Exponential Business Models-Nwpxx3

Exponential
Business
Models
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SUPER GUIDE:
Exponential
Business
Models
BY DANIEL PEREIRA

© THE BUSINESS MODEL ANALYST
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analyzing business model types, patterns, and innovations
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Daniel Pereira
The Business Model
Analyst Ottawa, ON,
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businessmodelanalyst.com

Copyright © 2022 Daniel Pereira
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ISBN: 978-1-998007-01-1

TABLE OF CONTENTS
Introduction 9
What Is A Business Model? 12
What Is An Exponential Business Model? 16
Exponential Growth 18
Difference Between Linear Business Model And
Exponential Business Model 22
Why Is This Shift Happening? 29
Elements Of Exponential Business Model 31
Market Potential 31
Customer Value Created 32
Customer Acquisition 32
Customer Lifetime Value 33
Economies Of Scale 34
The Nine Design Principles For Exponential
Transformation 35
Customer Segments: Solve A Problem For The Masses 36
Value Proposition: Information-Based Services And
Platforms 36
Relationships: Build A Community Of Fans 37
Channels: Multi-Modal And Social 38
Key Activities: Automated And Scalable Processes 38
Key Activities: Lean Approach 39
Key Activities, Resources, And Partners: Algorithm To
The Core 40
Key Resources: Networked Culture 40
Partners: Build Uncommon Relationships 41
Different Exponential Business Model 42

Network Effects 42
Example Of Network Effects 44
Social Media 44
E-Commerce 45
Recruiting 45
Ride-Sharing 45
Delivery Service 45
Freelance 45
User Reviews 45
Platform-Based Business Models 46
Examples Of Platform Businesses 48
Amazon 48
Tiktok 48
Apple 48
Fiverr 48
Instacart 48
Github 49
Justpark 49
Zipcar 49
Utest 49
Wax Marketplace 49
Subscription Models 49
Examples Of Subscription Businesses 52
Netflix 52
Apple One 52
Amazon Prime 53
Google 53
Scribd 53
Hellofresh 53
Porsche Drive 53

Falck 54
Freemium Models 54
Freemium Model Examples 55
Spotify 56
Dropbox 56
Linkedin 57
Chartexpo 57
Ppc Signal 57
Automation-Based Business Models 58
Atm Business 58
Website 58
Ecosystem-Based Business Models 59
Examples Of Ecosystem-Based Business Models 60
Apple's Ecosystem 60
Amazon's Ecosystem 63
Google's Ecosystem 64
Microsoft's Ecosystem 65
Example Of Exponential Business Model 71
Airbnb 71
Uber 72
Paypal 73
Etsy 74
Squarespace 75
Netflix 75
Amazon 76
Spotify 77
Steps To Design An Exponential Business Model 79
Start Fresh 80
Define Your Mtp 81
Find A Global Problem And A Scalable Solution 81

Define Your Exo Canvas 83
Define Your Bmc Based On The Exo Canvas 83
Define The Customer Segment And The Value
Proposition Blocks In The Bmc 84
Check The Staff On Demand 84
Check The Community & Crowd 85
Check The Algorithms 85
Check The Leveraged Assets 85
Check The Engagement 85
Finish The Exponential Business Model 85
Exponential Business Growth And The Flywheel 86
Conclusion 88
References 89
About The Author 93

INTRODUCTION
Marketing is more vital than it has ever been in today's
fast-paced and continuously changing digital landscape. This
is because there are more and more businesses competing
for the attention of customers in an increasingly crowded
market, and there has never been a time when it has been
more important to stand out and make an impression. Yet,
because there are so many choices accessible, it can be
challenging to determine which strategy to use to obtain the
outcomes that are sought.
In recent years, there have been a lot of new ways for

businesses to reach their target customers quickly and
effectively. One such marketing method, known as
"exponential marketing," has attracted a great deal of interest
and attention.
This is because this strategy is predicated on the notion that

a business's reach and effect can expand at a rate that is
proportional to the amount of effort that is expended to make
incremental improvements. As such, exponential marketing is
a method that can assist firms in achieving considerable
development and success. However, this method relies
heavily on the use of various creative methods, as well as
data and technology.
At its most fundamental level, exponential marketing is

focused on accomplishing more with fewer resources. This is
because exponential marketing emphasizes a planned and
inventive approach to marketing that is both cost-effective
and has a significant impact, as opposed to relying on
conventional advertising approaches, which can be
expensive and may not achieve the outcomes that are

intended.
Using data-driven insights is one of the most crucial tenets of

the exponential marketing methodology. This is because
businesses are able to get significant insights into the
requirements, tastes, and behaviors of their target audience
by evaluating the data they collect from consumers.
This information may then be utilized to modify marketing

efforts to better fit the requirements and preferences of
consumers, which will ultimately lead to improved
engagement, higher brand loyalty, and increased sales.
The utilization of various forms of technology is another

crucial component of exponential marketing, as businesses
now have access to a level of reach and visibility that has
never been seen before as a direct result of the rise of social
media platforms, mobile devices, and other digital platforms.
Because of this, businesses have the potential to experience
exponential growth and success if they utilize technology to
engage customers in novel and inventive ways and reach out
to them wherever they may be.
However, technology and data are not the only components

of exponential marketing. As In addition, it requires a creative
and strategic approach to marketing that is not only
innovative but also has a significant impact. Because of this,
businesses can leave a lasting impression on customers and
encourage long-term brand loyalty if they create unique,
interesting, and creative campaigns to catch customers'
attention and imagination.
In this article, we will discuss the fundamentals of exponential

marketing, including its underlying ideas and approaches, as
well as the possible benefits that this type of marketing may
have for firms.

In addition to this, we will go through some real-world
instances of businesses that have effectively utilized
exponential marketing and seen excellent outcomes as a
consequence of their efforts.
This article will help you learn more about exponential

marketing, whether you are a marketer who wants to improve
your skills or a business owner who wants to make their
brand more well-known and effective.

WHAT IS A BUSINESS
MODEL?
Before we dive into the concept of exponential business

models, it is important to understand the concept of business
models, how they work, and their importance.
An enterprise's level of success is directly correlated to the

strength of its business model, which, for many, can be a
sophisticated and confusing construct. This is because, in
addition to acting as an essential method for judging
businesses and comprehending the opportunities that lie
ahead for them, it is also a potent and fascinating tool that
can entice financial backing, recruit skilled workers, and
motivate employees. As such, companies can only hope to
achieve greatness in the ever-shifting and baffling world of
business if they can master the important and intricate nature
of the business model.
A business model is a complicated and multi-faceted

structure that acts as the basis for any business that is
successful. It is essentially a complicated and interwoven
system that is made up of important and delicate
components, which all need to be masterfully woven together
to provide a plan that is consistent and effective.
Among these components is the value proposition, which

happens to be at the center of any business model. This
value proposition is the core offering of the company and
defines the business's distinct value proposition in
comparison to that of its competitors. As such, in order for

this proposition to be successful, it needs to be well planned
out and delivered in a manner that captivates and excites the
audience that it is intended for.
Another essential but difficult-to-pin-down aspect of a

business strategy is its target demographic of customers. This
subset of individuals exemplifies the particular customers that
the company intends to attract with the goods or services that
it offers. In order for businesses to successfully captivate and
enchant this important group of clients, they need to
implement a variety of decisive and crucial marketing
methods that speak to the customers' most fundamental
wants and requirements. These marketing methods are
usually contained within a business model.
Another aspect of a proper business model is revenue

streams, as this is the lifeblood of any business. These
sources may include a wide range of options, such as loans,
the sale of products or services, subscription fees that give
access to exclusive content, licensing fees that give access to
specific technologies, and advertising revenue from
marketing a product to a target customer base.
However, regardless of the source, a proper business model

is required to decisively and properly cover the how, what,
where, and when of the revenue stream for the business.
Another important aspect of a proper business plan is the

cost structure, which is an intricate and specific design that
outlines all the costs that are associated with running the firm.
This includes a wide range of costs, some of which are fixed,

like rent and salary, and some of which aren't, like materials
and marketing costs. The capacity to successfully apply this
knowledge is what differentiates successful and thriving
enterprises from those that have failed and are now in a state
of abject poverty and bankruptcy.

In order for a company to provide its goods or services, it is
necessary for that company to carry out a number of
important processes known as "key activities." These
procedures can only be carried out by those who have been
educated about the inner workings of the company to which
they belong. This process should also be well documented
within a business model, as it serves as a blueprint for the
inner workings of the business and how the day-to-day
activities of the business are addressed and run.
A business model should also document and plan out the

crucial partnerships and relationships that a company
develops with other businesses or groups to assist it in
achieving its objectives. These partnerships can be either
public or private.
For a business to successfully deliver its goods or services, it

needs to have access to a number of important resources.
These include important information, skilled employees who
have been brought into the business, and a wide range of
other assets. This also must be considered in order to create
a proper business model.
A good business model can be a powerful and effective tool

that can attract investors and top-tier talent, as well as
motivate management and staff to do great things. As such,
companies will wither away into obscurity and fall short of
realizing their full potential if they do not have a healthy and
efficient business model.
A business model is also an important part of how investors

evaluate companies, since people who want to start or invest
in a business need to be able to understand the business
model in order to understand the organization's future
prospects and trajectory.
However, a business model is not set in stone, as it is also

necessary for them to be regularly updated and modified in
order to anticipate the ever-changing trends and problems
presented by an industry that is constantly shifting.
In the face of these hurdles, the only businesses that will be

able to successfully adapt and flourish are those that are in
possession of an effective business model that is tailored to
the nature of the market.
So essentially, a business model is a construct that is both

complicated and crucial, as it is necessary for the success of
every business. It reflects a wide variety of crucial elements
that have to be skillfully woven together in order to produce
an efficient approach to the intended market. As such,
companies can only achieve sustained success in the long
run by subscribing to an efficient business model that is
tailor-made to keep up with the trends and opportunities of
the market.

WHAT IS AN EXPONENTIAL
BUSINESS MODEL?
In recent years, there has been a shift in the way that

organizations function, with many adopting an exponential
business model. This change came about as a result of the
exponential growth of the internet, its facilities, and its quick
and easy access to information and resources. Due to this
access to resources, this model's capacity to promote quick
growth and create significant value for both firms and
consumers has contributed to its rise in popularity in recent
years.
But what exactly does it mean for a company's business

model to be exponential, and how does it function?
An exponential business model is simply one that leverages

technology and innovation to scale a business quickly and
efficiently. When compared to more conventional business
models, it is distinguished by the fact that it is primarily
focused on the generation and acquisition of value through
the application of various types of technology, including
networks and platforms.
The use of automation, data analysis, and various types of

machine learning algorithms are typical components of
exponential business models, which are intended to facilitate
the rapid expansion of the business.
It is important to note that the capability to generate network

effects is one of the most important aspects of a company

model that scales exponentially. These effects happen when
the value of a product or service improves as more people
use it, which happens when more people use the product or
service. For instance, social media platforms such as
Facebook and Twitter have a network effect, since their value
increases proportionately with the number of people who use
them. The value of these platforms improves as more people
sign up for them because it gives users an additional
opportunity to engage with and communicate with other
people on the platform.
As such, the capability to exploit data is yet another essential

component of an exponential business strategy. This is
because data is an extremely important resource, and
exponential organizations make use of it to enhance the
quality of their products, services, and corporate operations.
For instance, the e-commerce giant Amazon uses data to
optimize its supply chain operations and provide more
personalized suggestions to its customers. And by doing so,
the company is able to create a more streamlined and
effective shopping experience for its customers by utilizing
data, which, in turn, drives growth and improves income.
In addition to concentrating on the production of products

and services, exponential enterprises are also concerned
with the development of various platforms. These platforms
are essentially ecosystems that facilitate the value-creation
process by bringing together various stakeholders, such as
customers, suppliers, and partners.
These ecosystems are capable of quick scaling and

self-sufficiency even as they attract an increasing number of
consumers and players. For instance, Airbnb is a web-based
service that brings together guests and homeowners in order
to mutually benefit from the relationship. The increased
participation of homeowners and guests on Airbnb results in
increased value for the platform, which in turn generates a

network effect that fuels expansion.
Hence, the capability of an exponential business model to

develop new markets while simultaneously disrupting old
ones is among the most significant advantages it offers. As
exponential, enterprises are able to produce goods and
services that are less expensive, more quickly produced, and
more efficient than their traditional counterparts through the
use of effective technology and innovation,
This causes disruption in already established markets and

opens up new prospects for expansion. An example of a
company that benefited from this type of business model was
Uber, which revolutionized the taxi business by developing a
ride-sharing service that was both more efficient and less
expensive.
So at its core, the exponential business model is a new way

of thinking about business that makes use of technology,
networks, and platforms in order to produce and acquire
value.
Hence, creating network effects, using data, and constructing

platforms are the primary focuses of this model, with the end
goal of driving rapid development and disrupting current
businesses. And it is expected that as technology keeps
improving, it is likely that more and more businesses will start
using an exponential business model to create new
opportunities and boost growth in the digital age.
Exponential Growth
Now that you have a basic grasp on the concept of an
exponential business model, it is also important to
understand what exponential growth is, how it ties into the
exponential business model, and how businesses stand to

gain from this relationship. This is because having an
understanding of a company's or business's growth rate is
crucial, as business analysts utilize various concepts to
monitor an organization's growth rate, and familiarizing
yourself with exponential growth can enhance your
comprehension of how growth operates in diverse
professional environments.
So what is exponential growth?
Exponential growth is a type of growth that occurs when a

quantity increases rapidly over time. This happens when the
rate at which the quantity increases is directly proportional to
the quantity itself. In mathematical terms, an exponentially
growing quantity can be represented by an exponential
function, where the exponent is the time variable. This means
that as time goes on, the quantity grows at an increasingly
faster rate.
There are three formulas that can be used to calculate

exponential growth in different scenarios:
● Formula 1: f(x) = abx
● Formula 2: f(x) = a (1 + r)x
● Formula 3: P = P0 ek t
In these formulas, the initial value is represented by a or P0,

the rate of growth is represented by r, the constant of
proportionality is represented by k, and time is represented
by x or t. The unit of time users use can vary depending on
the problem, but it should be consistent throughout the
calculation.
Each formula can be used to calculate exponential growth in

different situations. For example, Formula 1 is commonly used
to calculate compound interest. In contrast, Formula 2 is often

used to calculate the growth of populations or investments,
and Formula 3 is frequently used in finance to calculate the
growth of investments that earn continuous interest.
Understanding these formulas is important for analyzing and

predicting growth in various fields, including finance, biology,
and economics. By using these formulas, we can make
informed decisions and plan for the future based on expected
growth rates.
On the other hand, though, if the proportionality constant is

negative, the quantity will decline over time and decay
exponentially. This means that as time goes on, the quantity
will decrease at an increasingly faster rate.
Overall, understanding how exponential growth works can

help us predict and model changes in quantities over time,
which is crucial for making informed decisions and planning
for the future.
So how are exponential growth and exponential business

models connected?
Well, exponential growth and exponential business models

are similar in that they both involve a fast, and often
exponential, rise in a certain number. However, while
exponential growth refers to the rate of increase of a
particular quantity over time, an exponential business model
is a specific approach to building and growing a business.
In order to achieve exponential growth, businesses that

adopt an exponential business model typically focus on
leveraging technology to automate processes, streamline
operations, and increase efficiency. They also prioritize
innovation, experimentation, and rapid iteration, enabling
them to quickly test and scale new ideas and products. This
approach often requires a willingness to take risks and make

bold decisions, as well as the ability to adapt and pivot in
response to changing market conditions.
Essentially, by embracing innovation, experimentation, and a

willingness to take risks, businesses can leverage
exponential growth to gain a competitive edge and position
themselves for success in the future. So in layman's terms,
the successful adaptation of exponential business leads to
exponential growth for the business.
So how does this relationship benefit businesses?
Well, this relationship between exponential growth and an

exponential business model allows for the adoption of an
exponential business model to enable businesses to achieve
rapid growth, improve efficiency, gain a competitive
advantage, and offer better customer experiences.
However, it's important to note that this approach can also be

risky, as it requires a willingness to make bold decisions and
significant investments in technology and innovation. Hence,
businesses that are successful with this approach tend to
have a strong culture of experimentation, a willingness to fail
fast and learn from mistakes, and a focus on continuously
improving and iterating their products and services.

DIFFERENCE BETWEEN
LINEAR BUSINESS MODEL
AND EXPONENTIAL
BUSINESS MODEL
The debate between the linear business model and the

exponential business model has been going on for quite
some time, with some going as far back as the early days of
the internet. This, however, is because both models are
effective and can be applied to any business, especially
e-commerce. However, although the two models are
extremely effective, they are also stark opposites of each
other, and as such, the debate has raged on about which is
the actual best business model.
But before you can be introduced to this debate, you must

first learn what a linear business model is.
The linear growth model, also known as the "pipe model," is a

more gradual approach to business growth that is popular
among many businesses, especially eCommerce owners.
This model is easy to understand and implement, making it a
popular choice for businesses that are just starting out.
Under the linear growth model, a business can invest in

materials to make a product, which is then sold in a single
location, usually in the business's home country. For example,
if you own a liquor brand in the U.S., you might use grain and
water to create whiskey and sell it online, within the U.S.
As such, the focus of this model is on scaling one customer at

a time, without necessarily engaging in additional sales
pitches to existing customers or persistent remarketing
efforts. The goal is essentially to steadily increase profits or
reduce costs by 10% over time. Or, in layman’s terms, slow
and steady wins the race.
Although efficient, it is important to note that this approach is

more methodical and requires a longer-term view of growth.
The emphasis is on building a solid foundation before
expanding into new territories or product lines. And while the
linear growth model may not deliver the same rapid growth
as an exponential business model, it can still be a successful
strategy for businesses looking to build a sustainable and
profitable operation.
The linear business model, however, is in stark contrast to the

exponential business model, which pursues exponential
growth and aims to increase its value output and growth and
reach ten times its current levels in a shorter period of time.
To achieve this goal, the model prioritizes constantly
releasing new products onto the market and an extensive
amount of research and marketing.
To scale quickly and efficiently, some businesses using this

model may even combine the exponential growth model with
lean methodology, which is a business management
approach that focuses on minimizing waste and maximizing
efficiency in all aspects of the organization. This is because
the primary goal of lean methodology is to deliver
high-quality products or services while minimizing costs,
reducing time-to-market, and improving customer
satisfaction; as such, it pairs excellently with an exponential
business model.

The methodology achieves this by emphasizing continuous
improvement, eliminating non-value-added activities, and
empowering employees to contribute to the improvement
process. As such, by mixing exponential business growth with
lean methodology, organizations can increase their efficiency,
responsiveness, and profitability while creating a culture of
continuous improvement. This approach also keeps the
company nimble and up-to-date with the latest trends. It also
allows the company to leverage customer feedback to
optimize products and grow the business.
The exponential growth model involves a competitive race to

the top, with companies vying to be the first to market with a
game-changing product. This is because the first-mover
advantage often results in the greatest reward, making speed
to market a critical factor in success.
So now, what exactly is the debate between a linear business

model and an exponential business model?
Well, one of the great things about the linear and exponential
growth models is that they both have the potential to
generate significant profits. But in the end, success depends
on many things, such as resources, experience, and the right
timing. And as such, as your business evolves, you may find
that your growth strategy needs to change as well.
Unfortunately, this can lead to confusion as business owners

try to determine which growth model is right for them. To help
clarify the decision, it's important to understand the benefits
and drawbacks of both models.
On the one hand, the linear growth model is simple to grasp

and offers a more measured approach to growth. It allows
you to invest in materials, create a product, and then sell it in
a single location, allowing you to then scale your business
customer by customer, aiming to secure a 10% increase in

profits or a 10% reduction in costs. However, this method can
be slow and may not be suitable for businesses seeking rapid
expansion.
On the other hand, the exponential growth model involves

releasing new products into the market to quickly and
efficiently scale your business. This approach prioritizes
being the first to market with a killer product, which can yield
significant rewards. However, it also involves a higher level of
risk and requires continuous innovation to maintain growth.
Ultimately, choosing between the linear and exponential

growth models will depend on your business goals and
resources. By weighing the pros and cons of each, you can
determine the best approach for your business.
So what are the pros and cons?
Well, one benefit of designing, making, and selling your

products in a linear growth model is that you become a
genuine brand owner. This is because it allows you to use
your unique story to establish a strong brand around your
product, giving you access to intellectual property rights that
you can sell later if you choose.
Additionally, since you have only a few products to focus on,

you have the opportunity to showcase your strengths and
bring a remarkable product to market, adding value to your
customers' lives. A classic example of this approach can be
seen in the tech giant Apple and how they market the iPhone.
Another advantage of the linear growth model is that you

need less money to produce your goods since you have
fewer products to create compared to the exponential growth
model. As such, the cost of production is lower when
compared to an exponential business model.

However, the linear growth model also has some downsides
that can make it challenging for businesses to succeed.
One of the biggest challenges is the drain on resources, as

the "onto the next one" setup requires a lot of time, money,
and energy to acquire new customers. Research has shown
that it costs five times more to get a new customer than to
sell to an existing one. Not to mention the fact that, since you
have just one product in your store, it can be disastrous if
your product fails.
Another downside is the fact that to get the most profit out of
your products in the linear growth model, you need to have
control over your supply chain. This in itself can be
challenging to fulfill when you're just setting up a business, as
it requires a lot of time, resources, and effort. Because of this,
you will be forced to rely on suppliers to source raw
materials, and it's unlikely you'll have your own shipping
vessel or vans to get the goods to you. Consequently, you
might end up incurring additional fees that cut into your
returns.
Additionally, the linear growth model is wasteful of both time

and money. This, in turn, causes you to miss out on the
chance to gather feedback that could improve products, as
well as the chance to upsell or cross-sell customers and
recycle unused materials, which can be terrible for your
brand's revenue, growth, and reputation. For example, if you
sell a green product like metal straws, but can't reuse the
leftover stainless steel used to make them, it's not a good
look.
For an exponential business model, on the other hand,

success can be achieved at lightning speed. This is because
having multiple fingers in the business pie gives you a better
chance of striking it big and expanding rapidly. For instance, if
you run an oral care company, you can introduce a wide

range of products like toothpaste, flosses, bleaching kits, and
mouthwashes in various flavors and strengths tailored to
regional preferences.
Because of this, you actually have a genuine shot at

dominating the market and adding value to your customers
by launching multiple products that meet their needs. See, by
using various marketing initiatives, strategies, and tools, you
can optimize your store for sales and encourage return
customers. This approach can help establish your brand as
the "go-to" store in your field and make it synonymous with
the niche you serve, such as McDonald's for fast food or IKEA
for flat-packed furniture.
Compared to the linear model, the exponential growth model

allows you to spread sales across territories and products,
resulting in revenue growth through multiple channels in less
time. The model also reduces the risk of exposure, giving
your brand more opportunities to expand its reach and
generate more revenue.
However, one drawback is that the exponential growth model

requires substantial investment, both in terms of money and
resources. This is because the focus on growth and speed
can sometimes cause quality to suffer, leading to reduced
customer satisfaction and potential damage to the brand's
reputation.
Another downside of the exponential growth model is that

the assumption of continued growth can lead to wishful
thinking. This is because, in real life, markets crash, natural
disasters happen, and other things you can't plan for can
mess up your supply chain, revenue, and ability to grow,
which could lead to failure. As such, betting on constant
growth sets you up for disappointment if things don't go
according to plan.

And yet another con of the model is that there is a lot on the
line when using the exponential growth model. This is
because many businesses do not take into account that while
the potential for success is high, failure can be equally
catastrophic. Because you have more products and
territories, you take on more risk because costs like inventory,
marketing, and freight go up. Any issues with these
components can severely impact your operations and
profitability.
In the end, in the debate of the linear versus exponential

business model, none stands supreme, as they both incur a
reasonable amount of pros and cons. As such, the better
business model is only relative to the business in question. In
layman’s terms, one man’s food is another man's poison, and
what may work for one may not work for another. Hence, it is
important to critically weigh the two business models in order
to choose the one that is best for you.

WHY IS THIS SHIFT
HAPPENING?
Now that we have a grasp on the concept of an exponential

business model and also on its pros and cons, it is important
to understand the reason for the sudden shift from the more
traditional business models to the exponential business
model and why it has become the go-to business model for
many companies and businesses worldwide.
Growing a company typically involves taking baby steps,

steadily climbing an upward linear curve that shows where
you'll be in a few years if all goes well. But for many, the
question has always been, "What if you want to accelerate
this growth?"
And although it requires money and people, many companies

still want to scale faster and more effectively, and that's where
an exponential business model comes in, because it focuses
on creating profound change on a global scale rather than
just solving immediate problems or meeting simple needs.
The potential upside of changing the world is tremendous,

and as such, it attracts a broad audience that cheers you on
to make the planet a better place and provides scaling
opportunities. But exponential growth needs exponential
ideas, which can be hard to come up with just by having
brainstorming sessions within your organization.
This, however, is not a major issue as outsiders can offer

fresh perspectives, and some of the best ideas for building an

exponential business model come from studying successful
and profitable models, using a common language, making
strategic choices, and identifying "antlogs," essentially picking
out businesses to learn from but not emulate.
And now, in the modern world, to 10X your business model,

you need to create value by using technology in at least one
key building block, such as the value proposition, channels,
or key resources. Companies like Amazon, Facebook, Airbnb,
Snap, and Slack have successfully done so by combining
existing tech with alternative value propositions. Airbnb, for
example, has a software platform that connects people who
need a place to stay with people who have one. This freed up
a huge resource that wasn't being used and created 10X
value without Airbnb owning a single room. This kind of
outside-the-box thinking and integration of technology and
opportunity is the backbone of an exponential business
model. It is the reason for its rapid growth and acceptance.

ELEMENTS OF
EXPONENTIAL BUSINESS
MODEL
So now that we have a tangible grasp on what an exponential

business model entails, It is important to look at the
components that go into making the model and how they
function.
Market Potential
To ensure the success of an exponential business model, it is
essential to have a sufficient amount of room for expansion.
This means that the problem you are attempting to solve
must be serious enough to merit a considerable number of
people paying for the product or service you are offering. To
put it another way, the potential consumer base and the
willingness of that group to pay are the factors that influence
the business the most and, as such, should influence your
business decisions.
You have the potential to experience exponential growth

even if the price of your product is relatively low if you are
able to offer a solution that addresses a problem that is
experienced by a large number of people. On the other hand,
in order to accomplish exponential business growth, you will
need to have a higher value for each individual customer if
your product serves a more limited consumer base.

Customer Value Created
In the process of finding a solution to an issue that has large
untapped market potential, it is quite unlikely that you will be
the only participant in the game. If you want to achieve
exponential growth and actually disrupt the industry, the
value proposition of your offering needs to be significantly
more compelling than that of your competitors.
To achieve considerable customer adoption, you need to

provide a value proposition that is much superior to what
your competitors are providing. This level of superiority is
commonly referred to as the "10x factor," and it is necessary
to achieve significant customer adoption. It is not enough to
merely provide a product or service that is marginally
superior; rather, you need to identify a value proposition that
is ten times better than what is currently offered on the
market.
What truly counts is how your offering is regarded in

comparison to that of the other companies in the market,
mainly because an incremental improvement of even 10 or 20
percent is not enough to create exponential development. In
order to realize the full potential of an exponential business
model, it is necessary to recognize and supply a value
differentiator that is ten times greater than that offered by
other businesses.
Customer Acquisition
Any company that wants to achieve exponential growth
needs to be able to consistently bring in new clients. This is
only feasible if the price of the good or service being
supplied is much lower than the cost of recruiting a new
customer.

The most effective exponential business models have
features that are organic or viral, which enable companies to
acquire clients without incurring large customer acquisition
expenditures. Which is why exponential business models are
so successful. In contrast, companies that invest a significant
amount of money into marketing for each new customer have
a difficult time achieving exponential growth.
Businesses can employ ambassadors, collaborations,

communities, or other ecosystems within their model to
further enhance client acquisition, and this can be done in a
number of different ways. An excellent illustration of a highly
exponential customer acquisition plan is one that combines
the effectiveness of viral customer acquisition with the
support of ambassadors who bring in new consumers over
the course of the business's existence.
Customer Lifetime Value

Customer Lifetime Value consists of two essential
components: the amount of time that a customer spends as a
customer of your company and the amount of value that you
are able to earn from each client during that period of time.
When it comes to consumer brands, also known as B2C,

establishing a long-term relationship with customers requires
becoming an integral component of their routines. This helps
customers develop a pattern of behavior that results in
long-term customer loyalty and value. On the other hand, for
companies that sell to other businesses (B2B), it is vital to
integrate your product or service into the business models or
operations of your clients in order to build a strategic and
long-lasting relationship with them.
In the end, clients that remain faithful to your brand and

increase the number of products they buy over time are a

direct contributor to exponential development, particularly in
business models based on subscriptions.
Economies of Scale
It is necessary for firms to design their operations with
economies of scale already built in if they wish to experience
exponential growth. As a result, the company is able to
increase its profit margins and decrease its unit costs as it
expands, which leads to increased profits as well as
resources that can be utilized to strengthen other value
drivers.
This idea is best illustrated by software-based business

models, which typically have marginal margins that are
extremely close to 100%. These models are intrinsically
exponential at scale because of their capacity to generate
huge unit sales without necessitating the construction of new
factories or the hiring of a large number of additional
personnel.

THE NINE DESIGN
PRINCIPLES FOR
EXPONENTIAL
TRANSFORMATION
There are nine distinct design principles that may be utilized

to effectively guide one's efforts in developing a business
model. Each of these is connected to one of the boxes on the
Business Model Canvas.

Customer Segments: Solve a
problem for the masses
Because of advancements in technology, businesses are now
in a position to enter completely uncharted areas of the
market on an unprecedentedly massive scale. And as a
bonus, the population of the world is quickly approaching 7.5
billion, and firms with exponential growth models now have
more ability than ever to help close the gap that will result
from this population increase and the resources required to
support it.
In most cases, businesses start off by providing a

fundamental good or service to address a certain unmet want
from their clientele. For example, Uber began by providing
services for personal transportation but has now expanded its
offerings to include, amongst others, Uber Eats and Uber
Health in order to fulfill other requirements. So essentially,
you must first find a niche or problem whose solution is in
high demand and solve it before the dream of exponential
expansion can be fulfilled.
Value Proposition:
Information-based services
and platforms
Today, companies are not just modernizing their old product
and service offerings, but also generating totally new markets
as a result of the widespread adoption of digital technology.
A classic example of this in action is the infamous Airbnb,
which rethought the concept of short-term housing; the
company Slack, which digitized collaboration and information
sharing; and the highly successful 23andMe, which made
DNA sequencing accessible to everyone at a low price.
In this modern day, it is imperative for any company to

investigate how and what aspects of their current value
proposition might be digitized. If you do this, you will not only
be able to better serve your current clients, but you will also
increase the possibility of establishing new foundational
exchanges of value.
Relationships: Build a
community of fans
In today’s world of business, it is vital to nurture a client base
that is loyal and enthusiastic, and then cooperate with that
customer base in order to achieve a business that is ten times
more effective than others.
Giving users the ability to modify fundamental features, such

as the filters on Instagram or the augmented lenses on Snap,
or the mashup functionality on Musical.ly, gives them the
ability to create original content that can be shared across
multiple platforms, which serves as a viral distribution and
marketing channel.
As such, you not only gain new customers from the effective
marketing done by your customers, but you also give them a
sense of control and belonging as they feel like a part of the
company and essentially make them add your product or
service as part of their daily routine. It essentially makes
every one of your customers a brand ambassador.

Channels: Multi-modal and
Social
Many exponential businesses want to increase the value of
their main product or service. This is why they use social
cooperation to connect their physical and digital outlets. This
strategy is effective because it makes use of material that
was contributed by users and amplifies it through network
externalities.
Essentially, the value of the service will increase in proportion

to the number of users who contribute to the platform. As a
result, the most successful businesses use this strategy as a
way to get customers, keep them interested, and increase
the overall value of their relationship with each customer. It
also uses game-like elements to make the process fun and
interesting for users. Waze was acquired by Google for $1.3
billion when it had only 100 employees, and since then, it has
evolved into a highly sought-after service for commuters.
Key Activities: Automated and

scalable processes
By automating formerly manual processes, cutting-edge
technology is radically altering the conventional approaches
taken in manufacturing and distribution. For example,
Amazon has been utilizing robots to stock and retrieve things
from its warehouses, and the company is also investigating
the possibility of deploying drones to transport its products.
In addition to this, the organization has effectively

transformed its cloud computing and data storage

capabilities, which were originally developed for use within
the business, into a useful resource for third parties. Amazon
established Amazon Web Services (AWS) in 2006, which
offers other companies the opportunity to rent out their
computing infrastructure.
Today, Amazon Web Services has been responsible for

fifty-six percent of Amazon's expansion over the past decade,
and it is expected to reach a valuation of one hundred billion
dollars within the next five years.
This success from the e-commerce giant is a testament to

how automation of the business processes within an
exponential business model leads to massive exponential
growth.
Key Activities: Lean approach

The implementation of a lean methodology across all of
General Electric's essential business operations is the driving
force behind the company's recent pivot toward exponential
development.
This strategy emphasizes an emphasis on the quick iteration

of experiments and learning, which not only permits the
taking of risks but also provides useful data that can be
studied and analyzed.
From their success, we can learn that companies can better

position themselves for development and success in a
continuously dynamic business landscape by applying lean
processes across a variety of departments throughout the
organization.

Key Activities, Resources, and
Partners: Algorithm to the
core
Google is an excellent example of a corporation that has built
its success on the back of algorithmic decision-making. The
corporation has increased its use of machine learning to
boost its capabilities, and the algorithm that is used to rank
websites is simply the base of the whole operation.
In a similar vein, the booming on-demand retail startup

StichFix has assembled a team of over sixty-five data
scientists and uses algorithms to drive practically every facet
of its operations. A noteworthy accomplishment for the retail
sector is that the corporation publishes a public blog that is
well acclaimed for its coverage of data science.
These two success stories show that a catalyst for

exponential growth is the ability to adapt to changes in trends
and technological advancement. In today’s data-focused age,
the need to understand and implement the proper use of
algorithms has become an essential tool in the search for
exponential growth.
Key Resources: Networked

culture
In today's present age, organizations need to encourage
networked collaboration and real-time information exchange
among their staff members in order to realize the benefits of
a 10X business model.
It is possible to decentralize decision-making and speed up
innovation with the help of a culture that is friendly and
transparent, and that gives workers autonomy. For example,
Zappos is one of the early adopters of a culture known as
"holacracy," which does away with traditional management
roles and encourages employee empowerment without
adding additional layers of bureaucracy.
In a similar vein, businesses such as Microsoft are making

investments in social software to facilitate impromptu
cooperation. These investments include the incorporation of
networking and social elements into all of their new office
suites.
Partners: Build uncommon

relationships
Working together with "uncommon partners" from a variety of
fields can result in the development of very effective
exponential business models. For instance, Matternet and
Mercedes-Benz have collaborated to develop a delivery
service that would fundamentally alter the manner in which
individuals request and get lightweight goods on demand.
This integrated value principle is very potent because it

encourages firms to assess whether they are required to
possess all of their resources or not. This topic pertains to
any asset that requires a significant amount of financial
investment, such as new ideas, skills, or equipment. As such,
it's better to look into the possibility of making connections
with and using resources from outside the organization than
to just focus on finding and developing good ideas from
within.

DIFFERENT EXPONENTIAL
BUSINESS MODEL
If you want your business to have a big impact (or output)

compared to others in its field, you need to build an
exponential business model. This can be done by using
exponential technology and cutting-edge management
techniques.
In this time of rapid technological growth, not only do we

have the chance to make big changes around the world, but
we also have the chance to create huge new business
opportunities. Financial success hinges on resolving the
world's most pressing issues.
Network Effects
The words "network" and "effect" make it easy to figure out
what "network effect" means. To begin, let's examine the
definition of the term "network." According to the word "web,"
a network is any system in which items or people are
connected to one another. In contrast, an effect is a
phenomenon that follows and is caused by some other
occurrence.
From the above definition, we can figure out that the network
effect is interconnected, so there is a result. The network
effect is a straightforward way of saying that people who join
a platform later add value to the services it offers. So what
exactly is the network effect?

The network effect is a straightforward way of saying that
people who join a platform later add value to the services it
offers. This occurs when more people or users join a platform
after it has already been established. As a result, when the
number of people taking part in an activity goes up, the value
of the goods or services also goes up. When more people
use the network, it makes the experience better for everyone,
which encourages more people to join because they can now
see how useful the network is.
E-commerce sites like Etsy and eBay, which became popular

by connecting to online networks and drawing customers to
their goods, are great examples of this. The internet is
another excellent illustration of the network effect. In the past,
there were not many people using the internet because most
people found it to be of little use, except for members of the
military and certain research experts.
On the other hand, as more and more people started to use

the internet, more content, information, and services were
created. As websites grew and got better, more and more
people used them to connect with each other and do
business together. Because there are more and more people
using the Internet, it is becoming more valuable.
The "network effect" may be traced back to the early 1900s

with the creation of the telephone, which went on to become
one of the most effective means of communication as a direct
result of the growing number of people who used it. The
network effects are becoming increasingly apparent on
today's social media platforms. The value As more people
sign up for accounts on these websites, the value of those
websites goes up for both users and investors in the same
way. More people sign up, and more companies get
interested in advertising to those people.
When a customer pays more money, more effort is put into

the service they receive, which makes the whole experience
better for the customer. There are several advantages to
network effects, including the following:
1. Protecting software companies from the threat of their

competitors;
2. Helping businesses grow;
3. Expanding client bases, market shares, and value

propositions;
4. The source of profit.
It is important to know that network effects are the foundation

of some of the most well-known companies, like Amazon and
Google. This means that the value of their products goes up
in line with how important the network gets. Yet not all
companies have the capacity to produce network effects, and
even if they did, not all of them should attempt to do so.
There is a wide variety of tactics and strategies, all of which

are directly dependent on the kind of product or service
being sold, as well as the market and the sector in which the
business operates.
Example of Network Effects

Even if not all technical businesses and startups in the
modern day reap the benefits of network effects, it is safe to
claim that the vast majority of successful technology
businesses do. Some examples of network effects are
provided in the following paragraphs.
Social Media
Reddit, Facebook/Meta, Instagram, Snapchat, TikTok, Twitter,
Pinterest, and Tumblr are examples of social media platforms.

E-Commerce
Some companies that do electronic commerce are Amazon,
eBay, Alibaba, Etsy, JD.com, and Shopify.
Recruiting
Indeed, LinkedIn, Glassdoor, and ZipRecruiter.
Ride-Sharing
Lyft, Uber
Delivery Service
Shipt, Instacart, Gopuff, and food-delivery services include
Uber Eats, DoorDash, Postmates, and DoorDash.
Freelance
Fiverr, TaskRabbit, Upwork, and Thumbtack.
User Reviews
TripAdvisor and Yelp.
The thing that all of these companies and their products have
in common is that their network effects are based on positive
feedback loops.
For example, Google's search engine platform is a good

example of how network effects can create a moat that lasts.
This is because Google is able to collect more data from its
users, which results in far more accurate search results.
The search skills of Google benefit not only the basic search
engine but also every product offering (for example, YouTube
and Google Maps) within the company's portfolio of offerings,
in addition to the advertising side of things.
It is for this reason that, Google has always maintained a

market share of more than 90%.

Platform-based Business
Models
Any platform business model must incorporate network
effects. With the use of network effects, a platform business
model provides value by facilitating interactions between
individuals, user groups, and the users themselves. Platform
business concepts often have two sides: the supplier side
and the demand side. The activation of contacts between the
two sides is one of the critical components required to ensure
the success of a platform business model.
A platform's business model is exceptionally powerful and

profitable. Platform businesses focus on making it easy for a
large number of participants or users, to talk to each other.
These exchanges could take the following forms:
1. Transactions that are completed quickly, such as

linking buyers and sellers;
2. Long-term partnerships with the goal of achieving

shared results.
Platform businesses are different from traditional businesses

in that they don't always make their own inventory or own any
of it. The platform as a whole is the asset, which could include
private or secret data or software from users.
When used in this context, the term "platform" refers to

nothing more than an interface that brings together diverse
groups of people in order to exchange some kind of value
that benefits both of those groups. Below, there are various
ways that the platform is used.

1. From individual elements to their collective effects
When a company uses a platform-based business model, it
shifts its focus from selling a product to creating an
environment where people can interact. This change is
crucial if you want to learn how platforms work, since they
usually don't require any money or inventory. The most
obvious illustration of this is Airbnb, which offers stays in one
of the widest varieties of homes all over the world, but does
not really own any of them.
2. From links to transactions

A platform also simplifies how users do business with one
another. If I go to Amazon, for example, I will find a vast range
of products, including not just books and music but also
apparel and other accessories.
By using Amazon Flywheel or Virtuous Cycle, third-party

businesses can show off their products in Amazon fulfillment
centers. This makes them eligible for one-day delivery
through Amazon Prime and other Amazon loyalty programs.
That makes it very simple to conduct business on those

platforms, and the transaction process needs to go off
without a hitch in order for customers to have a positive
experience and for sellers, the majority of which are likely to
be small businesses, to reap the benefits of Amazon's
economies of scale.
Even if your present company does not operate as a platform

business, it is still important to keep an eye on this
developing trend. There is a possibility that you may either
start a new firm that is based on a platform that adds value or
switch to a business model that is based on a platform. All
eleven of the companies below are great examples of
businesses that have taken this approach.

Examples of Platform Businesses
Platform businesses can be seen all around us, and below,
there are a few businesses that employ this model.
Amazon
Amazon is an online marketplace that brings together groups
of buyers and sellers from all over the world.
TikTok
Content creators and advertisers can reach a large number of
users through the TikTok platform.
Apple
Through its App Store, Apple makes it easier for end users
and software developers to talk to each other and work
together.
Fiverr
Freelancers and contract workers can connect with
companies and individuals who are hiring on the Fiverr
platform. Fiverr is an online marketplace for freelance work.
Instacart
Users of the Instacart app can choose their preferred grocery
store, select the things they need, and then an Instacart

employee will shop for the items, buy them, and deliver them
in as little as an hour.
GitHub
GitHub is a platform for software professionals who want to
organize their coding projects in one place, share projects
with one another, and track changes while various people
work on the code. Microsoft paid $7.5 billion to acquire
GitHub in 2018, and now it is a Microsoft property.
JustPark
JustPark has completely reimagined the concept of parking
by bringing together individuals who have an unused
driveway or parking space with motorists who are looking for
a place to park.
Zipcar
Zipcar is a service that allows people living in urban areas or
on college campuses to rent a car just when they need one.
This service is known as "on-demand car sharing."
uTest
uTest is a platform that lets users test the usability of
websites, games, apps, and services with the help of the
crowd.
WAX Marketplace
WAX Marketplace is a blockchain-based trading platform
where gamers can buy and sell a wide range of virtual items,
such as NFTs (non-fungible tokens), gaming skins, and
weapons.
Subscription Models
These are Models of businesses based on subscriptions. This
has been the case ever since the early days, when

newspapers were delivered to our doorsteps. Even today, the
subscription model is still very much embraced and can be
found everywhere, from the pet food deliveries that show up
on your doorstep every month to television streaming
services like Netflix that serve up your favorite shows.
The shift away from the traditional business model, in which

the customer makes purchases on an "as-needed" basis, and
toward one in which they sign up to receive the product or
service on a regular basis, is at the heart of the movement
toward subscription-based services and products that are
thoughtful.
This is a more convenient approach because customers save

time with auto-renewals that take tasks off their to-do lists. At
the same time, businesses get a steady income and more
loyal customers if they keep giving their customers value
through their subscriptions. So, what is a subscription
business?
When you offer subscription services, it means that you have

made an ongoing deal with your customer, and they have
agreed to pay you for access to your products or services for
a set amount of time, like once a month or once a year. Your
clients can also end the contracts they have with your
business at any time.
A subscription is a type of business model in which

customers pay a fee on a regular basis to use your product or
service. This fee can be paid monthly or yearly, and Netflix
and Spotify are great examples of subscription businesses.
With Spotify, you already have access to music; however,
there are several conditions that come with it, On the other
hand, you can pay to have great access to music without
interruption or conditions; in addition, there are many benefits
that come with the premium package, which of course has to
be renewed every month. If you fail to renew your

subscription, you will lose access to the music until you
subscribe once more.
Customers, rather than the company itself, often have access

to the product or service through a business model that is
based on a subscription. This type of business model is
predicated on a recurring customer base. The company
running the subscription-based business will take care of the
underlying good, so the customer can use the service without
owning it. This enables the customer to save money.
In a business model based on a subscription, customers or

members pay a set amount every week, month, or year to be
a part of the business. In exchange, they receive a good or
service in exchange for their payment. This concept is an
example of a larger movement in the world of business
known as the "membership economy," in which consumers
place a higher priority on "access" than "ownership." Using
Spotify as an example again: The people who use it, don't
want to buy CDs or digital files of their favorite artists. Instead,
they want access to Spotify's streaming service so that they
can play their favorite music whenever they want, on
whatever device they want, and wherever they want.
In the future, we will own almost nothing. Access to phones,

music, clothing, automobiles, homes, and even roads will be
provided as a service. This presents significant business
prospects. Zuora's research indicates that subscription
businesses saw five times the revenue growth of the S&P
500.
Subscription-based business models are now the norm for

many technology companies.
Businesses like Netflix, Spotify, and Amazon Prime like the

subscription-based business model because it gives them a
more stable way to make money. That is why many

businesses are adopting the subscription-based business
model.
In other cases, like Amazon Prime or Costco members, those

are not just additional revenue streams but also programs
that help those companies lock in repeat customers.
Lastly, the subscription-based business model has grown
over the past ten years as an alternative to the
advertising-based business model (like Google and
Facebook) that dominates the web.
Examples of Subscription Businesses

Subscription plans are taking over the business world now,
especially now that a lot of services are rendered, and
subscription business models present an enormous
opportunity for businesses. For better assimilation, a few top
subscription business models are mentioned below.
Netflix
We can't mention the subscription model without mentioning
Netflix. Netflix's business model is a powerful example of a
subscription-based model that uses its monthly fee to boost
its recurring revenues. The subscription revenue model also
lets Netflix invest more in content than traditional mass
media, where each deal has to be made again and again.
Netflix is a subscription-based business model that makes

money with three simple plans: basic, standard, and premium,
giving access to stream series, movies, and shows.
Leveraging a streaming platform, Netflix generated over
$29.6 billion in 2021, with an operating income of over $6
billion and a net income of over $5 billion.
Apple One
This is a more convenient subscription plan, as subscribers
get a bundle of Apple’s six most popular services (TV Plus,
Music Plus, Arcade Plus, iCloud Plus, News Plus, and Fitness

Plus) for one monthly price.
Amazon Prime
Amazon – Your Prime membership gets you access to
Amazon’s TV and movie content, and their convenient
"Subscribe and Save" feature will auto-order and deliver
items on a set schedule. Imagine having your toilet paper on
auto-ship! Amazon can do it for you.
Google
You can subscribe to specific apps on the Google Play Store,
using your own Google account.
Scribd
Scribd is a platform for e-books that gives customers
unlimited access to more than 60 million documents that
authors have uploaded, such as articles, books, and
audiobooks. As long as a customer's subscription is still
active, content can be downloaded to the Scribd app for use
when they are not online. As long as a customer's
subscription is still active, content can be downloaded to the
Scribd app for use when they are not online. Scribd offers a
free 30-day trial without download capabilities, then costs
around €9/month.
HelloFresh
HelloFresh is an international company that delivers
personalized boxes of fresh ingredients with easy-to-follow,
healthy recipes. In the UK, a two-person, five-meal plan costs
€53 per week plus shipping, for an average of €5 per
serving. Customers can change their order week by week
and discontinue the service at any time.
Porsche Drive
Porsche Drive "puts the Porsche fleet at your fingertips" with
subscription and rental options. The rental price for one day
with a classic model is €519 in Germany, up to €5,872 for 14

days with a 911 GT3. In contrast, a monthly multi-vehicle
subscription from Porsche USA costs €3,600 plus tax and a
€595 activation fee plus tax. This includes 2,000 miles, seven
models, insurance, roadside assistance, vehicle maintenance,
and free delivery within 20 miles of the dealership.
Falck
Falck is a European healthcare network that serves
customers in 29 countries. With a membership, members get
annual checkups, free transportation to the hospital in case of
an emergency, a guaranteed appointment with a specialist
within ten working days, and a helpline that is open 24/7.
Freemium Models
Although the name "freemium" wasn't introduced until 2006,
the freemium business model dates back to the 1980s.
Because it is a blend of the words "free" and "premium," it is a
really fascinating word to consider using. The freemium
business model is a sort of business model in which
consumers are not charged for access to the core
functionality of a product or service but are charged a fee for
access to additional or enhanced functionality. The
"freemium" business model is when a company gives away its
basic services for free, usually as a "free trial" or a version
with limited features, but charges for its more advanced
services or extra features.
Freemium business ideas are especially popular in the

software and web-based business worlds. This type of
business model is good for bringing in a large number of new
users for the first time, especially when there is no cost to try
out a new app or service. For the freemium business model
to work in the long run, companies need to make sure that
paying customers have access to more functions and
features, like more storage space or more ways to customize

the product, as well as better customer service.
The freemium pricing model is still one of the most popular

and fastest-growing ways to set prices today. It is a type of
business strategy in which customers get the most basic
features, services, and goods for free but can pay extra to get
access to more advanced options. In this post, you will learn
about several instances of freemium business models and
how to take advantage of those models to improve your
revenue.
The freemium model is a way to set prices in which a

company gives away a basic product or service for free but
charges for extra features or functions. Nevertheless, there is
a fee associated with using the premium services. Obtaining
a large number of users is the objective of this strategy. First,
get them interested in the free product, and then try to get
them to upgrade to the commercial version. In some
examples of the freemium business model, users are given
the ability to try out things before actually making a purchase.
Because of this, it is an appealing choice for businesses that

are searching for ways to turn leads into paying consumers.
But the freemium business model does have some problems
of its own. For instance, some users may never upgrade to
the paid version, which may result in less revenue for the
business as a whole.
When a product is given away for free, its perceived value

can go down, and its best features can't be sold for a higher
price. As a direct consequence of this, the freemium business
model does not come risk-free. But, in the right hands, it has
the potential to become a powerful tool for the expansion of
a company.
Freemium Model Examples

A lot of software, gaming, and internet-based businesses

today use the freemium business model. The following are
some freemium examples that can serve as a source of
inspiration for you:
Spotify
When it comes to transitioning people from freemium to paid
subscription services, Spotify is one of the most successful
organizations out there. Their conversion rate is 45%, which is
rather outstanding. To put that into perspective, Dropbox only
has a 4% conversion rate. The free version of their service is
completely different from the premium version in every way.
The free version of the service plays ads every few songs, but
all albums, playlists, and radio stations can be played in
shuffle mode. Because these customers can't skip right to the
songs they like the most, it's a strong reminder of what
they're missing out on because they don't have a premium
membership. As a user with premium access, you will:
1. Have access to playlists that can be accessed offline;
2. Get the ability to skip as many tracks as you like, and

the sound quality will be improved;
3. Those who want to find new music and have more

control over their experience will find that these paid
additions are well worth the investment.
Dropbox
Dropbox is another example of a freemium business strategy
that has been effective. In 2008, the company first began
offering its services, primarily as a backup solution for files.
The company is now offering a basic package that includes 2
gigabytes of storage space.
It also has programs for both individuals and businesses, and

the business versions can be tried out for free. Users are
required to upgrade their plans in order to get more storage
space and other features.
LinkedIn
LinkedIn was founded in 2002. It runs a professional
networking website where users may form relationships with
other professionals, search for opportunities, and make
contact with potential customers.
As of 2019, the network's monthly active users (MAUs) came

from more than 200 different countries and territories. You
can make a free digital resume by uploading your information
to LinkedIn and using their features to format it. You will need
a premium account, though, to get access to job analytics
and to be more visible to recruiters.
ChartExpo
If you come from a background in data analysis, then you
most likely enjoy using visuals to present the results of your
analyses. ChartExpo is a great library that can be used as an
add-in to Microsoft Excel or as an extension in Google
Sheets. It provides a free version that you can use to examine
your data and displays some attractive graphics. If you are
pleased with it, you can purchase this library so that you can
present your data differently.
PPC Signal
PPC Signal is another example of a successful freemium
business strategy. Customers are able to manage, optimize,
and monitor all of their campaigns from a single dashboard.
With the use of AI and ML, PPC Signal can make it simple for
you to determine which aspects of your campaigns are not
producing the desired results. You won't need to worry about
throwing away money thanks to this.

Automation-based Business
Models
Most automation-based business models are based on
algorithms that automate some important tasks to provide
value to users. These models are characterized by their
heavy reliance on automation.
There are a lot of people who have the fantasy of being able
to establish a business and then put it on autopilot so that
they may devote their time and energy to activities that they
find enjoyable, but very few people actually accomplish this.
Despite the fact that it may appear to be difficult to put into
practice, a number of different business models can really be
set up to operate on an automated basis. For example?
ATM Business
A business that uses ATMs is a good example of a business
model that can be done automatically. When you go this
route, you will be responsible for the purchase and
placement of ATMs at key locations. ATMs may be helpful for
customers who need access to cash in certain places.
Customers can get cash using their debit cards, which results
in passive income for the business. The cash dispenser
requires nothing more than occasional topping off by an
operator. If you want to automate the business to the fullest
extent possible, one option is to engage a worker to handle
this for you.
Website
Start a business that operates online. This is another way to
create an automated business project. By making and
maintaining your own website, you can set up a stream of
passive income. For instance, a large number of infopreneurs
sell information to people who visit their websites. They will
not be required to offer a tangible product because of this,
and they will be able to put everything else on autopilot.
You could sell digital downloads of music or software on your

website, which the buyer would get right away after making
the purchase. Publishing and drop-shipping are two other
instances of solid practices.
Ecosystem-based Business
Models
Digital business ecosystems are still not very well
understood, even though they have become more important
over the past ten years. Business ecosystems are systems
made up of actors who work together to solve a problem for
an end user.
To effectively plan for an ecosystem, you must first draw a

map of it, then figure out where the value lies or is
concentrated on that map, and, finally, plan for the future
based on your current assets and your goals for the future.
Ecosystem-based business models are usually made up of a

group of services, products, or even companies that work
together to reach a common goal. When a customer or user
starts interacting with any of these parts, they are said to
have joined the ecosystem. Each project doesn't have to
have a workable business plan, but the overall balance of the
ecosystem is something that needs to be thought about. One
excellent illustration of an ecosystem is the company Google.
Its primary search engine serves as its basis, but Google also
offers a variety of additional services, including Drive, Gmail,
Maps, and so on.

Examples of Ecosystem-based Business Models
Here, there are a few examples of the Ecosystem-based
Business Model:
Apple's ecosystem
Apple does not market the Apple Ecosystem (™) as a product.
The Apple Ecosystem is not a physical object that can be
"bought" at an Apple Store; instead, it is an experience that a
person and their lifestyle might have as a result of having
many Apple devices. Consider this: when you play your
favorite role-playing game, you gain character boosts
whenever you obtain a rare collection of items. It is, in
essence, what ecology is. Unique features that are accessible
to your Apple devices and that, as a result of interaction
between Apple devices, elevate the level of the user
experience you have are available to you.
Apple is in a position to set up an ecosystem because its

products aren't built around a single device. They center the
design of their products on the ecosystem. It used to be
designed around a single device. Still, sometime around the
era of the iPad and iPhone, the ecosystem evolved, and it is
now slowly but surely becoming the primary aspect of the
Apple experience. In addition, Apple does not sell the
ecosystem in an overt manner, but rather in a covert manner.
The Apple ID serves as the central identifier for the whole

Apple ecosystem. Your Apple devices must be registered
with your Apple ID in order to be used. From that point on,
Apple will not be able to determine how many devices you
are familiar with, but will check to see if those devices are
nearby and if the devices that are nearby are a part of your
contact circle. When a piece of information like this is present,
it indicates that the gadget will be available to you or
someone connected to you.
An ecosystem is a biological community made up of many

living things that interact with each other and with their
physical surroundings. This type of community is known as an
ecosystem.
It is possible to argue that the Apple ecosystem is one of the

greatest. In this article, I will explain what an ecosystem is and
why you are definitely locked into one if you use Apple
products.
The various Apple products and services with which each

and every one of us engages on a regular basis constitute
what is known as the Apple ecosystem. This is a
representation of a sample image. It offers some ideas, but
does not cover them all.
Apple's products and services work well with each other and
with everything else the company sells. These are very easy
to operate and have a smooth transition. The quality of the
experience for the user is, without a doubt, exceptional.
One thing that Apple does incredibly well that other

companies have struggled to do is establish an ecosystem
that ensnares you and compels you to remain within it. This is
something that other companies have tried to achieve, but
have failed at. People who work in the tech business often
refer to the ecosystem of Apple products as a "walled
garden."
The iPhone, which is by far the most popular and successful

product in Apple's line-up, is in charge of the entire line-up.
As a result, the following is a list of some of the coolest things
that can be done just within the Apple ecosystem:
1. Simply select a word on your iPhone, copy it, and then

paste it into the appropriate spot on your computer;
2. With the help of the Handoff function, it is possible to

begin a conversation on a Mac and carry it on through
an iPad;
3. Apple Pay may be used with ease on any device,

including your watch, phone, or computer;
4. All of your Apple products can share a single Apple ID,

which acts as a singular identifier for all of them;
5. You can easily share your iCloud storage space, Apple

Music subscriptions, and purchases with other people
in your family;
6. Adding a picture or scan that was taken with an

iPhone right into a document Camera;
7. When you get a call on your iPhone, you can simply

ask HomePod to take the call for you without having to
touch your phone at all;
8. Integrated approach for monitoring, wiping, or pinging

each of my devices;
9. With Airdrop, it is simple to determine which devices

are connected and to send enormous files;
10. To transfer music between your iPhone and HomePod,

bring both devices into close proximity to one another;
11. Check out the combined amount of time I spend using

all of my devices' screens;
12. After only a single pairing, AirPods are able to sync

with any iPhone, Mac, iPad, or Apple TV. Photos could
automatically make movies and memories, which
would make them available on all platforms while still
being processed locally;
13. Safari is the only browser that will suggest passwords

for all of your devices and keep them in sync;
14. Your data's privacy across devices.
Amazon's ecosystem
The strategic thinkers at Amazon ignore the conventional
confines and restrictions of their industry. The focus is on
increasing the number of services offered, digitizing them,
connecting everything, and accelerating the process. The
Amazon flywheel makes it possible to create a data-driven,
circular ecosystem that relies on open innovation.
The Amazon is still one of the largest and most tenacious

beasts that can be found anywhere on the globe. We are all
familiar with how the e-commerce giant got its start as a
simple bookseller. Still, the foresight of founder and former
CEO Jeff Bezos has led the company through a number of
revolutionary changes, including dominating the retail
industry, revolutionizing the gaming industry, and even
controlling a third of the internet with Amazon Web Services
(AWS). The practice of open innovation requires participation
in the startup ecosystem. Amazon has shelled out around $4
billion to acquire companies whose primary focus is artificial
intelligence. Its Alexa Fund has made over 50 individual
investments in voice-related firms on its own.
As of the second quarter of 2020, the Amazon ecosystem

includes 200 million Echo devices (in people's homes), 7,000
AI employees, 572 physical stores, a $19 billion digital ad
business, 400 private label brands (ranging from Basics to
Presto to Solimo), 43 subsidiaries, a $1.5 billion eSports
business, a $40 billion revenue cloud business, blockchain
and IoT services, healthcare initiatives (like Care), a $40
billion R&D budget, a few startup investment funds.
At the same time, Amazon is making investments in its own

research and development facilities, such as Lab 126, A9, and

WebLabs. Macrotrends.net says that the company spent
$37.3 billion on research and development last year.
Amazon is a different kind of company than most others.

According to what the map depicts, it is an ecosystem. A data
flywheel that is constantly changing propels the ecosystem,
which is a living thing.
But the results don't lie, and Amazon's business keeps giving
its customers a lot of value. Amazon's strategy of going to any
lengths to make sure its customers are happy has been
debated for a long time in many business classrooms. Some
estimates suggest that the flagship product that the vast
majority of people think of when they think of Amazon —
Amazon Prime — takes up a negligible portion of the value
that the company creates. Business Insider says that the
value of all the services that come with Amazon Prime is
more than $785.
Google's ecosystem
As can be seen in this image, Alphabet Inc., the parent
company of Google as well as a number of other companies,
has a large portfolio.

Some fun facts:
Google has close to 120,000 employees; more than 40,000
searches are performed every second; Google has more than
3.5 billion searches per day; Google performs close to 50% of
product searches; the original name of Google was Backrub;
and Yahoo wanted to buy Google for $3 billion in 2002;
however, Google declined the offer.
The motto that best describes Google's ecosystem is "Better

Together." Its primary focus is on the Android operating
system, which is used in more than half of all smartphones
across the world. But, it is also integrated with other Google
products such as the Chrome OS computer operating system,
Android TV, and Wear OS (a smartwatch operating system)
There is a good chance that you already have a Google

account. It indicates that you are already integrated into
Google's larger ecosystem. If you use Google's Chrome web
browser and register an account there for convenience, you
are already a part of the ecosystem. Similarly, if you sign up
for Google's free email service (Gmail), you are already a part
of the ecosystem.
You will receive 15 GB of free storage space when you sign

up for a Google account, which is three times more than what
Apple is willing to give. In addition, you will have access to
Google's collection of software, which includes the Google
Workplace (Google Docs and Sheets are among the most
popular options), and you can use your Google account to
sign up for virtually any service, including Spotify, your
preferred website, and others.
Microsoft's ecosystem
Microsoft's ecosystem is made up of five main pillars, all of
which are included in the Microsoft stack. It is a business
application platform that runs in the cloud and combines
components for customer relationship management (CRM)

and enterprise resource planning (ERP), in addition to
productivity apps and artificial intelligence (AI). The Common
Data Service serves as the foundation for these pillars'
construction.
To get a better understanding of the Microsoft Ecosystem,

you need to understand the stack's five pillars and the
Common Data Service platform.
The abbreviation for Common Data Service is CDS.

The data is put to extensive use in the programs designed for
businesses. How is it stored? The data for the CDS is stored
in a group of different entities. And what exactly does the
term "entity" refer to? It is a group of records that functions in
the same way as a table works within a database, which is to
say that it stores data. The Common Data Service not only
includes a fundamental group of entities, but it also permits
the production of one-of-a-kind entities that are specific to an
organization.
The question now is, "How is it utilized?" This information can

be put to use in the development of highly effective
programs, such as Power Apps.
Why is it necessary for us to have a unified data service?
Why do we use CDS? That is the Question Now That We

Have a Better Understanding of CDS.
One of the many benefits of CDS is that all of our data, both
standard and custom, is stored in a safe cloud-based
environment. Some of the benefits of both standard and
bespoke entities are that they are easy to manage, they are
secure, they give us access to our Dynamics 365 data, have
rich metadata, logic, and validation, and come with a variety
of tools that help us get work done. Let us now investigate
the benefits of CDS in a bit more detail, including:

● It is easy to administer, and there are few security
risks;
● You don't need to be concerned about the particulars

of how they are stored because both the metadata
and the actual data are saved on the cloud. This
eliminates the need for you to do so. Additionally,
because the data is stored in a safe manner, users are
only able to read it if you give them permission to do
so;
● Power Apps give out a lot of metadata because they

use data types and connections right inside the apps
themselves;
● It has logic and validation so that you can make

calculated fields, business rules, workflows, and
business process flows to ensure quality and drive
business operations. The fact that it allows you to
design these things makes this possible;
● It does this by making entities available, which

increases productivity and makes sure that data is
easy to get to;
● It makes it easier to make apps because it lets you

combine data from many different sources into a
single store and only needs a single piece of logic to
store, retrieve, and change data.
Uses for Businesses Using Dynamics 365

Microsoft has combined the technology of Dynamics CRM
and ERP into a single cloud-based service for their product
line. It does this by harnessing intelligence to move away
from making reactive business decisions and toward gaining
proactive insights that help people accelerate business
performance. CRM and ERP are both transformed as a result.
Because all of the Dynamics 365 applications, including

Sales, Customer Service, Field Service, Finance & Operations,
and Marketing, are connected to one another through a
shared data service, this platform is the best of breed when it
comes to business application platforms, and it is where our
transactional data is stored. In addition, the recent purchase
that LinkedIn made broadened the data augmentation of 500
million sales professionals for the purposes of recruiting and
sales.
Azure, Big Data, and Analytics

Is it possible to revolutionize our company with Microsoft
Azure and the Analytics Platform? Because Azure offers a
rapid development platform for modifying our company, it is
entirely possible for us to do so, regardless of whether the
change involves artificial intelligence (AI), bots, the Internet of
Things (IoT), or the rapid expansion of mobile and web
capabilities. By doing real-time analysis of enormous amounts
of data, it enables better decision-making in addition to
providing improved user experiences. In what ways, then,
may the business insights that are derived from Azure and
analytics help transform our organization? These are some
instances of intelligent actions, such as those listed above,
that not only increase the level of engagement with
customers and revenue but also lower costs.
We are able to use AI (artificial intelligence) to rank leads and

opportunities and to direct the attention of our sales force
toward the best opportunities that have the highest value and
the highest probability of being closed. One of our clients, a
travel company, uses this to prioritize leads coming in and
stack rank the prospects in order to optimize income. This is
done by combining information from customer profiles with
information from outside sources, such as credit scores from
Experian.
It is possible for us to use bots to push technical sales replies

to field reps, allowing them to ask questions and receive

answers. Bots can run question-and-answer sessions for
customer service and send questions to the most qualified
customer support expert based on how the bot answers the
first question.
It's possible that we'll use cognitive services to power

real-time video, picture, and facial recognition services, as
well as text recognition. For example, did you know that Uber
drivers must first go through a facial recognition verification
process before picking up customers? This is to make sure
that customers are safe.
We also have the option of using forecasting algorithms in

order to get an accurate estimate of the inventory figures.
Applications submitted by non-affiliated parties

Microsoft provides its own marketplace for apps that can be
used with Office 365, D365, Power BI, or independent Azure
web apps. Microsoft also has algorithms for machine learning
that can be used to do things like make predictions and find
fraud. This particular marketplace, which is frequently
referred to as Microsoft AppSource, incorporates a large
number of different marketplaces. You can look through the
available programs to find one to try out rather than acquiring
an entire software suite. The advantage is that users may now
customize little bits of software to accomplish a particular
business objective. These pieces of software can then be
user tested, and if they are successful, they can be used as a
service. How exactly does this software's split-app style stand
out from the competition, and how does it save money?
Because you won't need to invest money in suite functions
that aren't going to be used.
Apps Designed Only to Fulfill a Certain Function

Rapid mobile development tools, such as Microsoft Power
Apps, give non-technical people the ability to build mobile
applications from pre-made templates by making use of

either low-code or no-code features. Power Apps makes it
easy to add more functionality quickly because it can connect
to business apps, Azure Services, and productivity apps. You
may also use Flow for cross-application connectivity and
workflow approvals. This is because Power Applications
provide sophisticated business logic and workflow features to
transform manual business operations into digital and
automated processes. Flow may be used for these purposes.
In addition, users can access these applications via a desktop
computer or a mobile device.
Data from business applications can be shared with programs

like Outlook that are used every day to get work done. This
can boost productivity. How? For instance, in the past, if a
customer wanted to find out the current status of their order
— whether there were any open cases or whether any
invoices were overdue — they would most likely have to call
someone in the back office or operations, or they might even
have to enter information into another system. In spite of this,
you are now able to view all of this information in real time
without having to exit the productivity software you are using
because the information is provided within the context of
your chat.
Using extra collaboration tools like Teams and OneDrive can

help you stay in charge of the communication, document
management, and collaboration processes that are important
for business apps like sales pursuits and estimates.
In summary, Microsoft's ecosystem is mostly made to meet

the needs of businesses, not those of individual consumers.
Microsoft's enterprise products and cloud services, in

particular, work well together. This has a lot of benefits for
businesses that use Microsoft's products and services.

EXAMPLE OF EXPONENTIAL
BUSINESS MODEL
Here, there are some examples of big players utilizing the

exponential business model efficiently.
Airbnb
"Belongs Anywhere," that's the slogan of the Airbnb company.
For those who haven't heard of Airbnb, they are a rental
company for short-term home spaces and experiences
globally. Their business model, upon being dissected, is a
simple business model that explains how they function and
how they make their profits. Airbnb makes its profits by
collecting booking fees from travelers, renting out temporary
accommodations, and providing quality, short-lived
experiences.
What truly gives the Airbnb business model the cutting edge
in the hospitality market today is the fact that it is exponential
in almost every aspect. The Airbnb business model is
designed for a mass market, and it links players in mass
markets together (i.e., travelers, hosts, and experience
providers). This is considered an exponential business model
because its foundation is a marketplace that relies solely on
data. Airbnb does not own the property their customers are
provided with; they simply link players who have products
and services to offer with customers who desire them. This
eliminates costs ranging from maintenance of properties to
repairs on properties in the event of damages incurred. As I

said, the Airbnb exponential business model is self-sustaining
and simple.
Uber
Uber is another company benefiting from the exponential
business model. Uber is a globally recognized company that
links customers to drivers who transport them to their desired
destinations. It has an interface with gamification that makes
it easier for customers and drivers to connect and transact.
Uber makes money by collecting fees from bookings on their

platform. Uber has three main segments: mobility, freight, and
delivery. The mobility and freight segments are two-sided
segments, but the delivery segment is a three-sided segment.
The two-sided segments are only between drivers and
customers. They include the customer, the driver making the
delivery, and the company whose product or service is being
delivered.
Uber's two-sided network makes transportation more

comfortable for passengers. With more drivers joining the
platform, more riding options and pricing options become
available to passengers. Their three-sided network creates a
healthy dynamic between restaurants, drivers, and eaters,
making the platform more valuable for each of them. With
such services, there's bound to be exponential growth.
PayPal
If you shop online globally, then you're no stranger to this
giant platform. With over two hundred million users
worldwide, PayPal has become one of the largest payment
systems in the world. PayPal started with a unique payment
system, making it easy for users to pay for services from any
part of the world to individuals and companies.
The PayPal business model is a two-sided model, involving

merchants who use PayPal services for transactions and
consumers who make payments through the platform. The
PayPal business model was designed for the masses. It
makes the exchange of currency easier and makes shopping
easier for consumers, and its user interface is user-friendly,
making it easily accessible to consumers.

Etsy
Etsy is a site that lets users set up e-shops and sell their
unique items. There are millions of sellers on Etsy, and
millions of customers shop for products and services daily.
Etsy is a two-sided business model that connects users with
creative sellers who are keen on buying and selling unique
items.
Etsy makes money from transaction fees on the items sold

between customers and sellers. Their key partners are
sellers, who provide a wide range of unique items and a
reach across several marketing channels. As of 2022, Etsy
realized a count of 88.3 million active buyers and 5.3 active
sellers. The interaction between these two players has led to
the growth of the Etsy business model, it has flourished over
the years and will keep on growing.

Squarespace
Squarespace is a North American website-building and
hosting company. The platform offers e-commerce
functionality, domain name services, and user analytics. The
Squarespace business model revolves around two main
streams: presence and commerce.
The presence stream consists of the subscription plans

offered by the site. This is the site's major source of income.
The company also makes money from the customization of
subscription plans on its site at a premium price for users who
want more out of the site. The company's consumers consist
of people who want to create sites, and Squarespace makes
it easier for them to do so.
Netflix
Upon the mere sound of this behemoth's name, there is a
wave of excitement in the air. One of the most popular
streaming sites on the planet today is Netflix. With over a
hundred million users around the world, the Netflix business

model is oozing exponential growth.
Netflix has a subscription-based business model, generating

income from the subscription packages they offer for users to
stream movies, TV shows, anime, and much more. Netflix
offers three packages; the basic, the standard, and the
premium packages. Netflix generated over $29.6 billion in
2021, with an operating income of $6 billion and a net income
of over $4 billion. Netflix started making its television content
under the Netflix Originals initiative and has amassed over
223 million paying members worldwide.
Amazon
Amazon is one of the largest e-commerce sites in the world.
They sell almost everything you could think of on Amazon. It
started with just books and e-books for readers to purchase,
but over the years, Amazon has expanded and diversified its
inventory.
Amazon has a diverse and exponential business model,

generating income from multiple income generators. Amazon
makes its highest income from its online stores. Over the
years, Amazon's online stores have realized a total of $220
billion in sales. It consists of a two-sided business model: the
consumers and the sellers. Amazon provides a platform for
buyers and sellers to easily interact and trade. The services
Amazon provides have led to its exponential growth.
Spotify
Spotify is a streaming service provider, which makes it easy to
listen to artists. Spotify is globally recognized for its streaming
services. Spotify is a two-sided marketplace where music fans
and artists engage. It consists of a free ad-supported service
and a paid subscription service.
Consumers who use Spotify's free ad service still enjoy the

privilege of streaming whatever song they want to listen to,
but at a price. They are given a limited number of skips and
standard sound quality. Spotify makes its income from its
premium subscribers, who enjoy unlimited skips and
enhanced sound quality. The exponential growth of the
Spotify business model is limitless and will keep growing for
years to come.

STEPS TO DESIGN AN
MODEL
In today's world, exponential technologies have created a

massive trend that is producing outstanding and
unimaginable business opportunities and, in turn, making the
world a better place for everyone. Most prospective business
opportunities are tied to solving the various problems we are
all battling as a populace.
If you are an entrepreneur who is considering the launch of a

new ExO or an innovator in an organization who is prepared
to transform your existing business into an exponential one,
following the five-step process that is described below will
assist you in designing a truly exponential business model.
However, before proceeding with the steps, I’d first like to

use a real example based on an organization you may know
quite well, to properly explain this process.
Picture this, you are an innovator working for a hotel chain,

let’s say, Hilton. As an innovator, your goal is to disrupt the
hospitality industry by launching a new exponential business
model. Now, let’s say your new exponential business model is
the Airbnb business model, wouldn’t that be a truly innovative
leap for you? Especially knowing how successful it has
become in recent times.

So, Airbnb, the world's largest hotel chain (despite not owning
any hotels), is a perfect example of an ExO.
Start fresh
If you plan on designing an exponential business model from
an existing one or using an already existing set of assets or
an existing organization as the base for building and
executing your new business model, don’t do it! Well, it’s not
like you will be able to anyway, and for a number of reasons.
An existing business model will stifle your creativity and

restrict your ability to think outside the box. Asides from that,
existing assets will not allow you to come up with clever
innovations and will also limit you from performing at your
optimal level. This is because you will try to leverage the
assets you already have. And to add to that, existing
organizations will also be an obstacle because their
preexisting business models will try to counteract your
innovative business model. Don't forget that the immune
systems of established organizations usually oppose
innovation!
The only way to create, build, and scale a new business

model is to do it on the edge, if you're attempting to do it
from within an existing organization, or as a whole new
project, if you're an entrepreneur considering creating a new
exponential organization. I'll offer some additional
suggestions on this at the end of the essay.
For example, if you want to build a business model like

Airbnb's, it's wise to start from the beginning. And although it
might seem like a good idea, working for Hilton can make
you start thinking about how to use the company's current
assets, which will definitely make it difficult to move forward.
This is why you should start fresh!

Define your MTP
One of the most notable differences between a startup and
an ExO is startups are mainly focused on making massive
profits, while ExOs strive to make the world a better place.
And because the major problems in the world are also the
most significant opportunities for businesses, doing good and
making money are not mutually exclusive. The most effective
approach to developing a brilliant Massive Transformative
Purpose (MTP) is to think big and outside the box. According
to Richard Branson, "if the dreams of your company don't
scare you, they are too tiny."
For example, you could start by thinking about the problems

that travelers are having with hotels right now. For instance,
hotels are notoriously cold and unhomely, and painfully
similar.
Wouldn't it be amazing if you could travel all over the world

and experience each destination like you were in the comfort
of your own home, no matter where you went? It definitely
would be; however, this kind of luxury is only accessible to
rich individuals who can afford it. Since we are now living in
an era of increasing advancements in technologies and a
wealth of resources, why don't we make an effort to create a
society where everyone has a place to call home regardless
of where they are or who they are? This would be your MTP
moving forward.
Find a global problem and a

scalable solution
Now that you have an MTP, use it to explore and think of new
problems that need solving. Also, remember that to think of

global issues and not just local ones specific to a region or
country, you want to make an ExO that can eventually be
used worldwide.
After thinking about a global problem, the next thing to do is

develop a technological solution that can be used worldwide.
This is the only way to grow and expand. Also, if you think
about how quickly technology is changing, you can easily see
that even though some solutions don't seem possible right
now, they might be in a year or two. So, don't plan linearly;
instead, plan exponentially.
Lastly, don't forget the possibility that you might have chosen
a problem and a solution that doesn't have a market or can't
be put into action. If this happens to be the case, you can
return to this step and restrategize to find a new fit for your
MTP.
For example, in the Airbnb illustration presented above, you

already have a great and inspiring MTP: making the world a
place where everyone can belong everywhere.
Now it's time to figure out what's stopping people from

achieving this. First, it may be that travelers can't enjoy the
local culture because most hotels don't make it easy for them
to do so. And then, on the other hand, there are just so many
places (houses, rooms, etc.) that people own but don't always
use for whatever reason they may have.
So, how do you tackle this with innovative technology? Well,

you can use technology to connect owners of places that are
in use with travelers looking to stay in local businesses so
that they can have a better or different experience than
staying in a hotel.
Now you've found a solution to a problem affecting the world.

This will help you reach your MTP.

Define your ExO Canvas
The next step is to start thinking about how to use the ExO
Attributes to connect your problem to the abundance already
there and solve your problem exponentially. To do this, we've
seen that going through all the ExO Attributes is the best way
to scale exponentially.
Remember that you don't have to use all the ExO Attributes,
but if you define the MTP and use at least four of them, your
chances of getting exponential growth go up.
For example, you can easily define the ExO Attributes of your
new exponential business model by using the ExO Canvas.
Airbnb's ExO Canvas is shown above. It is similar to the
example from the previous steps, and you will use it to keep
designing an exponential business model.
Define your BMC based on the

ExO Canvas
To grow fast, it's recommended that you use the exponential
business model (BMC), and it's crucial to remember that
service- and product-based business models require
expanding your operations and expenditures as your sales
volume does.
Some types of businesses may expand rapidly:
● Automation-based models: They rely heavily on

algorithms, which automate several fundamental
operations in order to provide value to consumers. For
instance, Google;
● Platform-based models: These software platforms act

as a go-between for delivering goods or services to
customers;
● Ecosystem-based model: This includes a group of

enterprises, services, and/or products that all
contribute to the same goal. A customer or user enters
the ecosystem as soon as they begin interacting with
any of these. To maintain a healthy ecosystem, it is not
required that every project be self-sustaining.
You can use any of the business models listed above, or you
can look for new business model trends in your field or in
other fields.
The ExO Canvas is a framework for achieving exponential

growth and maximizing an organization's potential.
Incorporating the SCALE characteristics into the company
model will facilitate its growth at an exponential rate.
To create an exponential business model, you must follow

these procedures, which include combining the Business
Model Canvas with the ExO Canvas:
Define the Customer Segment and the Value Proposition

blocks in the BMC
Keep in mind that you need to define a value proposition for
each client segment once you've given some thought to the
consumer segment block.
Check the Staff on Demand

Ensure that the essential things your staff does are reflected
in ExO Canvas's Staff on Demand section. The BMC should
identify the sort of persons or organizations that make up the
staff on demand and create a value proposition tailored to
this group of customers. The most important job will be to
take care of the system or app that lets ExOs send out
workers whenever they need to.

Check the Community & Crowd
Make sure everyone (customers, key partners, et cetera) on
your ExO Canvas has a place to connect and work together
to enhance the user experience and build stronger
relationships with your customers by checking the community
and crowd section. Making sure the adjustments in your BMC
reflect this can help keep expenses down.
Check the Algorithms

Look at the Algorithms section of your ExO Canvas and
consider whether tasks are now being handled by partners or
employees but may be automated instead. The price tag is
expected to go down as a result of this. Algorithms may also
be used to enhance or automate the value offered to certain
client groups. This should be taken into consideration while
creating your BMC.
Check the Leveraged Assets

Look at the ExO Canvas's leveraged assets, keeping in mind
that you won't be relying on them as essential resources
(because they don't belong to you), but rather gaining access
to them from other parties like business partners or certain
groups of customers.
Check the Engagement

In order to enhance your relationships with customers, users,
key partners, and suppliers, it is important to monitor the
engagement of your ExO Canvas.
Finish the exponential business model

Complete the exponential business model, making sure to
include all the necessary components and BMC building
pieces. As the BMC and the ExO Canvas complement one
another, you may repeat the procedures outlined above to
move back and forth between the two.

GROWTH AND THE
FLYWHEEL
A formidable new concept, the flywheel business strategy

has replaced the outdated funnel approach. The consumer is
at the heart of a three-stage cycle, each of which
corresponds to a different point in the relationship with that
customer.
As a customer becomes a regular, dedicated supporter of the

brand and a source of recommendations for new clients, the
company's primary goal switches to completely satisfying
them. The few firms that have created a really effective
flywheel are among the largest and most revolutionary in
history.
Examples of pre-internet flywheels are:
● The Telephone: Just imagine for a moment if no one in

the history of the world ever had a telephone. There's
no use in trying. That individual could reach nobody. In
contrast, the network's utility increased as telephone
usage grew;
● The yellow pages: In a similar vein, the Yellow Pages

grew in popularity and utility as more companies
signed on to be included in the book, which in turn led
to more individuals purchasing the book, which in turn
led to more businesses signing on to be included in
the book and purchasing advertising.
Examples of the internet age flywheel are:
● Amazon: The more people used Amazon as a

shopping destination, the more vendors entered the
ecosystem, which in turn increased both variety and
competitive pricing, which in turn attracted even more
shoppers;
● Facebook: In other words, when more individuals

joined, they encouraged their friends to do the same,
and the network grew and flourished as a
consequence;
● Uber: More and more people relied on Uber as more

and more drivers joined the network, which in turn
drew in even more people;
● Venmo: You could always count on your friends also

having Venmo, which greatly increased its use as a
P2P payment mechanism as its usage grew.
Creating a community is the first step in implementing

flywheel concepts in your organization.

CONCLUSION
The 5 core parts of a business model not only have the
potential to enhance any model, but also to set off a snowball
effect of exponential growth. An organic, low-cost customer
acquisition model, supercharged by a partner ecosystem,
high-margin products with a lean overhead and economies of
scale, and a problem solved for a large number of potential
customers all point to the possibility of building a true
exponential company.
Knowing how to take full advantage of this chance and

having the resources you need are just the beginning. When
you push your firm to the next level, the exponential growth
path necessitates that you test, prove, and fine-tune on the
fly.

REFERENCES
The following references were consulted to create this Super

Guide:
➔ https://newnormalgroup.com/stories/business-insig
ht/the-secret-behind-exponential-business-models
➔ https://www.forbes.com/sites/forbesbusinesscounc
il/2022/04/06/the-secret-to-exponential-business-
growth-the-flywheel/?sh=35d3eefcf53f
➔ https://hbr.org/2015/01/what-is-a-business-model
➔ https://singularityhub.com/2017/04/03/how-to-mak
e-an-exponential-business-model-to-10x-growth/
➔ https://ca.indeed.com/career-advice/career-develo
pment/exponential-growth
➔ https://sellersfunding.com/blog/linear-exponential-
growth-ecommerce/
➔ https://www.linkedin.com/pulse/future-series-busin
ess-exponential-vs-linear-hilda-lunderstedt
➔ https://www.basicbananas.com/linear-vs-exponenti
al-how-to-grow-your-business-exponentially/
➔ https://www.businessmodelsinc.com/en/inspiration/
blogs/shift-no-5-from-incremental-to-exponential-b
usiness-model
➔ http://blog.openexo.com/five-steps-to-designing-an

-exponential-business-model
➔ https://businessmodelanalyst.com/network-effects/
➔ https://www.wallstreetprep.com/knowledge/networ
k-effects/
➔ https://bernardmarr.com/the-10-best-platform-busin
ess-model-examples/
➔ https://bernardmarr.com/the-best-examples-of-sub
scription-business-models/
➔ https://unicornpayment.com/blog/subscription-mod
el-examples/
➔ https://ppcexpo.com/blog/freemium-model-exampl
es
➔ https://smallbusiness.chron.com/examples-automat
ed-business-systems-21194.html
➔ https://platforms.substack.com/p/ecosystem-busin
ess-models-a-teardown
➔ https://techjourneyman.com/blog/apple-ecosystem
-explained/
➔ https://medium.com/macoclock/the-apple-ecosyste
m-explained-c9dd6d00ec95
➔ https://medium.com/@jonnordmark/amazons-ecosy
stem-map-d25abcac9613
➔ https://www.linkedin.com/pulse/amazons-ecosyste
m-naive-overview-sushrut-sood-mba-ms-is?trk=arti
cles_directory
➔ https://mark-kalin.com/the-alphabet-inc-ecosystem/
➔ https://techjourneyman.com/blog/google-ecosyste
m-explained/
➔ https://www.arbelatech.com/insights-resources/blo
g/understanding-the-microsoft-ecosystem-and-its-a

dvantages-part-2.html
➔ https://technicaldrive.co.uk/microsoft-ecosystem
➔ https://www.arbelatech.com/userfiles/filemanager/
3w2ltfcxgv3yw7zjrp0u/
➔ https://blog.onefire.com/archive/10-examples-of-ex
ponential-growth-in-business
➔ https://www.businessmodelsinc.com/en/inspiration/
blogs/how-airbnb-s-exponential-business-model-w
orks
➔ https://www.linkedin.com/pulse/airbnbs-exponentia
l-business-model-now-yours-what-would-seda-evis
➔ https://businessmodelanalyst.com/airbnb-business-
model/
➔ https://businessmodelanalyst.com/uber-business-m
odel/
➔ https://www.feedough.com/wp-content/uploads/20
20/10/uber-business-model-2.webp
➔ https://businessmodelanalyst.com/paypal-business
-model/
➔ https://businessmodelanalyst.com/etsy-business-m
odel/
➔ https://thestrategystory.com/2022/09/03/how-doe
s-squarespace-work-and-make-money-business-m
odel/
➔ https://businessmodelanalyst.com/netflix-business-
model/
➔ https://businessmodelanalyst.com/amazon-busines
s-model/
➔ https://businessmodelanalyst.com/spotify-business
-model/

➔ https://www.forbes.com/sites/forbesbusinesscounc
il/2022/04/06/the-secret-to-exponential-business-
growth-the-flywheel/?sh=35d3eefcf53f

ABOUT THE AUTHOR
Daniel Pereira is a Brazilian-Canadian entrepreneur that has

been designing and analyzing business models for over 15
years. You can read more about his journey as a Business
Model Analyst here.
E-mail Daniel if you have any questions

at: daniel@businessmodelanalyst.com
You can connect with Daniel at Linkedin:
https://www.linkedin.com/in/dpereirabr/


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Exponential

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The Business Model Analyst is a website dedicated to

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This PDF File was purchased by Govindarajan - imgovind@live.com

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In recent years, there have been a lot of new ways for

This is because this strategy is predicated on the notion that

At its most fundamental level, exponential marketing is

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Using data-driven insights is one of the most crucial tenets of

This information may then be utilized to modify marketing

The utilization of various forms of technology is another

However, technology and data are not the only components

In this article, we will discuss the fundamentals of exponential

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This article will help you learn more about exponential

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Before we dive into the concept of exponential business

An enterprise's level of success is directly correlated to the

A business model is a complicated and multi-faceted

Among these components is the value proposition, which

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Another essential but difficult-to-pin-down aspect of a

Another aspect of a proper business model is revenue

However, regardless of the source, a proper business model

Another important aspect of a proper business plan is the

This includes a wide range of costs, some of which are fixed,

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A business model should also document and plan out the

For a business to successfully deliver its goods or services, it

A good business model can be a powerful and effective tool

A business model is also an important part of how investors

However, a business model is not set in stone, as it is also

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In the face of these hurdles, the only businesses that will be

So essentially, a business model is a construct that is both

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In recent years, there has been a shift in the way that

But what exactly does it mean for a company's business

An exponential business model is simply one that leverages

The use of automation, data analysis, and various types of

It is important to note that the capability to generate network

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As such, the capability to exploit data is yet another essential

In addition to concentrating on the production of products

These ecosystems are capable of quick scaling and

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Hence, the capability of an exponential business model to

This causes disruption in already established markets and

So at its core, the exponential business model is a new way

Hence, creating network effects, using data, and constructing

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So what is exponential growth?

Exponential growth is a type of growth that occurs when a

There are three formulas that can be used to calculate

● Formula 1: f(x) = abx

● Formula 2: f(x) = a (1 + r)x

In these formulas, the initial value is represented by a or P0,