Business Model Patterns are Business models with similar characteristics, similar arrangements of business model building blocks, or similar behaviors. They help us understand business dynamics and serve as a source of inspiration for new business models

1. BUSINESS MODEL
PATTERNS
[REF•ER•ENCES]
Business Model Generation
By Alexander Osterwalder & Yves Pigneur, 2010

2. Li Wei
Technology Commercialization Manager
Exploit Technologies Pte Ltd (ETPL)
Agency for Science, Technology and Research (A*STAR, Singapore)
Presentation by

3. “
Pattern in architecture is the
idea of capturing architectural
design ideas as archetypal and
reusable descriptions.
---- Christopher Alexander
Architect and design theorist
Emeritus professorat the University of California, Berkeley

4. BUSINESS
MODEL
PATTERNS Business models with similar characteristics,
similar arrangements of business model
building blocks, or similar behaviors
Definition

5. BUSINESS
MODEL
PATTERNS
Unbundling Business Model
Multi-sided Platforms
FREE as a Business Model
Open Business Models
The Long Tail

6. UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
3 Types of businesses
may co-exist within a
single corporation
Each type has different economic, competitive and
cultural imperatives

7. UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
Entity 1
Entity 2
Entity 3
They can be “unbundled”
into separate entities in
order to avoid conflicts or
undesirable trade-offs

8. UNBUNDLING BUSINESS MODEL
Customer Relationship businesses
Product innovation businesses
Infrastructure businesses
e.g. Unbnundling the Mobile Telco
Unbundled
Telco
Content
Provider
Equipment
Manufacturer
Equipment manufacturers,
Ericsson, runs the networks for
Mobile Telco companies
Sweden’s Tat concentrates
on creating advanced
mobile user interface
France Telecom focuses on building
customer relations after outsourcing
their operation and maintenance

9. # of Products
#ofSales
THE LONG TAIL
Top 20%
Focus on a small number
of products, each selling
in high volume Long Tail
Focus on a large number of niche products, each
selling in low volume. It can be lucrative if one can
serve this market efficiently

10. THE LONG TAIL
# of Products
#ofSales
Key Success factors of the Long Tail business:
Low inventory costs & strong platforms

11. THE LONG TAIL
Lulu.com helps niche and amateur authors
craft, print, and distribute their works
through an online marketplace
Lego introduced LEGO Factory in 2005,
which allows customers to assemble their
own LEGO kits and order them online

12. MULTI-SIDED PLATFORMS
Multi-sided platforms bring together two
or more distinct but interdependent
groups of customers

13. MULTI-SIDED PLATFORMS
Value Creation Mechanisms
Interdependency
Such Platforms are of value to one
group of customers only if the
other groups are also present
Facilitating interactions
The platform creates value by
facilitating interactions between
the different groups
Growth thru. network effect
A multi-sided platform grows in
value to the extent that it attracts
more users (Network effect)

14. MULTI-SIDED PLATFORMS
Targeted
Advertising
Free
Search
Content
Monetizing
Google offers distinct
value propositions to
three interdependent
customer segments

15. FREE AS A BUSINESS MODEL
(How) can you set it free?
At least one customer segment continuously benefits
from the free offer and they are financed by another part
of the business model or by another customer segment

16. Freemium
Free basic services
with optional
premium service
FREE AS A BUSINESS MODEL
Multi-sided
Free offer based on
multi-side platforms
(advertising-based)
Bait & hook
A free initial offer
lures customers into
repeat purchases
Three patterns that make a viable business optionFREE

17. FREE AS A BUSINESS MODEL
Multi-sided Freemium Bait & hook
A free newspaper
based in UK
An image and video
hosting website
“Razor & blades”
model’s inventor

18. OPEN BUSINESS MODELS
Create and capture value by
systematically collaborating with
outside partners

19. OPEN BUSINESS MODELS
OR
By providing external parties with ideas
or assets lying idle within the firm
Inside-out
It may happen by exploiting external
ideas and bringing them into the firm
Outside-in

20. OPEN BUSINESS MODELS
OR
”Connect and Develop” strategy
that exploits internal research
through outside partnerships
Outside-in
Inside-out
Establish Patent Pool that is open
to other researchers and facilitates
research into understudied diseases

21. The five business model patterns
help us understand business
dynamics and serve as a source of
inspiration for new business models

22. www.innodiary.org