C OV E R S TO RY                                          Ammar YasirTen on tenTen business models that have the potential...
C O V E R S T O RYWhat makes it click                                 Local adaptationSo, if it’s free, how do you make mo...
C O V E R S T O RY                                                                    doing the same? If they are         ...
C O V E R S T O RYwe can use technology to serve social                 connect with owners who are willing to rentcauses;...
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Ten businessmodels


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Ten businessmodels

  1. 1. C OV E R S TO RY Ammar YasirTen on tenTen business models that have the potentialto create waves on the Pakistani Web It is ironic that the value of one’s which listed the top ten online business entire business – both online models. Here is an analysis of how these and offline – is determined by a models could be applied to cater to thefew numbers. These “numbers” measure local business landscape and create aimportant factors like Profit and Loss, fierce online presence.Return on Investment (ROI), Click throughRate, and followers on Facebook, Twitter 10: PatientsLikeMe.cometcetera. You could be sitting at the top of One of the few good virtues still left inthe food chain, and your new product some of us is that we want to help otherscould be the ultimate tool to completely by teaching them something we learnt fromrevolutionise the concept of, let’s say, e- our life-changing experiences.mail and messaging; but you could still PatientsLikeMe.com provides a platform forfail (remember Google Wave?). You could patients to help other patients. And, it’s afail because you were unable to emerge free service.from obscurity or because you were anot-so-known onlinere-seller, whosecompany – in spite ofhaving a great idea towork with – managedto re-sell only oneunique product a day(Woot.com). So, who isto be credited orblamed for one’ssuccess or failure insuch an unpredictablemarket? Not viralmarketing or a lavish launchparty at a five star hotel;ironically, not even your state-of-the-art product. In fact, all tacticsand strategies are futile unless youhave a decent (if not great) businessmodel. The writer came across astudy by the Board of Innovation, | 36 | february 2011 | SPIDER
  2. 2. C O V E R S T O RYWhat makes it click Local adaptationSo, if it’s free, how do you make money With no PayPal or MasterCard in the picture,from it? With the patients’ there is a huge potential for a similarpermission, PatientsLikeMe sells system in Pakistan. Since thisthe patients’ personal business model omits theexperiences and need to punch in accountinferences to third details every time youparties like want to make apharmaceutical donation – big orcompanies and small – it couldresearch-based work well for socialorganisations for causes, wherea good sum of people are toomoney. lazy or too busy to make a smallLocal donation. The localadaptation institutions, of course,Local internet need to be proactive inentrepreneurs could take incorporating the modela cue from this and create into their strategy, in order tosimilar website that also make it work.supports regional languages. Thiscould create a comfortable environment for 8: Groupon.comthe local masses – especially considering Groupon is a broker platform that usesour cultural tendencies and limitations. social media to offer exclusive deals (on the best stuff to buy, eat, watch and do in9: Flattr.com your local city). It’s a win-win situation forWe live in an age where freedom of both – the local businesses and theinformation comes with a cost. Last year, consumers.when PayPal, MasterCard and othersabandoned WikiLeaks, the Swedish What makes it clickstartup Flattr ensured that with the help of Groupon communicates a mind-blowingtheir donation system, everyone deal to a group of randomly selectedcontinued to have access to all the users via social media. If enoughgroundbreaking leaks. The result: One people go for the massive discount,WikiLeaks article led to nearly 4,000 the deal goes ahead as per plandonations. and Groupon bags 50 per cent of the revenue made from theWhat makes it click promotional campaign.How did that happen, you ask? First, thewriters add the Flattr button to their Local adaptationcontent. Readers of the content click the Judging by the rapidFlattr button if they want to make a advancement and changes in thedonation, and at the end of each month, shopping and purchasingthe writers get paid for every “Flattr”. A behaviour of Pakistan’s urbanfurther explanation is that subscribers of population, this model has aFlattr choose a minimum monthly good chance for success, ifsubscription fee every month, and the properly executed. Local businessesamount is equally distributed among all the already use e-mail and text messageswriters whose content they “Flattr-ed” over to offer deals to consumers; then whythe month. Oh, and Flattr takes just 10 per not work on a social media platformcent of the subscription fee. that facilitates it all! | 37 | february 2011 | SPIDER
  3. 3. C O V E R S T O RY doing the same? If they are compensated, all artists – big or small – will be happy to contribute to your music library 6: PayWithATweet.com Yes, that’s exactly how valuable our tweets are for businesses. Here, all kinds of consumer brands, service providers, entertainment companies etcetera, offer attractive deals just for a tweet from you. This is perhaps the best example to show how social media is almost as powerful – if not more – as mainstream media. What makes it click Pay with a Tweet, at present, is7: Spotify.com more of a marketing tool with no clearWhat is the one thing that everyone likes? business model. However, it has a greatFreebies, of course! Spotify offers 10 potential – thanks to its uniqueness.million music tracks, free of cost to itssubscribers, who can share all this music Local adaptationwith their friends via their social network. Local online entrepreneurs can learn fromThe idea is such a hit that at the last count, this and explore the numerous possibilities750,000 users were already hooked to it. behind social media. Any idea that can help brands promote their products and servicesWhat makes it click to a large audience will definitely get youThe thing that makes Spotify unique some revenue in return.compared to other online music stores isthe fact that it compensates the 5: HumbleBundle.commusicians for their creative work. The ad- Humble Bundle was experimental series ofbased revenue model helps Spotify game-bundling experiments that allowedprovide free music to its users, while gamers to buy independently developedgiving the artists their due. Users who video games that run on Windows,want full access to the music store have MacOS X, and Linux based systems.to pay a small amount for premiumservices. It’s an ad-plus-premium model; What makes it clickand a win-win-win (subscriber-artist- The website owners gave unprecedentedcompany) situation. buying power to purchasers who were free to decide what percentage of the total amount Local adaptation they wished to pay 1) the developers, 2) the We have a success story related to music charity and 3) Humble Bundle itself. Theof our own. According to the YouTube team company was able to make 1.8 million USthat visited Pakistan last year, Coke dollars at the end of its campaign.Studio’s YouTube channel was the 5th mostvisited channel in 2010. If Coke can make Local adaptation such an enormous investment in music, NGOs and charitable organisations – take what’s stopping other companies from a note. There are numerous ways in which | 38 | february 2011 | SPIDER
  4. 4. C O V E R S T O RYwe can use technology to serve social connect with owners who are willing to rentcauses; but by empowering the buyers, we out the place to you.can maximise the results. What makes it click4: In-App Sales About 12 per cent of the commission goesDo you know how the people of the out to the Web platform, depending on thesubcontinent got addicted to an English rental price. Some similar websites alsodrink called chai or tea? The legend goes charge users with posting fees.that it was first offered for free; then,people got so addicted to it that they Local adaptationcouldn’t do without it, and were willing to It’s a brilliant, economical and convenientpay for it. In-App Sales work with a similar model for Pakistan – after the securitycross-selling strategy. issues are taken care of! You can include guest houses and budget hotels in theWhat makes them click client list and take standard commission onUsers can use apps and games free of the business that comes their way.cost; but once they get addicted to it (asthey usually do), they are willing to pay for 1: Kickstarter.comthe extra credits. Reportedly 80 per cent of Kickstarter is doing a wonderful job ofrevenue comes using this business model. connecting startups with sponsors, who are willing to support them. Essentially, theyLocal adaptation give the fund-seekers and their ideas theNo rocket science here. But just be careful. promotion they need.3: Quirky.com What makes it clickImagine you have a brilliant idea that (in They follow the full-or-no-funding-at-allyour opinion) is bound to work. You pay 10 policy, especially since getting half theto 99 US dollars to Quirky.com, and submit money you need does your buddingyour idea. Once evaluated by the project no good. It also cuts down thecommunity, it goes into research and risks for the start-ups and the sponsors.design. If the pre-sales of the product hit Kickstarter takes five per centthe standard threshold, your product goes commission on the funding, and theinto production. sponsors get rewarded, depending on the amount they invested.What makes it clickThe product goes to Quirky’s e-shop where Local adaptation30 to 45 per cent of the profit goes to the Locally we have a website IdeasHutidea initiator, 30 per cent to the influencers that supports a similar concept; all itand the rest to you-know-who. needs is a business model similar to Kickstarter. This way, they will not onlyLocal adaptation be facilitating the community but alsoWhat we can learn from Quirky? 1) Interact sustain themselves.with potentially great minds to build aproduct that has great potential, and 2) Final thoughtsThere is nothing wrong in sharing profits There was a time when we used to look atwith people who generate ideas and help the dot-com models from the Silicon Valleybring the product to life. and tell ourselves that it will not work here. But with rapid transformation and adaptability2: Airbnb of businesses – big and small – the dynamicsIf you are travelling and are looking for an have changed. Now, we can look at theseinexpensive place to live for a day, week or business models, localise them as per ourmonth in a strange city, Airbnb helps you needs and launch them in the desi market. | 39 | february 2011 | SPIDER