10

Business Models
that rocked 2010
Feedback? Comments? Twitter: @nickdemey BoardofInnovation.com

Some people stumbled upon great ways to make money. During 2010 many promising concepts reached a tipping point.
Let’s take a closer look at their business models

10 different ideas to make money
27/04/10

10

PatientsLikeMe.com
Example case: “The feedback of other patients with similar conditions made 10% switch from doctor. Welcome in the information age. ”

+70,000 patients share medical records*

*xconomy.com/boston/2010/02/10/patientslikeme-growing-as-pharma-customers-boost-focus-on-patients/?single_page=true

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The Business Model behind PatientsLikeMe.com
a community platform for patients Forget privacy, people are sharing more info than ever, even medical records. By offering a free service PatientsLikeMe can attract thousands of patients.

Patient

Free community service Personal Feedback

HQ Inc

PatientsLikeMe Gathering data

Patient

Patients with similar diseases

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27/04/10

The Business Model behind PatientsLikeMe.com
a community platform for patients With permission, PatientsLikeMe gathers data that can be resold for huge sums to third parties likes pharmaceutical companies. Simple. Marvelous.

Patient

!

Free community service Personal Feedback

HQ Inc

Money

Inc

PatientsLikeMe Gathering data Resell medical data

Pharma companies

Patient

Patients with similar diseases

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27/04/10

9

Flattr.com
Example case: “When Paypal, Mastercard and others blocked Wikileaks, the Swedish Flattr donation system kept Wikileaks’ income stream afloat”

1 Wikileaks article led to +3500 donations*

*flattr.com/thing/42799/Afghanistan-War-Diary-2004-2009

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The Business Model behind Flattr.com
a service to structure donations for content Online readers consume tons of content monthly. Strong content can be ‘flattred’ via a button. (similar to ‘like’ on Facebook)

articles (content) Online content creator

HQ Inc

Reader

Flattr.com

Online content creator articles (content)

Content you've read this month

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27/04/10

The Business Model behind Flattr.com
a service to structure donations for content You decide wich fee you give monthly to Flattr.com. Every month, Flattr splits your fee evenly over all creators and takes a 10% commission.

articles (content) Online content creator

HQ Inc

!

!

!

% split equally

Reader

choose monthly subscription fee

Flattr.com

Fee minus 10% commission

Online content creator articles (content)

Content you've read this month

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27/04/10

8

Groupon.com
Example case: “Exclusive deals limited in time made Groupon the fastest growing company ever, leading to hundreds of copy-cats world wide.”

GAP made $11,000,000 within 1 day

*revenews.com/barrysilverstein/will-success-for-the-gap-secure-groupons-first-mover-advantage/

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The Business Model behind Groupon.com
a broker platform with exclusive discounts Groupon uses a no cure no pay strategy. They guarantee that a minimum number of clients will take the discount that is communicated.

HQ Inc

Inc

Groupon.com Guaranteed number of clients

Company

Buyer Massive discounts 1 deal, 1 city, 1 day

Buyer

Crowd of buyers

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27/04/10

The Business Model behind Groupon.com
a broker platform with exclusive discounts Next, when enough people take the massive discount, the deals goes on. Groupon takes 50% of the revenue resulting from this promotion.

!

HQ Inc

50% of revenue

Inc

Groupon.com Guaranteed number of clients

Company

!

Product

Significantly Less Mone

Buyer Massive discounts 1 deal, 1 city, 1 day

Buyer

Crowd of buyers

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27/04/10

7

Spotify.com
Example case: “In August SONY BMG Sweden confirmed they already made more money out of Spotify music service than iTunes.”

750K paid subscribers are already hooked*

*techdigest.tv/2010/12/spotify_pass_75.html

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The Business Model behind Spotify.com
an adbased freemium model The basic music streaming service is offered for free to music fans. Advertisers pay to cover the costs.

!

Money

Inc

Advertiser Exposure to music fans
HQ Inc

Spotify Free music service

Music fan

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27/04/10

The Business Model behind Spotify.com
an adbased freemium model A small percentage does already pay for a premium service. The 2011 US launch must be the most anticipated music service launch ever.

!

Money

Inc

Advertiser Exposure to music fans
HQ Inc

Spotify Free music service

Music fan

!

Monthly subscription €9,99

Music fan Ad-free Premium music service

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27/04/10

6

PayWithaTweet.com
Example case: “Paying with the value of your social network was never more easy. Expect more concepts like this in 2011. (e.g. SocialWhispers.com,...)”

+300,000 people paid already with a tweet*

*vator.tv/news/2010-10-11-pay-with-a-tweet-a-new-kind-of-marketing

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The Business Model behind PayWithaTweet
pay with the value of your social network More a marketing tool than a business model but remarkable enough to mention. Instead of paying with cash, users buy products with exposure.

HQ Inc

Digital product

Pay with a Tweet/post

Paywithatweet

Online shopper

Twitter users

Facebook friend

Social network

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27/04/10

The Business Model behind PayWithaTweet
pay with the value of your social network Hopefully boosting the viral effect what would result in a better reputation for the initiator. The latter could use this to sell more products later on.

HQ Inc

Digital product

Pay with a Tweet/post

Paywithatweet

Online shopper

1
reputation

Twitter users

Pay with a Tweet/post

Digital product

Facebook friend

Social network

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27/04/10

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5

HumbleBundle.com
Example case: “Buying indie games and supporting charity is an attractive formula. Being open and transparant helped this pay-what-you-want concept.”

$1,824,408 was raised within 1 week

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The Business Model behind HumbleBundle
a succesful pay-whay-you-want formula You decide how much you pay. Information of previous buyers (How much do other Mac users pay?) set anchor prices to encourage payments.

!

HQ Inc

Set your own price

Humble Bundle Digital games

Gamer

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27/04/10

The Business Model behind HumbleBundle
a succesful pay-whay-you-want formula To boost sales Humble Bundle gives buyers control on how the money is divided over themselves, charity and other organizations.

!

HQ Inc

Set your own price

!

Humble Bundle Digital games

Gamer

Set % commission

!

Set % donation

!
Inc

Set % donation

Charity

EFF

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27/04/10

4

Free with in-app sales
Example case: “The sales of virtual goods has flourished in 2010 and even outperformed mobile ads. 6/10 top grossing iPhone apps can be bought for free.”

80% of revenue comes from in-app sales*

*readwriteweb.com/mobile/2010/10/in-app-purchases-generate-more-revenue-than-ads.php

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The Business Model behind In-App sales
cross-selling strategy By offering the game (or application) for free they try to get you in. If the experience is addictive, users are willing to pay for extras.

Free mobile game

Addictive Experience
HQ Inc

Mobile Game

Mobile Gamer

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27/04/10

The Business Model behind In-App sales
cross-selling strategy Often an intermediate credit system is used to loose the real-world value perception of the virtual goods that can be bought with it.

Free mobile game

Addictive Experience
HQ Inc

Credits

!

Mobile Game Money

Mobile Gamer

Digital upgrades & virtual goods

Some credits

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27/04/10

3

Quirky.com
Example case: “Quirky raised the bar for co-creation platforms by paying out influencers. Every week 2 new products are being launched.”

+500 people co-designed 1 new iPad stand*

*quirky.com/products/30-Cloak-iPad-Case

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27/04/10

The Business Model behind Quirky.com
a co-creation platform + e-shop Inventors pay $99 to submit their idea to this co-creation platform. After selection a community of designers will co-design and improve this product.
!

Product idea

$99

Exposure
HQ Inc

Product idea initiator Co-design product

Quirky.com

Product Designer

Inc

Design company

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Community

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27/04/10

The Business Model behind Quirky.com
a co-creation platform + e-shop Suppliers will set a minimum amount on the pre-sales. If enough people buy this product, it will be go into production.
!

Product idea

$99

Supplier production only starts when enough pre-sales Exposure
HQ Inc

Product idea initiator Co-design product

Quirky.com

!

Money Product Designer

New product

Inc

Product Buyer Design company

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Community

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27/04/10

The Business Model behind Quirky.com
a co-creation platform + e-shop Revenues from the e-shop are shared with the community. 30% of profit goes to the initiator. 30% will be proportionally divided amongst the influencers.
!

Product idea

$99

Supplier production only starts when enough pre-sales Exposure
!

HQ Inc

30% of profit Product idea initiator Co-design product

Quirky.com

!

Money Product Designer
!

New product

part of 30% profit based on contribution
Inc

!

Product Buyer

Design company

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Community

part of 30% profit based on contribution

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27/04/10

2

Airbnb.com
Example case: “In times when more people discover the joy of sharing Airbnb.com, swap.com and others found ways to make some cash on this movement.”

+700,000 nights are already booked*

27/04/10

*airbnb.com/home/press

2

Clickworker.com
Example case: “Just like Amazon Mechanical Turk, people world wide are performing micro-tasks gaining micro-payments. ”

+300.000 people paid already with a tweet*

27/04/10

The Business Model behind AirBnb.com
a one-sided matchmaking platform With this bottom-up P2P model AirBnb connects normal people so they can rent out spare rooms to eachother. A professional service democratised.

Matchmaking service

Visitor

HQ Inc

AirBnb

Room for Rent

Matchmaking service

Renter

Community

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27/04/10

The Business Model behind AirBnb.com
a one-sided matchmaking platform Depending on the rental price AirBnb takes a commission up to 12%. Other platforms use posting fees when people just swap goods or services.

Matchmaking service

Visitor

HQ Inc

!

AirBnb

Room for Rent

Money

Matchmaking service

!

Renter

6%-12% commission

Community

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27/04/10

1

Kickstarter.com
Example case: “Looking for $15,000 funding? Scott Wilson convinced 13,512 people to pledge money to develop an iPod Nano Watch.”

$941,718 was funded within 30 days

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The Business Model behind Kickstarter.com
a marketplace for fund seekers First step, give Fund Seekers some exposure so they can connect with a crowd of ‘backers’ who are willing to pledge some money for their ideas.

Exposure

HQ Inc

Exposure

Fund seeker

Kickstarter.com

Community member

Community member

Crowd of backers

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27/04/10

The Business Model behind Kickstarter.com
a marketplace for fund seekers Next, people who gave funding to a project idea are being rewarded (small or large) depending on the amount they pledged.
!

Large Micro-funding
!

Small Micro-funding

Exposure

HQ Inc

Exposure

Fund seeker

Kickstarter.com

Community member

Community member

Crowd of backers

Small reward

Large Reward

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27/04/10

The Business Model behind Kickstarter.com
a marketplace for fund seekers Kickstarter takes 5% of the funding as a commission.

!

Large Micro-funding
!

Small Micro-funding

Exposure

HQ Inc

Exposure

!

Fund seeker 5% commission

Kickstarter.com

Community member

Community member

Crowd of backers

Small reward

Large Reward

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27/04/10

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