include Bloggers, Podcasters, TV/Radio Hosts (i.e. Pat Flynn, John Dumas, Steve Harvey)0
#19 Manufacturer Direct: Allows manufacturers to circumvent wholesalers and retailers, and sell directly to buyers.
- Apple sells through retailers like Target, through its own retail stores and on its website
#20 Multi-Level Marketing: Earns profit by recruiting salespeople who pay setup fees and are encouraged to recruit additional salespeople to earn a share of a pyramid-like commission model.
- Examples include Amway, Mary Kay
DIRECTORS
#21 Non-Profit Organizations (NPO): A business organization that serves some public purpose and therefore enjoys special treatment under the law. Nonprofit corporations, contrary to their name, can make a profit but can’t be designed primarily for profit-making. Please note that NPOs need to make money to function and survive.
- Examples include Associations, Charities, Cooperatives, Faith-based Organizations, Educational, Public Services0
#22 Coaches: Inspires individuals/organizations to higher achievement by listening, asking powerful questions and allowing them to find the answers or guiding them along a path.
- Examples include Life, Health, Financial, Personal, Relationship, Business, Sports
#23 Consultants: Hired for their expertise at solving problems and providing ideas, processes, and strategies that can be monitored and quantified.
- Examples include Human Resources (HR), Strategy, Technology, Public Relations (PR), Marketing, Legal, Information Technology (IT), Social Media, Financial/Investments
#24 Government Agencies: Sometimes an appointed commission, is a permanent or semi-permanent organization in the machinery of government that is responsible for the oversight and administration of specific functions.
- Examples include Executive, Legislative and Other General Government Support; Justice, Public Order, and Safety Activities; Administration of HR Programs; Administration of Environment Quality Programs; Administration of Housing Programs, Urban Planning and Community Development; Administration of Economic Programs; Space Research & Technology; and National Security and International Affairs
- Examples will be Fannie Mae and Sallie Mae.
Sources:
- Digital Business Model Guru
- Sixteen Business Model Archetypes from Malone, Weill, et al (NOTE: No Longer Available for Download)
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