Three types of business models you should consider for your business

A business model can be the difference between creating a world changing business that can starve off competition and staying ahead of trends, and a business that is mediocre at best. Furthermore, and it doesn’t always have to be original.

Although not the most imaginative way to come up with a business model, copying successful models in certain industries and tweaking them to fit your business is one of the best ways to do it.For instance Uber, the first mover who came up with the model of hailing rides through a phone app has been overtaken in key markets like Southeast Asia, where they have sold their business to competitor Grab.

Additionally,Uber’s model has inspired several variations the world over, to solve the safety issues. For instance, the duo of Canadian Barret Nash and Kenyan Peter Kariuki, adapted the Uber business model of hailing rides through a mobile phone app to birth SafeMotos- an app for hailing motorcycle rides.

For example, to solve the safety issue of motorcycle rides, the duo of Canadian Barret Nash and Kenyan Peter Kariuki, adapted the Uber business model of hailing rides through a mobile phone app, to birth SafeMotos- an app for hailing motorcycle rides.

The difference between their service and that of Uber (aside from cars vs motorcycles) is that SafeMotos focuses on safety. The app collects data in relation to the riding behaviour-deceleration and acceleration speeds of riders etc. This information is then used to rank the rider in terms of safety and customers are connected to safest motorcycle riders.

  • Free model

This business model comes in variations that depend on the aim of the business and the type of customers served. For instance, the donation variation gives clients access to a product for free and with the option of donating to the company e.g. Mozilla Firefox is free but accept donations.

Another variation of the free model is the free-for-some model, where there are several layers of customers and beneficiaries-some pay and while others receive the service for free.  A great example is Tommy Shoes, who sell shoes in developed countries at a higher price and then, for every shoe bought another pair is given out for free to poor communities.

Community advertising model

Central to this model is the ability to build a targeted or large community of people online and then attract advertisers to pay in order to reach your audience. This is the model used by Facebook (large audience), LinkedIn (large and targeted business audience), and blogs (small but targeted audience).

This model can only work if the community is large enough, targeted-interested in the same things and there is availability of data; to track their engagements in order to convince advertisers that their spending is worthwhile.

Pay-as-you-go model

This particular model is gaining traction in Africa due to its ability to allow people from poor economic backgrounds to access services or products that would otherwise be too expensive. Additionally, it also reduces waste and increases transparency, a business that uses this model well in Kenya is M-kopa.

Mkopa customers are supplied with solar lighting systems that they can start using immediately they receive them, and then continue making regular payments until the debt is fully settled.However, failure to pay the installments will result in power disconnection.

Another notable mention using the pay-as-you-go model is HydroIQ which uses smart meters on water pipes to allow customers to only pay for the water they’ve consumed-bills are calculated based on the water that passes through the smart meter. Additionally, the HydoIQ system monitors water quality and leaks, sending all this information online and allowing consumers to monitor their water use from wherever they are.

Business models are diverse and can evolve to meet the needs of the clients, additionally business modelling can also be applied at various level of the business e.g. revenue sharing model used by companies like Google to share advertising revenue with website owners. To find a successful business model , observe, adapt and innovate.

How to leverage on the business model canvas to have an edge


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