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The Billion Business Model
 

The Billion Business Model

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How to create billionaire businesses using non conventional thinking

How to create billionaire businesses using non conventional thinking

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    The Billion Business Model The Billion Business Model Presentation Transcript

    • The Billion Business Model
    • Did you know?
      • 2004, Google got US$ 23 billion in its IPO
      • 2005, eBay Inc. acquired Skype Technologies for US$ 2.6 billion
      • 2006, Google bought Youtube for US$ 1.65 billion
      • 2007, Microsoft bought shares in Facebook for US$ 240 million (Facebook has a market value of US$ 15 billion)
      • 2008, Microsoft offered US$ 48 billion for Yahoo
      • Etc, etc, etc.
    • Did you know? In the last 10 years there were more than 1,150 web 2.0 acquisitions for around US$ 30 billion (strategy & business magazine)
    • Did you know that?
    • Can we learn something from them?
      • What can we (the mere mortals) learn from them?
      • Why are they so valuable?
      • What they have in common?
      • Are there any rules behind scenes?
      • Can I apply these rules in a new venture?
    • The answer is yes
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • Share something
    • Share something
      • Take the initiative and be altruistic
      • Share something valuable for a large group
      • The good must be a digital one
      • (if not you’ll be in bankruptcy)
      • Give it universally (do not discriminate)
      • Make it a social currency:
        • Video, music, jokes, photos, etc.
      • Democratize everything
        • The more useful your free good
        • the more audience you’ll get
      Share something
    • Share something examples
    • Google: free search engine
    • Google has around 127 million users per month
    • Skype: free calls pc to pc
    • Skype has around 10 million users per day
    • Monster: free job searching
    • Monster has around 20 million visits per month
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • Sell something
      • It is what will make you rich
      • It is the traditional packaged set of benefits
      • There must be a close relationship between the gratuitous good and the paid one (complementary goods)
      • Advertising is the universal complementary good
      • It can be physical or digital goods
      Sell something
    • Sell something The more relationship between the free good and the paid one the more probability of sales
    • Sell something examples
    • Google sells advertising Are searching and advertising good complementors?
    • Google sold US$ 16 billion past year
    • Skype sells paid calls pc to phone Are free calls and paid calls good complementors?
    • www.ipdemocracy.com Skype sold almost US$ 400 million past year
    • Monster is paid for employers Are free job searching and paid job posting good complementors?
    • Monster sold around US$ one billion past year
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • Build a community around your offering
    • Build a community around your offering
      • Community is about flow of value not necessarily money
      • Communities make more valuable your offering
      • Encourage participation, worth of mouth, and feedback
        • Use blogs, forums, reviews, ratings, etc.
      • Be tolerant with diversity (clients and non clients)
      • Create a social currency
        • Videos, pictures, music, jokes, etc
      • Make a social network
        • Include users, clients, non-clients, etc.
      • Democratize innovation
    • Build a community around your offering The bigger the community the more valuable your offering and the more the chance of sales
    • Community examples
    • IBM academic initiative This is a community of computer science professors who teach their courses using IBM’s content and products
    • Microsoft “cinco estrellas” program This is a community of programmers trained gratis by Microsoft and rewarding them with “starts” accordingly its MS products expertise
    • SAP community programs SAP encourage participation of the community using several rewarding programs
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • Build an ecosystem around your offering
    • Build an ecosystem around your offering
      • Ecosystem is about money flow
      • Allow others gain money in your website
      • Open the doors to your partners, suppliers, clients, etc.
      • Encourage the selling of complementary goods
      • Charge a commission for others’ sales or encourage cross-selling
      • Evaluate the selling of competitive goods
      • Democratize innovation
    • Build an ecosystem around your offering The bigger the ecosystem the more the opportunity of cross-selling
    • Ecosystem examples
    • Amazon
    • E-Bay
    • SAP ecosystem and partner programs
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The Billion Business Model
    • Build an infrastructure of cooperation
    • Build an infrastructure of cooperation
      • It is the web site
      • It is where everything happens
      • For giving your free good
      • For selling your paid good
      • For the community
      • For the ecosystem (the others selling their goods)
      • It is preferable owning your own website
      • It is possible to use others websites but not recommendable
    • Build an infrastructure of cooperation The better the experience in your website the more audience you get
    • Infrastructure examples
    • MySpace
    • Flickr
    • iTunes
    • Audience
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology The being-billion strategy
    • Use information technology
    • Use information technology
      • IT is the steroids of human relations
      • Use IT in creative ways
      • Prepare for the success not for failure
      • Make your website scalable
      • Hire good programmers
      • Use algorithms to create free and paid goods
      • Make your offering mobile
      • Make your website mashable
    • Use information technology The more sophisticated the technology the better the offerings
    • Use of information technology examples
    • Google maps
    • Second life
    • MyCybertwin (democratizing artificial intelligence)
    • Don’t forget to make your offering mobile Mobile users: 3+ billions Internet users: 1.4+ billion Source: ITU
    • 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 4 Build a ecosystem 5 Build an infra. of cooperation 6 Use information technology Remember
    • Common mistakes of web 2.0 entrepreneurs
      • Sharing something without selling anything
      • Selling something without sharing anything
      • Building a community without allowing the selling of related items
      • Building an ecosystem without allowing spontaneous cooperation
      • Not using Information Technology in creative ways
    • Cooperate without being a saint Compete w/o killing the competition (Branderburger & Nalebuff)
    • Final words
      • Today you can create value in a unprecedented scale
      • Money does not make happiness, but it is the consequence of creating value in great scale
      • Web 2.0 business is about create value first and extract value later
      • Cooperation in business is the science behind Web 2.0 and is still an emergent field of study. Therefore, I will appreciate feedback, examples, and counter examples
      • For more detailed methodology contact me
    • Thanks for sharing
      • Howard Rheingold and Andrea Saveri (www.cooperationcommons.com)
      • Brandenburger and Nalebuff (mayet.som.yale.edu/coopetition)
      • Don Tapscott (www.wikinomics.com)
      • www.wikimedia.org
      • www.webshotspro.com
      • finance.yahoo.com
      • www.strategy-business.com
      • www.rtpi.org.uk
      • www.communityplantshare.org
      • www.compete.com
      • www.webwombat.com.au
      • services.alphaworks.ibm.com/manyeyes
    • Marcelo Honores Economist Master in E-Busienss 15 years of experience in IT [email_address] marcelo-honores.blogspot.com Not billionaire yet Looking for partners