The document discusses business models for the hyperconnected world. It introduces concepts like microeconomics of traditional goods, shared goods, and incentives. The key lessons are that to conquer entire markets, one must share something valuable with a large group for free, and to succeed in mobile, one must incentivize customers. It also discusses theories about what types of goods to sell versus share, including public/private goods and complementary goods theories. The goal is to learn how billion-dollar companies operate and apply these rules to new ventures.

1. The Billion Business Model Course By Marcelo Honores

2. " Ignore basic economic principles at your own risk. Technology changes. Economic laws do not." Carl Shapiro and Hal R. Varian in Information Rules

6. 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)

7. Did you know that?

9. The answer is yes

10. First lesson

11. The long tail

12. The long tail US$ 3.2 billion US$ 250 billion

15. Microeconomics of traditional goods (the past) You pay and receive a good or service simultaneously Price Quantity Supply Demand P1 Q1

17. Microeconomics of traditional goods (examples) www.dell.com www.travelocity.com www. jcpenney .com

20. Microeconomics of shared goods (examples) www.wikipedia.org www.google.com www.skype.com

23. Microeconomics of incentives (examples) search.live.com/cashback www.virginmobileusa.com/stuff/sugarmama.do Incentives is a new business model. This model will be used widely in the mobile world. Free ringtones, music, videos, minutes of calling, text messaging, SMS, etc. for watching advertising www.yourexample.com

26. In the hyper-connected world free riders are welcomed!!!

32. Type of goods acording the Public and private goods theory Public goods Collective goods Non-Scarce Common goods / (Common-pool resources) Private goods Scarce Non- Controlable Controlable Type of goods

33. Private goods Public goods Collective goods Non-Scarce Common goods / (Common-pool resources) Private goods Scarce Non- Controlable Controlable Type of goods

35. Private goods (examples) www. microsoft .com www.dell.com www.travelocity.com

36. Common goods / Common-pool resources Public goods Collective goods Non-Scarce Common goods / (Common-pool resources) Private goods Scarce Non- Controlable Controlable Type of goods

38. Common goods / Common-pool resources example

39. Collective goods Public goods Collective goods Non-Scarce Common goods / (Common-pool resources) Private goods Scarce Non- Controlable Controlable Type of goods

41. Collective goods (examples) iTunes Store www.aol.com www.diamondlounge.com

42. Public goods Public goods Collective goods Non-Scarce Common goods / (Common-pool resources) Private goods Scarce Non- Controlable Controlable Type of goods

44. Public goods Examples www.facebook.com www.wikipedia.org www.google.com

46. The complementary goods theory (examples)

47. Google: free search engine

48. Google has around 127 million users per month

49. Google sells advertising Are searching and advertising good complementors?

50. Google sold US$ 16 billion past year

51. Skype: free calls pc to pc

52. Skype has around 10 million users per day

53. Skype sells paid calls pc to phone Are free calls (pc to pc) and paid calls (pc to real phones) good complementors?

54. www.ipdemocracy.com Skype sold almost US$ 400 million past year

55. Monster: free job searching

56. Monster has around 20 million visits per month

57. Monster is paid for employers Are free job searching and paid job posting good complementors?

58. Monster sold around US$ one billion past year

59. What to sell and what to share in the hyperconnected world (conclusions) Share Public good Discriminate price (part free/part paid) Commons Sell Collective Sell Private Strategy What type of good is your offfering?

62. How to create eternal loyalty through customer communities

65. How to create eternal loyalty through customer communities Average users per month - myspace.com 60 million - facebook.com 40 million - linkedin.com 7 million

66. How to create eternal loyalty through customer communities Examples IBM academic initiative MICROSOFT: Betatesting program Free training material and software for cumputer science professors The voluntary beta testing program saves Microsoft around US$ 500 million yearly in software testing

67. How to create eternal loyalty through customer communities Examples SAP encourage participation of the community using several rewarding programs

68. How to create eternal loyalty through customer communities Examples Communities in politics

71. Creating value with partners through business ecosystems

78. Creating value with partners through business ecosystems Examples www.ebay.com www.amazon.com

79. Creating value with partners through business ecosystems Examples SAP ecosystem and partner programs NTT – Docomo i-Mode ecosystem

81. Using ICT to build the Infraestructure of Cooperation

87. Using ICT to build the Infraestructure of Cooperation Examples

88. Examples of Infraestructure of Cooperation Example of application of amazon web services www.amazon.com www.liveplasma.com

89. Examples of Infraestructure of Cooperation www.myspace.com www.facebook.com

90. Examples of Infraestructure of Cooperation www.secondlife.com kuler.adobe.com

91. 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 5 Build an infra. of cooperation 4 Build an ecosystem 6 Use ICT creatively The Billion Business Model

92. Exam

94. 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 5 Build an infra. of cooperation 4 Build an ecosystem 6 Use ICT creatively The Billion Business Model Answer

96. What to sell and what to share in the hyperconnected world (conclusions) Answer Share Public good Discriminate price (part free/part paid) Commons Sell Collective Sell Private Strategy What type of good is your offfering?

98. 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 5 Build an infra. of cooperation 4 Build an ecosystem 6 Use ICT creatively The Billion Business Model Answer

100. 1 Share something 2 Sell something 3 Build a community Billion Dollar Business 5 Build an infra. of cooperation 4 Build an ecosystem 6 Use ICT creatively The Billion Business Model Answer

104. Cooperate without being a saint Compete w/o killing the competition (Branderburger & Nalebuff)

106. Still need more help?

108. Marcelo Honores Economist Master in E-Busienss 15 years of experience in IT [email_address] marcelo-honores.blogspot.com www.linkedin.com/in/mhonores Not billionaire yet Looking for partners!!!