Re: Aw: [projectvrm] The free customer and the three base business models ...

[Mary Hodder < >]

Graham,

There are 16 biz models according to the paper you provided, which I read through. While the paper is interesting, it's divisions are really more focused toward scholars of business models (ie people in business schools) and/or someone looking to get very specific with a specific business model -- though that could be a VRM company looking to turn an old model a bit. 

But the 16 may not be as helpful for us here as discussion items on this list.. either in terms of looking at the uses of personal data because very little of those models have anything to do with the use of personal data, or in terms of looking at the higher level modes of online businesses. Note that the paper includes the top 1000 businesses in their study and therefore many are not really reflective of online business -- to get their 16 business models.

For the most part, I think most online businesses could be boiled down to doing something within or to support these three models: 

1. advertising (much of the web including NYT non-sub areas, Youtube, even sponsorship programs like NPR at a high level fit this, )

  1a. selling data or metadata including personal data (Shazam and many other phone and FB apps, content providers, Axiom, Intellius)

2. subscriptions (NYT, Netflix, Pandora, even NPR but it's voluntary subscription, Hearts of Space) 

   2a. selling data or metadata including personal data back to #1

3. selling something (Amazon, Ebay, Buy.com, itunes, Eventbrite)

  3a. selling data or metadata including personal data back to #1

It would be interesting to size up these categories.. to get a sense of the size in gross and net, and to know how successful they are in their respective areas compared to other areas.

I think that might help us more in combating the appropriation of personal data in inappropriate ways. My own theory is that the selling of personal data is highly used and lucrative, but the actual ROI for the purchaser is small -- but it's all advertisers have so they go with it to get a bit of a bump. It would be interesting to try to prove that.

As for figuring out how to disrupt any of these business models with VRM models where the user is more in balance with the business.. getting specific with more granular sub-models using that style the paper uses would be helpful. I think a comparison of these 3 models, broken down into submodels, as they exist now in the world, against the ways VRM-style models could successfully shift might help us map out some specific ways that what we know now, to help VRM companies be more successful.  

For this I would use the granular business model scholar's methodology used in the paper to then unpack the 3 against VRM systems.

mary 

On Dec 16, 2013, at 3:42 AM, Graham Reginald Hill wrote:

Hi Johannes

 

There are self-evidently many more than just three types of business model. 

 

This recent article from academics at MIT Sloan Management School (also published in a shorter form in the Sloan Management Review) analysed 1,000 forms in the US and identified 16 different types of business model.

http://ccs.mit.edu/papers/pdf/wp226.pdf

 

Interestingly, the article identified that the choice of business model was one of the most important determinants of business success. The business model based on selling the rights to use assets was one of the most successful. Data, information, and actionable insights about customers and their behaviours is obviously one of those assets.

 

I will leave the philosophising about whether privacy is a right, or even a common practice, and about who owns the customer information assets to other posts.

 

Best regards from Bristl, Graham

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Dr. Graham Hill
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Gesendet: Freitag, 13. Dezember 2013 um 19:58 Uhr
Von: "Johannes Ernst" < "> >
An: "ProjectVRM list" < "> >
Betreff: [projectvrm] The free customer and the three base business models ...

Doc's talking about the "free customer" got me thinking.

There are only three base business models I can think of:

1. Compete on the merits, with negligible switching costs for the customer
2. Acquire and exploit a critical resource
3. Regulatory capture.

(For detail, I just blogged about it here: http://upon2020.com/blog/2013/12/there-are-only-three-base-business-models/ )

It seems to me that only the first of these models is compatible with the idea of a "free customer".

If I am right, this means that all of our business models are severely constrained if we pay more than lip service to VRM and related things. I don't mean "constrained" in a negative sense, but certain business models would have to be rejected out of hand for new companies. And existing companies will never "do VRM" unless they buy wholesale into my model #1.

Thoughts?

Cheers,



Johannes.