business model archetypes
Post on 21-Oct-2014
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DESCRIPTION
The Business Model Archetypes are seven fundamental business “personalities” upon which any business model can be developed. By providing the context of all available models, it becomes easier to see how businesses relate and directions in which businesses can pivot. In this article, we’ll discuss the model and the archetypes, as well as describe use patterns where the models might benefit entrepreneurs and product strategists who use the model.TRANSCRIPT
SmarterStartup.org
BUSINESS MODEL ARCHETYPES
The 7 Business Personalities
BUSINESS MODEL ARCHETYPES
What is a Business Model?
A business model describes the rationale of
how an organization creates, delivers, and
captures value … Well-known business models
can operate as "recipes" for creative managers.
BUSINESS MODEL ARCHETYPES
Business Models Everywhere!
BRICKS & CLICKS
COLLECTIVE
CUT OUT THE MIDDLE MAN
DIRECT SALES
DISTRIBUTION MODEL
VALUE ADDED RESELLER
FREE IN, FREE OUT
FREEMIUM
AUCTION / ONLINE AUCTION
ALL-IN-ONE
LOW-COST BARRIER
LOYALTY
MONOPOLISTIC
MULTI-LEVEL MARKETING
NETWORK EFFECTS
PRO OPEN SOURCE
PYRAMID SCHEME
RAZOR & BLADES
SERVITIZATION OF PRODUCTS
SUBSCRIPTION
etcetera, etcetera …
There are many disparate business models that were defined in isola8on but nothing comprehensive
that describes the fundamentally unique pa=erns in a single and concise framework that suited our needs.
Describes 7 abstract business model
archetypes (fundamental personalities)
from which every business model is
inherited. Two prototypes (applied
examples) are given for each archetype.
This represents a holistic view of the
possibilities.
BUSINESS MODEL ARCHETYPES
Business Model Archetypes
Trade
ProductService
Marketplace
Ecosystem
Subscription
Brokerage
prototypes: • e-commerce• lead generation
prototypes: • software • content
prototypes: • service platform • service agency
prototypes: • ad network • dropship program
prototypes: • content as a service • software as service
prototypes: • products market • services market
prototypes: • technology platform • media platform
Carl Jung Psychologist
BUSINESS MODEL ARCHETYPES
What is an Archetype?
A philosophical idea, referring to pure
forms which embody the fundamental
characteristics of a thing.
The concept is based on Carl Jung’s Personality Archetypes, describing fundamental
personalities and roles that we draw from to develop our own unique personality.
PRODUCT TANGIBLE SOLUTION
SERVICE CUSTOM SOLUTION
TRADE CONNECT BUYERS & SELLERS
The Business Model Archetypes framework
takes a step back from specific business
models to say there are 7 abstract archetypes
(fundamental personalities) from which every
business inherits. Two prototypes (examples)
are given for each archetype. This represents
a holistic view of the possibilities.
BUSINESS MODEL ARCHETYPES
Primary Archetypes
BUSINESS MODEL ARCHETYPES
Product Archetype
HALLMARKS OF A PRODUCT
TRADE
PRODUCT SERVICE Properties:
• Up-front Investment
• Sell for One-time Fee
• Highly Scalable
Online Prototypes: • Software Product
• Content Product
Develop a tangible good and sell on a one-time fee
basis (purchase or license). Requires high up-front sunk
capital but is able to leverage economies of scale.
BUSINESS MODEL ARCHETYPES
Service Archetype
Intangible work for a client, monetized on a per-use
basis. Low sunk costs but high float cost
requirements. Professionals or technicians with
expert knowledge and limited capital prefer it.
TRADE
SERVICE
PRODUCT HALLMARKS OF A SERVICE
Properties: • Intangible Value Creation
• Low Sunk / High Float Cost
Online Prototypes: • Service Agency
• Platform as a Service
PRODUCT
TRADE
SERVICE
BUSINESS MODEL ARCHETYPES
Trade Archetype
Connecting prospective buyers with a product they
seek, making profit on the spread between sell price
and cost of acquisition. Requires moderate capital
and good sourcing connections.
HALLMARKS OF TRADE
Properties: • Connect Buyers/Sellers
• Sourcing is key
• Profit from Arbitrage
Online Prototypes: • Ecommerce
• Lead Generation
Carl Jung Psychologist
BUSINESS MODEL ARCHETYPES
What is an Archetype?
The meeting of two personalities
(archetypes) is like the contact of
two chemical substances; if there is any
reaction, both are transformed.
MARKETPLACE TANGIBLE SOLUTION
SUBSCRIPTION CUSTOM SOLUTION
BROKERAGE CONNECT BUYERS & SELLERS
Secondary Archetypes are created by
combining the primary archetypes, similar to
how new colors are derived by combining 2or
more colors. In this way, all archetype
possibilities are accounted for, starting with a
model of three simple types of businesses.
BUSINESS MODEL ARCHETYPES
Secondary Archetypes
ECOSYSTEM CONNECT BUYERS & SELLERS
SERVICE TRADE
BUSINESS MODEL ARCHETYPES
Brokerage Archetype
BROKERAGE
Sourcing on behalf of a client for a retainer or per-transaction fee. The client then profits from any
arbitrage spread rather than the sourcing partner.
HALLMARKS OF A BROKERAGE
Properties: • Trading for Clients
• Paid by retainer not arbitrage
Prototypes: • Real Estate Broker
• Ad Network
TRADE PRODUCT
BUSINESS MODEL ARCHETYPES
Marketplace Archetype
MARKETPLACE
Create a platform that facilitates trade, rather than actually trading. This is a network effects business
that depends heavily on bringing together sufficient
demand and supply.
HALLMARKS OF A MARKETPLACE
Properties: • Network Effects
• Build Trade Platform
Online Prototypes: • Products Marketplace
• Services Marketplace
SERVICE PRODUCT
BUSINESS MODEL ARCHETYPES
Subscription Archetype
SUBSCRIPTION
Building, maintaining, and supporting ongoing use of a product, rather than a one-time sell. Customers
pay a monthly subscription service and benefit from
continued improvements.
HALLMARKS OF A SUBSCRIPTION
Properties: • Monthly Billing
• “Freemium” Pricing
• Ongoing Updates
Online Prototypes: • Software as Service
• Content as Service
SERVICE
TRADE PRODUCT
BUSINESS MODEL ARCHETYPES
Ecosystem Archetype
ECOSYSTEM A mature market leader may expand as a result of success. They develop a marketplace and/or
community for customers and/or service/support
vendors to offer augmented solutions.
HALLMARKS OF AN ECOSYSTEM
Properties: • User Community
• ISV or Dev Community
• Enhanced Product Marketplace
Online Prototypes: • Tech Platform
• Media Platform
BUSINESS MODEL ARCHETYPES
Business Model Archetypes
Trade
ProductService
Marketplace
Ecosystem
Subscription
Brokerage
prototypes: • e-commerce• lead generation
prototypes: • software • content
prototypes: • service platform • service agency
prototypes: • ad network • dropship program
prototypes: • content as a service • software as service
prototypes: • products market • services market
prototypes: • technology platform • media platform
Primary archetypes Review:
• Trade, Product, Service
Secondary archetypes Review:
• Product + Trade = Marketplace
• Service + Trade = Brokerage
• Product + Service = Subscription
• Product + Service + Trade = Ecosystem
THE SMARTER STARTUP
STRATEGY FOR STARTUPS
The Smarter Startup looks at why some
startups succeed while others fail. By taking a
more strategic approach to entrepreneurship,
founders can improve their own outcomes.
Written by Neal Cabage and Sonya Zhang, PhD,
and published by Pearsons/NewRiders.
SMARTER STARTUP
The Book
SMARTER STARTUP
Created By
NEAL CABAGE Digital Product Architect
• Product manager and entrepreneur.
• Founded ProductCamp.LA and PMA.LA.
• Built and sold two startups.
• Co-author, The Smarter Startup.
[email protected] @NealCabage
SMARTER STARTUP
SmarterStartup.org
The framework, including the part
described here, are posted on the
website, along with downloadable
worksheets and reference material.
Everything is free to use, so enjoy!.
www.SmarterStartup.org