Are you considering launching a business? Or perhaps you’re studying for an MBA and you’re part of the way through business school and pondering your options once you graduate. It’s such an exciting time planning to launch a startup, acquire a franchise or otherwise launch a new business venture. Those successful in the business world can reach limitless heights of wealth; look at Amazon, Meta, Google and other tech companies that started in garages or dorm rooms in colleges.
However, every successful business needs a rock-solid business model or a way to generate revenue and profit. With a good business model, you might reach the peaks of success that running a business can offer. This helpful article will share the magic of a business model and which successful companies you could learn a thing or two from. Continue reading to learn more.
Uber
The largest rideshare company in the world has a recipe for success, and that’s that they don’t own any cars. Instead, they rely on their drivers to purchase or lease their vehicles, and they make their profit off the app service that connects drivers with passengers. This was a significant disruption to the taxi, chauffeur, and limousine sectors, as Uber barged in with an innovative model and reached wild success. The company has also diversified into food delivery, grocery delivery, package delivery, and more.
Airbnb
In a stellar business model that is very similar to Uber, the biggest accommodation provider in the world – Airbnb – does not own any property at all. Airbnb does not rent the accommodation from the host but acts as the go-between, only connecting accommodation supply and demand. Their business model builds on the gig/ride-sharing economy but transposes it into holiday stays and on the solid belief (that proved correct) that house owners are willing to rent out free space to strangers to stay for holidays or even work trips.
Freemium Businesse
What is freemium? This innovative business model generally involves offering a basic version of a product or service for free but charges users an ongoing subscription fee if they want to access premium features, which are locked behind the paywall. Examples include Spotify, YouTube, Dropbox, LinkedIn, and Zoom. All of these services offer a free, basic service but with limited functionality, which you then pay to access the top range features, such as listening and watching how you want, without ads, more storage, and other premium features.
Workplace productivity and utility software providers also frequently use this freemium model and then offer individual or corporate-wide licenses to users who want to unlock the full feature set without limits. Some examples of this include Trello, Asana, and Monday. This freemium business model is also popular with video game publishers, who use a free version to get players addicted before enticing them to either take out a subscription or buy individual features or game upgrades.
Aggregator Websites
These are helpful websites that scrape data, products, and service offerings from the web and present them to consumers in a nifty comparison format. This is a good business model because these sites don’t sell anything; they present the services or products and often earn their money from referral links to different companies. For instance, some aggregator platforms will help consumers choose products and services such as insurance, telecommunications or internet service providers, financial services, and other essential consumer services. Some key examples of successful aggregator companies in the USA include The Zebra, NerdWallet, Progressive, and Policygenius.
Budget Airlines
Air travel is often associated with luxury, with top brands like Emirates and Etihad offering a premium service with a high associated cost. However, an excellent business model is on the other end of the spectrum. Budget airlines offer air travel at a lower cost for a basic ticket that gets you to your destination. However, many of them will charge fees for additional services and products as you fly. They will charge for meals, premium seating, extra baggage allowances, and other aspects of your jet trip that people happily pay for to get themselves an upgrade. Some successful budget airlines that offer this model are JetBlue, Breeze Airways, Spirit, and Ryanair.
Bundling Business Models
Suppose a company is worried about the cost of attracting single customers, such as marketing, advertising, onboarding, and retention. In that case, it may attempt to bundle products to sell multiple goods or services to a single customer. Bundling capitalizes on existing customers by attempting to sell them different products, so the return on investment for the single customer is much higher. A company might offer discounts for multiple services provided. A vital example of this is successful telecommunications companies like AT&T.
Marketplace Business Model
Marketplace businesses are simple: in exchange for hosting a platform for business to be conducted or for individuals to buy and sell goods, the marketplace receives compensation as a percentage of the sale price. Although transactions could occur without a marketplace, this business model attempts to make these transactions easy, safe, and secure. A key example of this is eBay and Amazon, allowing third-party sellers to sell on their platforms
In Conclusion
This informative article has shared all about the magic of a business model and successful companies you can learn from as you embark on your business journey. You’ve learned about successful companies like Airbnb, Uber, and Spotify, as well as the different business models they employ, such as Freemium, Aggregator, and other types of business models by various successful companies.
