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Disruptive Business Models

Creative entrepreneurs bring disruption to the marketplace. Ultimately, this benefits the customer most. As an entrepreneur, you need to be aware of some of the innovative business models that exist out there. These models have challenged the status quo by being more efficient, meeting the customer needs better or by completely rewriting the rules.

The 3 business models currently turning the traditional models upside down are;

  1. De-materialized Services
  2. Collaborative Consumption
  3. Made-to-Order

De-materialized Services

This simply refers to a situation where the product sold is not physically present at the point of consumption. Think of music streaming for example. This model makes it possible for the entrepreneur to sell more without the need to produce more. Cloud computing and online file storage are examples of big business today applying this model. For an entrepreneur seeking to scale up rapidly in many markets, this is an excellent model.

The world is already moving towards a dematerialised state. We buy things without having cash. There’s millions of pages on kindles everywhere of books that have never run a page off the press. Profound isn’t it? Can you take advantage?

Collaborative Consumption

Consumerism is undergoing a massive transformation at the speed of light it seems. Bartering, trading, renting, swapping are happening at a larger scale and the technology is making them even more disruptive. This already killing old business models and creating a new peer to peer kind of market place.

In New York they have had to legislate against AirBnB, a portal that connects people with an extra bed/room and travellers seeking accommodation. Carpooling and ride shares are already emerging as major threats to taxis businesses world over and ladies can now swap dresses online. The disruptive collaborative world is an opportunity to be seized. Even business funding is now collaborative thanks to the likes of kickstarter and rockethub.

Made to Order

“Any customer can have a car painted any colour that he wants so long as it is black”

Henry Ford’s Remark about the Model T in 1909.

The new economy needs business to business to adopt more innovative business models. Businesses can now provide every customer with a customer with a product that is made to order. Minimising wastage and improving customer loyalty.

Customers especially those that pay a premium do not want to be part of the crowd. Then profit margins for made to order products are many times the margins of the standard products and the brand loyalty is always almost 100%. For the creative entrepreneur, this is the perfect reward for their skills.

The oldest practitioners of the made to order model are tailors. However this model has moved out of fashion and is being applied to different industries ranging from engineering, software and computer hardware. As a matter of fact, Dell’s success in the last decade is due to the company’s pioneer made to order PC’s. With the onset of 3D printing, who knows how far this will go?

In the end, a business model is just the architecture that enables an entrepreneur to create products, market and interacting with customers in order to generate revenue.

A business model should suit your product and circumstances. It must deliver value for your customers and generate revenues for you.

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