Business Strategy · Business Development

Know any other business models than these?

Dimitry Rotstein Founder at Miranor

October 17th, 2016

Years ago, when I was a beginner entrepreneur, I found it difficult to come up with business models, so I started collecting them, and all I have to do now when starting a new project is to pick the most suitable one from the list, and work it out from there.


1-tier business models (only one kind of clients):

1a: PPU (Pay-Per-Unit)
1b: PPU+repeat (units are designed to be sold on a regular basis)
1c: Subscription (monthly/annual)
1d: In-app purchases
1e: Licensing: royalties, white label, franchise
1f: Donations from clients
1g: Crowdfunding


2-tier business models (two distinct kinds of clients requiring additional development effort and two separate marketing channels):

2a: Ad platform (free users+paying advertisers): PPC, PPM, PPA
2b: Aggregate data/big-data sales (free users+paying data consumers)
2c: Marketplace (transaction fees frombuyers/sellers)
2d: Sponsors (free clients + donations from rich people, organizations, agencies)
2e: Acquisition (free users + constant fundraising and acquirers seeking)


1.5-tier business models (two kinds of clients, but not distinct enough to require double development/marketing effort):

1.5a: Degenerated marketplace (buyers and sellers are largely the same audience)
1.5b: Sponsored ads (free users + advertisers, but advertisers are supplied by existing framework e.g. Google, so no need to work hard for them)
1.5c: B2B2C (end clients + channel partners, but partners are relatively easy to find and accommodate)
1.5d: Retail (end clients + suppliers, kind of like B2B2C but from a different point)
1.5e: Enterprise (non-paying users + paying managers)
1.5f: Freemium (free users + paying premium users, but the latter are a subset of free users, easy to find and accommodate). Premium types: more features, more content, more quantities, more usage time (trial period model), premium license, added support, added tutoring.


3-tier business models (more complicated versions of the above models):

3a: Content platform (e.g. YouTube): content providers + content consumers + paying advertisers

(And so on...)

So, anything else?
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Anastasia Titova Head of Marketing at QArea, Software Development Solution and QA

October 20th, 2016

Cool list, Dimitry.

I would suggest to add 4a. Affiliation.. (still it can be used as extention in most of the described models)

We are using other differenciation of models (IT infrastructure, B2B), I'd like to highlight these ones: 
- Dedicated Team Model (Handpicked dedicated team, Right onsite-offshore mix)
- Fixed Price Model (Estimated like a time and material model, Executed like a fixed price model - best of both worlds)
- Hybrid Model (Estimated like a time and material model, Executed like a fixed price model - best of both worlds)
- Managed Services Model (Focused on value and productivity, Tailored for long-term, frequent, scheduled, or day-to-day  operations)
- Time and Material Model (Simple to understand and implement, Flexible use of resources. Close Monitoring.)
- Transaction-Based Model (Services tied to customer’s cycles of need, Output based & input based models)
- Proof of Concept Model (Perfect for new performance and automation endeavors, Win-win opportunities for Estimated processes like the Time-&-Material model, Executed like a fixed price model - best of both worlds).
The main are Dedicated Team, Time & material and Fixed cost, but these hybrid ones work good in specific cases.

Valeriia Timokhina Eastern Peak Software: Custom software development

October 17th, 2016

Really cool collection:)
I'd like to share some articles on the topic, they may be useful for somebody:

Steve Everhard All Things Startup

October 17th, 2016

A challenge on use of terms. For me tiers represent distance from the end consumer, e.g. Direct sales or 2  tier meaning through distribution or aggregation, much like your B2B2C. In most of your models you have direct access to the end user but your revenue is from providing marketing access to those users. I would regard those as channels as your marketing and sales actions are distinct to each party, rather than tiers where the message is essentially the same.


Claus Skaaning CEO, Sales on Tap, PhD

October 18th, 2016

Dimitry Rotstein Founder at Miranor

October 17th, 2016

Good point. A more common term is "1-sided" / "2-sided".

Anastasia Titova Head of Marketing at QArea, Software Development Solution and QA

October 21st, 2016

Thanks, Dimitry. 
Aha, that's right. But I'd like to highlight humanity side :) when you are building network of bloggers, you are building affiliation marketing covering all steps of inbound marketing to maximize its efficiency, and PPA is just a tool here not business model. So, it's basically considered as marketing partnership model rather than b2c one. It's just opinion looking from the another side of issue.

Dimitry Rotstein Founder at Miranor

October 19th, 2016

Excellent lists, especially the one on GitHub (https://gist.github.com/ndarville/4295324).
I've added "add-on" to my collection as a more general version of freemium.
One model I missed completely is MLM, although since it's illegal in many places I'm not sure if I should list it at all.

Dimitry Rotstein Founder at Miranor

October 20th, 2016

Thanks, Anastasia.
I added "affiliation" to my collection next to ad platform (2a). Affiliation (in the sense of getting paid for being an affiliate of someone else) is similar to PPA (pay-per-acquisition), as I understand it.

Dimitry Rotstein Founder at Miranor

October 23rd, 2016

If we're talking about a network of bloggers, then it sounds more like a marketplace, not affiliation. Anyway, the point of this list is to collect as many models and variation as possible for us to choose from. Classification is not important in this case.