Business Models

Watch

• 6 Tips on Being a Successful Entrepreneur | John Mullins | TED ↗TED
• How Do the Olympics Make Money? The Olympics Business Model, Explained | WSJ The Economics Of ↗The Wall Street Journal
• The ‘IKEA Effect:’ Behind the Company’s Unique Business Model | WSJ The Economics Of ↗The Wall Street Journal

Read

• Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers ↗This visual guide provides the essential framework for understanding, designing, and iterating business models, making complex concepts accessible.Alexander Osterwalder & Yves Pigneur
• The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail ↗Essential reading on why even well-managed companies can falter when faced with disruptive innovations, offering critical insights into business model evolution.Clayton M. Christensen
• The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses ↗A seminal work advocating for rapid experimentation and validated learning to build sustainable businesses, fundamentally shaping modern approaches to business model development.Eric Ries
• What Is Strategy?This foundational essay distinguishes true strategy from operational effectiveness, providing the bedrock for understanding how a business model achieves sustainable competitive advantage.Michael E. Porter
• Disruptive Technologies: Catching the WaveThe original articulation of disruptive innovation, this paper illuminates how established firms often miss the next big wave by focusing on existing customer needs.Clayton M. Christensen & Joseph L. Bower

Voices to follow

• Rita McGrath ↗A leading voice on strategy in volatile markets, she champions 'transient advantage' as a necessary approach for sustained competitive relevance.Professor, Columbia Business School
• Steve Blank ↗Credited with the 'Customer Development' methodology, he profoundly influenced the lean startup movement, emphasising iterative model validation.Adjunct Professor, Stanford University; Entrepreneur
• Scott Galloway ↗His incisive critiques and analyses of the business models of dominant technology firms offer a provocative lens on contemporary market dynamics.Professor of Marketing, NYU Stern School of Business

Glossary

• Business ModelA business model is like a blueprint that explains how a company plans to make money and deliver value to its customers. It shows how everything fits together, from what they offer to how they reach people and cover their costs. For example, a local bakery's business model involves baking fresh bread and cakes (value), selling them directly to customers in their shop (channels), buying ingredients and paying bakers (costs), and earning money from sales (revenue).
• ChannelsChannels are the ways a business uses to communicate with its customer segments and deliver its value proposition to them. This includes how they sell products and how they provide customer support. For example, an online store uses its website and social media as channels to reach customers, and a physical shop uses its storefront.
• Cost StructureThis outlines all the expenses a business has to pay to operate and deliver its value proposition. It includes everything from salaries and rent to materials and marketing. For example, a school's cost structure includes teacher salaries, building maintenance, textbooks, and electricity bills.
• Customer SegmentsThese are the specific groups of people or organizations that a business aims to serve. A business often divides its potential customers into different groups based on their needs, behaviors, or other traits. For example, a clothing brand might have one customer segment for teenagers who like trendy clothes and another for adults who prefer classic styles.
• Key ActivitiesThese are the most important things a business must do to make its business model successful. They are the actions required to create and deliver the value proposition, reach customers, and earn money. For example, for a smartphone company, key activities include designing new phones, manufacturing them, and marketing them to customers.
• Key PartnersThese are the network of suppliers and partners that help a business make its model work. Businesses often team up with others to get resources, share risks, or perform certain activities more effectively. For example, a restaurant might have key partners like local farmers who supply fresh vegetables or a delivery service that brings food to customers.
• Key ResourcesThese are the most important assets a business needs to make its business model work. They can be physical things like buildings, intellectual things like patents, human resources like employees, or financial resources like cash. For example, for a taxi company, key resources include cars, drivers, and a booking app.
• ProfitProfit is the money a business has left over after it has paid all its costs and expenses. It's calculated by subtracting total costs from total revenue. For example, if a lemonade stand sells lemonade for 100 rupees and spends 30 rupees on lemons, sugar, and cups, its profit is 70 rupees.
• Revenue StreamThis describes all the different ways a business makes money from its customers. It's how the company "captures value" after delivering its product or service. For example, a video game company might have revenue streams from selling games, selling in-game items, and monthly subscriptions.
• Value PropositionThis is the special promise a business makes to its customers about why they should choose its product or service over others. It explains what unique benefits or solutions the customer will get. For example, a smartphone company's value proposition might be "the easiest-to-use phone with the best camera," promising simplicity and great photos.

Threads 7

Where this connects to other fields, and why it's worth knowing.

• Religious Authority Religion

  Some religions are free to join but demand costly rituals, fasting, tithes, hours of prayer. That's basically freemium with a paywall: the price isn't money, it's effort, and it filters out half-hearted free-riders who'd water down the community. The sacrifice is a membership fee that proves you're serious.

• Infectious Disease & Pandemics Health

  A virus faces a choice just like a startup: kill fast and spread explosively (Ebola), or stay mild and hang around for a lifetime of steady spread (herpes). Go too deadly and you burn out your hosts; go too gentle and you spread slowly. It's the exact trade-off between a flashy one-time sale and a quiet subscription that keeps paying.

• Longevity & Aging Science Health

  Think of cancer as a business plan that grabs every bit of profit right now and destroys the company doing it. One cell breaks the rules to grow fast and selfishly, and in feeding itself it kills the whole body it lives in. Short-term greed, total long-term collapse, whether it's a cell or a company.

• Waste, Reuse & Material Loops Environment

  Some companies stopped selling you the product and started renting you the result: not lightbulbs but 'hours of light,' not jet engines but 'engine hours in the sky.' When you own the thing and take it back, you suddenly want it to last forever, not break. Flipping the business model like that makes durability profitable instead of the enemy.

• Genetic Engineering & CRISPR Health

  Drug companies make steady money from patients who buy medicine every month, forever. A one-time gene therapy that actually cures you breaks that whole model. Fix someone permanently and the monthly payments, and the profit, just stop.

• Vaccines Health

  A vaccine is amazing medicine: one shot and you're often protected for years. But that's terrible business, you only sell it once. So the market keeps underfunding the very things that could stop the next pandemic.

• Data Privacy Law Law

  Privacy laws keep losing, and here's why: for many companies, watching you is the whole business, your clicks and habits are the product they sell. So the urge to spy isn't a glitch to patch, it's built into how they make money.