business moddeling

Business model

Logic of how an organization creates / delivers / organizes value and generates revenue (what / who / how / profit)

Business model innovation

Change in one or more dimensions of a business model (value creation or value capture)

Value creation

Creating products / services / experiences valuable to customers

Value capture

Converting created value into revenue and profit

Revenue model

The way a company generates income (direct or indirect)

Direct payment

Consumers pay directly through tickets / subscriptions / sales

Indirect payment

Third parties pay through advertising / sponsorship / affiliate systems

Operational model

How a company operates daily and delivers value

Development model

What is required to initially build a product or service

Business plan vs business model

Plan = financial projections / Model = conceptual business logic

Market share

Percentage of units sold in a market

Profit share

Percentage of total profit within an industry

Brand equity

Added brand value enabling premium pricing

Ecosystem

Interconnected products/services reinforcing one another

Lock-in

Strategy making switching difficult for customers

Switching costs

Financial / practical / psychological costs of changing providers

Intellectual property (IP)

Intangible assets such as content / brands / rights

NIL (Name Image Likeness)

Commercial rights over a person's identity

"Nobody knows" principle

Media success is difficult to predict beforehand

Disruptive innovation

Radical innovation creating new markets or disrupting existing ones

Sustaining innovation

Incremental improvements to existing products

Low-end disruption

Starts inferior but cheaper and evolves into mainstream markets

New-market disruption

Targets new non-consumers

Innovator’s dilemma

Tension between improving current business and investing in disruption

Blue ocean

New uncontested market space

Red ocean

Competitive market with many rivals

PESTEL analysis

Analysis of political / economic / social / technological / ecological / legal factors

Business ecosystem

Network of actors including consumers / advertisers / governments / IP holders

Micro level

Analysis of company performance and finances

Meso level

Analysis of industry and competitive position

Macro level

Analysis of broader economic context such as inflation and purchasing power

Rule of law

Legal stability supporting business activity

Direct subsidies

Government funding support

Indirect subsidies

Fiscal advantages such as tax shelters

Hype cycle

Stages of technology development from hype to maturity

Platform economy

Platforms connect multiple user groups with low marginal costs

Marginal costs

Extra cost per additional user

Critical mass

Point where scale generates profitability

Vertical integration

Control over multiple stages of the value chain

Associational thinking

Combining ideas from different sectors

Prototyping

Testing ideas using simple versions

Pretotyping

Early validation through simulated testing

Switching cost power balance

Power determined by customer switching barriers

Parmento analysis

Framework analyzing market / competition / team / finance around a core model

Business model core

Value proposition / customers / channels / identity / revenue / costs

Image vs identity

Self-perception versus customer perception

War chest

Financial reserve for growth and strategy

Eulogy

Failure statement explaining why a business model could fail

Experience economy

Customers pay for experiences rather than products

Appropriability

Degree to which innovation can be protected

Complementary assets

Resources needed to exploit innovation

Gatekeepers

Actors controlling market access

Greenfield

Operating independently without restrictions

Idea factory

Strong idea but dependent on partners

Attacker’s advantage

Fast launch benefits when protection is weak

Reputation-based trading

Cooperation based on trust

Burning platform

Urgent need for change

Razor-and-blade model

Cheap base product with expensive consumables

Willingness to pay (WTP)

Maximum price customers are willing to pay

Value creation strategies

Increase WTP / multi-sided markets / operational excellence / creator economy

Multi-sided business model

Connects multiple customer groups

Operational excellence

Efficiency and cost optimization

Creator economy

Economy where users create content and value

Business model patterns

Standardized business models (~66 patterns)

Similarity principle

Innovation close to existing models

Confrontation principle

Radical innovation outside comfort zones

Cash machine

Payment received before production costs occur

Crowdsourcing

Outsourcing content / funding / decisions to users

Dynamic pricing

Variable prices based on demand and data

Experience selling

Creating value through emotion and experiences

Flat rate

Fixed price for unlimited usage

Freemium

Free basic service with paid premium features

Hidden revenue

Revenue generated via third parties

Leveraging customer data

Using customer data for personalization and income

Piggybacking

Leveraging existing platforms

Technological disruption

Technologies such as AI challenging business models

NFT

Unique blockchain-based digital asset

Metaverse

Virtual or hybrid environments for interaction

Generative AI

AI creating text / images / video

First-party data

Data collected directly through owned platforms

Risk register

Overview of risks including probability / impact / mitigation

Stakeholder mapping

Identification of actors and their interests

Definition of risk

Probability × impact of a negative outcome

Risk register structure

Risk / owner / probability / impact / mitigation strategy

Risk and innovation

More innovation creates more risk but potentially greater rewards

Avoided ideas

High risk with low reward

Core exam concept

Apply direct vs indirect revenue across sectors

Podcast business model

Primarily advertising-driven with subscriptions and merchandise as supplements

Gaming monetization

Mainly direct income with growing advertising importance

Gaming community

Strong social ecosystem with platforms like Discord

Creator income indirect

Advertising and brand partnerships

Creator income direct

Merchandise / affiliate marketing / events

Superfans

Highly engaged consumers with high willingness to pay

Role of AI

AI supports creation while human taste / culture / community remain critical

Media value shift

Value moves from production toward curation / identity / community

Core value formula

Value = meaning