Gennaro Cuofano's Blog, page 103

Legal Tech Startups

As the name suggests, legal tech startups are those that utilize technology to optimize or provide various legal services. 

Technological applications are now standardizing or automating many of the labor-intensive tasks performed by lawyers. Technology is also providing additional layers of security for sensitive legal documents and reduces the costs and complexities of legal services in general.

According to market research company Statista, the legal tech industry is expected to be worth approximately $25.17 billion by 2025, so let’s take a look at the startups vying for a slice of this lucrative pie.

Relativity

Relativity is a Chicago-based company that offers legal and compliance software. Lawyers use Relativity products to automate contract reviews, index and search documents, and perform regulatory or due-diligence work. 

Relativity’s tech stack is used by more than 13,000 organizations around the world. In the United States, it is used by 199 of the top 200 law firms by revenue.

Luminance

Luminance considers itself to be the provider of the world’s most advanced AI-powered legal process automation products. 

The artificial intelligence, which was developed at the University of Cambridge, can read and conceptually understand legal documents in virtually any language. With this understanding, it can identify contractual anomalies or areas of non-compliance. 

Some of its notable clients include Tesco, Deloitte, Avianca, and Ferrero.

Avvoka

Avvoka is a legal tech startup with a cloud-based system that offers analytics and negotiation tools and the automation of specialized documents. In addition to law firms, the system is designed for in-house legal teams and businesses that want to close deals more efficiently by signing legal contracts online.

Avvoka is currently used by Warner Brothers, HSBC, and Baker McKenzie, to name a few.

Ironclad

Ironclad is a contract management software provider that allows companies to transform their contracts from blockers to enablers. In fact, the company claims its software can cut contract processing time by up to 80%.

Ironclad’s contract lifecycle management (CLM) software is the only such product that addresses the complexity and risk associated with clause-level negotiation and collaboration. Some of the companies to take advantage of this feature include Reddit, Dropbox, and Mastercard. 

Notarize

Notarize was founded in Boston in 2015 and is a little different from the other legal tech startups featured in this article.

The company acts as an on-demand notary service for businesses, title agents, and lenders. Notaries are available 24/7 via computer, tablet, or smartphone for as little as $25. A full forensic analysis of the transaction is provided which comprises an audit trail and ID verification.

Key takeaways:Legal tech startups are those that utilize technology to optimize or provide various legal services. The industry is predicted to be worth $25 billion by 2025.Relativity is a Chicago-based company that offers legal and compliance software with over 13,000 clients and 199 of the top 200 law firms in the United States. Luminance is a provider of AI-powered legal process automation products with clients such as Deloitte and Avianca.Cloud-based Avvoka offers a solution for negotiation, analytics, and the automation of specialized documents. Notarize is a Boston-based legal tech startup that provides notary services for businesses, title agents, and lenders.

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DMAIC Process

The DMAIC process is a data-driven improvement cycle for optimizing and stabilizing business processes and designs. 

Understanding the DMAIC process

Fundamentally, the DMAIC approach exists to bring structure to process improvement and problem-solving. Indeed, it may be used to implement a new process or improve an existing process. Every such initiative is underpinned by data collection, which makes it possible to determine whether results have improved and to what degree.

The DMAIC process is often associated with Six Sigma projects, though it is by no means limited to lean manufacturing. DMAIC is effective in many quality improvement projects, such as improving employee and customer satisfaction or launching a new product or service.

The five steps of the DMAIC process

DMAIC is an acronym of five interconnected and sequential steps:

Define (D) – firstly, the problem, improvement activity, project goals, project team, and customer requirements must be identified. Tools used in the first DMAIC step include stakeholder analysis, voice of the customer matrix, or high-level process map like a SIPOC diagram.Measure (M) – this step involves data collection to establish the baseline upon which subsequent performance improvements will be measured. What should be measured and how should it be measured? Useful tools include 6S, value stream maps, and detailed process mapping.Analyze (A) – here, potential problem root causes are identified and validated with a root cause analysis. What is the magnitude of their contribution to the problem? Ideally, the team will have a list of potential root causes to investigate further. These may be derived by using a failure mode and effects analysis, cause and effect diagrams, or simple brainstorming.Improve (I) – the purpose of the improve step is to identify, test, and implement a solution that eliminates a root cause. It’s important to focus on the simplest and easiest answers – there is no need to reinvent the wheel. Solutions can be tested using the PDCA cycle.Control (C) – in the final step, the project team ensures the solution is a viable long-term fix. They must ensure the problem does not reoccur by devising a monitoring plan to track the success of the improvement. Initiatives must then be incorporated into standard operating procedures. Once this has been achieved, the business may find value in implementing the solution in a similar project or process.Benefits of the DMAIC process

Aside from improving projects and processes, DMAIC has many other benefits:

Discipline and structure – the DMAIC process is a highly structured approach that lets a business think through a problem systematically. This saves it from implementing a solution before verifying whether it is likely to be successful, which can be financially costly and sometimes exacerbate the problem.Improvement control – the fifth and final control step is also seen as an important benefit of the methodology. In some instances, the project team discovers a solution but cannot implement it properly because of inadequate time, money, or buy-in. DMAIC favors a strict and comprehensive control phase to identify a set of best practices likely to result in long-term success.Reduced operating costs – operational costs and associated risks are a major expense for many global companies. When combined with Six Sigma principles, DMAIC reduces operating costs while minimizing risk. These savings are instituted by shorter, standardized processes with fewer touchpoints, hand-offs, reworks, failures, and other non-value adding activitiesKey takeaways:The DMAIC process is a data-driven improvement cycle for optimizing and stabilizing business processes and designs. The process exists to bring structure and clarity to problem-solving.The DMAIC process is an acronym of five sequential steps: define, measure, analyze, improve, and control. The DMAIC process encourages businesses to avoid implementing a solution before it has been properly verified. The methodology also ensures the solution is a viable long-term fix and reduces operating costs and risk.

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VAK Learning Styles Model

The VAK learning styles model is a simple way to explain and understand various learning styles.

Understanding the VAK learning styles model

The VAK learning styles model was developed by child psychologists such as Fernald, Keller, Orton, Gillingham, and Montessori beginning in the 1920s.

The model suggests every person’s learning style is a combination of auditory, visual, and kinesthetic (tactile) stimuli. No single style is the better than the rest, with each individual incorporating multiple stimuli depending on their strengths, learning preferences, and the situation at hand. However, the model does acknowledge that in general, learners gravitate toward a single and dominant style over time.

Classical thinking also suggests predominant learning styles change as the individual grows older. During pre-school and early primary school, learning occurs via kinesthetic stimuli. In middle school, the style is more visual. In high school, university, and adulthood, information is presented using auditory means.

The VAK learning styles model provides a simple framework for assessing someone’s preferred learning style. Using this information, learning methods and experiences can be designed and tailored to the particular needs of the individual.

The three stimuli of the VAK learning styles model

Here is a look at the three learning styles and how they assist in learning:

Auditory – these learners are the sort of people who talk to themselves by moving their lips and reading out loud. With a preference for sound, they may have difficulty learning by reading or writing. Instructors can cater to this learner by following the old adage of “tell them what they are going to learn, teach them, and then tell them what they have learned.” Auditory activities such as brainstorming, buzz groups, and quizzes can also be used.Visual – for visual learners there exists two sub-categories – linguistic and spatial. Visual-linguistic learners prefer reading and writing tasks and can memorise written information readily. Visual-spatial learners have difficulty with written words, instead preferring videos, charts, live demonstrations, and other visual cues. Learning for these types is facilitated by the individual visualising faces and places and concocting stories with their vivid imaginations.Kinesthetic – these learners perform best when touching and moving. Here, there are also two sub-categories: kinesthetic (movement) and tactile (touch). Kinesthetic learning is a little more difficult to describe and cater for. When attending lectures, these individuals may take notes simply to get their hands moving. Similar activities that encourage movement are picture drawing, doodling, and the highlighting of important passages. While reading, they also like to scan the information first before delving into the finer details. Given their preference for movement, kinesthetic learners also appreciate regular exercise breaks and intermissions. Younger, more tactile learners can also be helped by offering them props such as coloured pens, play-dough, and soft or brightly-coloured rubber balls.Key takeaways:The VAK learning styles model is a simple way to explain and understand various learning styles. It was developed by several child psychologists in the 1920s.The VAK learning styles model provides a simple framework for assessing someone’s preferred way of learning. Using these insights, tailored learning experiences can be designed to maximise information retention.The VAK learning styles model is based on three categories of stimuli: auditory, visual, and kinesthetic. One individual can exhibit a preference for any style depending on the context. However, most people tend to gravitate to one dominant style over time.

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A3 Problem Solving

A3 problem solving is a lean management approach to problem-solving to encourage learning, collaboration, and personal growth amongst employees.

Understanding A3 problem solving

The A3 process was first developed by Toyota and its tendency to use a single piece of A3 paper to outline ideas, plans, and goals relating to problem-solving. Although not attributable to a single person, the approach is a hybrid of the PDCA cycle and Toyota’s philosophy of making things visible.

By using a sheet of paper 11 x 17 inches in size, it forces teams to be concise and collaborate effectively on the information they want to include. This makes potential solutions more understandable and thus easier to digest across all levels of the organization. 

Implementing A3 problem-solving in practice 

While the exact components of each A3 sheet vary, most include the following seven steps as a minimum:

Define and clarify the problem.Define the current situation. At Toyota, problem solvers observe the problem occurring in work processes firsthand and transfer these observations to a whiteboard. If possible, the size of the problem should be quantifiable. For example, Toyota may quantify the number of chassis manufacturing defects per month.Implement a root cause analysis. The introspective 5 Whys analysis is a simple yet thorough means of identifying the most basic reasons for a problem.Brainstorm countermeasures. These are simply ideas for addressing the root cause. The most effective countermeasures will have the desired outcome clearly defined and a plan for achieving it. They will also designate specific staff to carry out the measures.Define a target state. A core component of A3 problem solving is communicating a target state through a process map. In other words, the optimum state a business wants to achieve in the form of a goal. To attain the goal, all relevant changes must clearly be defined on the process map.Develop an implementation plan. With the target state defined, it’s now time to define how it might be achieved. Each countermeasure should have an accompanying task list and denote who is responsible for carrying it out. All time-sensitive tasks should also be documented here.Create a follow-up plan with ideal outcomes. If actual results differ from the predicted results, the problem solvers should go back to the beginning of the process. Positive outcomes should also be incorporated into standard operating procedures and communicated to the relevant staff.Benefits of A3 problem solving

The primary benefit of A3 problem-solving lies in its simplicity. 

It encourages employee buy-in since the problem is communicated in a way that most can understand. It also increases corporate culture as employees across various departments share knowledge and work collaboratively to improve process efficiency.

Indeed, businesses can similarly adopt the Toyota ethos of visibility to advertise success throughout the company which itself is a result of empowering employees to solve critical problems.

Key takeaways:A3 problem solving is a collaborative approach to problem-solving confined to the size of a sheet of A3 paper.Most iterations of A3 problem solving include seven basic steps that document how a business defines a problem, identifies solutions, and then monitors solutions through goal setting and follow-up plans.Businesses who adopt A3 problem solving enjoy several benefits, mostly related to healthy company culture and a commitment to improving processes.

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Schramm Communication Model

The Schramm communication model regards communication as a two-way, cyclical process between an encoder and a decoder.

Understanding the Schramm communication model

The Schramm communication model was created in 1954 by Wilbur Schramm, widely considered to be one of the pioneering founders in the field of communication studies. 

Schramm took inspiration from psychologist Charles Osgood, who thought communication to be a cyclical (and not linear) process. For this reason, Schramm’s model is also known as the Osgood-Schramm model of communication.

Schramm suggested communication was a cyclical, two-way process where the sender and receiver each take turns to send and receive messages. He also believed the flow of information around this cycle could only be maintained if both individuals understood what the other was saying.

If the receiver cannot comprehend the information being sent to them, communication breaks down. The communication cycle is not completed until the sender gets feedback from the receiver that their message has been successfully interpreted.

The five components of the Schramm communication model

To better explain this process, Schramm identified five components of two-way communication:

Sender (encoder) – the person sending the message. For effective communication to take place, the sender must encode the message so it can be understood by the receiver. This means ensuring the message is relevant, essential, precise, clear, and legible.Receiver (decoder) – the person receiving the message who must decode it by using reading, listening, or interpretive skills. Decoding helps the receiver make sense of the information being conveyed to them. The receiver is sometimes called the interpreter because they work to analyze and understand the message. Communication can be hindered when the receiver misunderstands or misinterprets the message sent to them. Typically, this occurs in communication between two people from different backgrounds, skillsets, cultures, or languages. Message – or the communication passed from the sender to the receiver. It may take the form of text, audio, video, or a combination thereof. In some cases, the message may be communicated non-verbally using body language or facial expressions.Feedback – where the receiver sends information back to the sender based on the message they received. When feedback occurs, the sender and receiver switch roles and the process repeats until the communication ceases. Feedback can be verbal or non-verbal and plays an important role in effective communication. If the receiver is unable to understand the sender, they use feedback to ask the sender for a more simplified or comprehendible message. Semantic noise – or any interruption during the communication process that disrupts the message being sent. Noise may dilute or alter the meaning of a message which results in misinterpretation and is typically auditory. For example, communication may be hindered by a plane passing overhead or a loud television.Key takeaways:The Schramm communication model regards communication as a two-way, cyclical process between an encoder and a decoder. It was created in 1954 by Wilbur Schramm who based the model on the work of psychologist Charles Osgood.The Schramm communication model argues communication is a two-way process where a sender and receiver each take turns sending and receiving messages. Information flow is continuous and cyclical so long as messages are properly interpreted during each cycle.The Schramm communication model identifies five components that help explain the communication process. These include sender, receiver, message, feedback, and semantic noise.

Read Next: What Is A Linear Model Of Communication?

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Who owns Gucci?

Gucci is a luxury fashion house based in Florence, Italy, which sells products such as footwear, perfumes, makeup, ready-to-wear, and home décor. 

Gucci was founded in 1921 by Guccio Gucci, with their son Aldo Gucci responsible for making the family-owned company a brand recognized all over the world. The first American store was opened in New York City in 1953, with showrooms then opened in London, Paris, and Florida over the next decade or so.

As of December 2021, Gucci operated a total of 501 stores around the world with estimated global revenue totaling €9.73 billion. The company also celebrated 100 years in business in 2021 with new collections based on its most celebrated designs.

Gucci ownership structure

When Guccio Gucci passed away in 1953, three of his five sons received shares in the company – Aldo, Rodolfo, and Vasco. When Vasco passed away in 1974 and Rodolfo in 1983, Gucci was owned by surviving brother Aldo and Rodolfo’s son Maurizio. 

In the 1980s, Maurizio and Aldo Gucci became involved in protracted battles over who would assume majority ownership of the company. Maurizio ultimately took control of Gucci after Rodolfo was sentenced to a year in prison for tax evasion. In 1988 with the company in financial difficulty, he sold approximately 48% of Gucci to Bahrain-based investment firm and Tiffany owner Investcorp. The rest of Gucci was sold to Investcorp in a 1993 deal with around $200 million.

Under new leadership in the late 1990s, Gucci’s reversal in fortunes saw Prada take a 9.5% stake. Bernard Arnault, chief of luxury conglomerate LVMH, also accumulated a sizeable holding of 34% and then acquired Prada’s stake before an unsuccessful takeover bid.

To escape from LVMH’s control, Gucci reached out to French financier François Pinault and his multinational corporation Pinault Printemps Redoute – now known as Kering. The corporation purchased a 44% stake in Gucci in 1999 which diluted LVMH’s controlling interest in the process. The deal resulted in a long and expensive court battle between Kering and LVMH as both companies tried to wrestle control of Gucci.

Kering would prove to be the victors of this battle and completed their buyout of Gucci in an $8.8 billion deal in 2004.

Key takeaways:Gucci is a luxury fashion house based in Florence, Italy, which sells products such as footwear, perfumes, makeup, ready-to-wear, and home décor. Gucci was founded in 1921 by Guccio Gucci, with son Aldo Gucci responsible for making the family-owned company a brand recognized all over the world.Gucci was family-owned until 1988 when financial difficulties caused the company to be sold to Bahrain-based investment firm Investcorp. Gucci was then progressively sold off to LVMH who then initiated an unsuccessful takeover bid.French multinational Pinault Printemps Redoute took a controlling stake in Gucci to arrest control from LVMH, which resulted in a long court battle that it would ultimately win. The multinational, now known as Kering, completed its purchase of Gucci in 2004.

Read Also: What are the LVMH subsidiaries?, Bernard Arnault Empire: LVMH Group Business Model, How Does Tiffany Make Money?

Read Also: Successful Types of Business Models You Need to Know.

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Lula business model

Lula is a subscription delivery service that was founded by Adit Gupta and Tom Falzani. The company, which recently raised $5.5 million in seed funding, allows convenience store owners to list their inventory for local delivery. 

The idea for Lula came after Gupta’s family-owned convenience store in New Jersey closed because of the pandemic. Gupta and Falzani tried unsuccessfully to get the store featured on delivery apps for a few weeks, but could not make it work. The pair then realized there was a need in the market for an instant, scalable delivery service that did not require the micro-fulfillment centers that many such apps utilize.

In the following sections, we will delve into the business model of this exciting new startup which is currently run by a small team of just eight full-time and seven part-time employees.

Evolution of the Lula business model

The initial business model involved hiring local, eco-conscious drivers who owned carbon-neutral forms of transportation such as electric cars, scooters, and bikes. This model was also focused on collecting a subscription fee from the customer.

The model then evolved with an app listing the inventory of local stores and orders fulfilled by third-party services such as Uber Eats, Postmates, and DoorDash. Lula also sends each store sustainable packaging and a tablet to receive orders. 

Note that Lula’s business model does not incorporate commissions. Instead, local stores pay Lula a subscription fee of between $50 and $99 per location per month with each compensated for purchases made within the app. Aside from delivery, the app also takes care of account management, marketing, and customer service.

In essence, Lula is targeting smaller businesses such as convenience stores, gas stations, pharmacies, pet stores, liquor outlets, and even cannabis stores that were traditionally underserved by third-party delivery platforms. In an interview with TechCrunch in February 2022, Gupta believed there were 150,000 such stores in the United States alone.

Future aspirations

Lula is currently available in 31 states with plans to expand into all 50 states and acquire 2,000 new customers in 2022. The company is also in talks with convenience store chains in locations such as Europe and Mexico.

The seed round of funding will allow the company to make senior-level hires in the Philadelphia area where Lula began. Gupta and Falzani will also use the capital to hire Drexel University students, with both co-founders former Drexel students themselves.

Key takeaways:Lula is a subscription delivery service that was founded by Adit Gupta and Tom Falzani. The company allows convenience store owners to list their inventory for local delivery by a third-party courier.Lula operates under a subscription-based business model where it sells access to a business solution for small convenience stores. Third-party couriers take care of delivery, while Lula offers account management, marketing, and customer service.Lula intends to serve the more than 150,000 convenience stores across the United States, a market traditionally overlooked by delivery platforms such as DoorDash, Uber Eats, and Postmates.

Case Studies: DoorDash, Uber Eats, Postmates.

Read Next: Business Models.

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Who owns Blue Origin?

Blue Origin is an aerospace equipment manufacturer headquartered in Kent, Washington, and founded by Jeff Bezos in 2000. The company also sells sub-orbital spaceflight services.

Bezos started Blue Origin because he saw a future where millions of people would live and work in space to preserve the Earth. For humanity to survive, in other words, Bezos believed that it was important to find alternative sources of materials and energy in space so that harmful industries could be moved off-planet.

Today, Blue Origin is one of a host of companies in the civil, commercial, and defense spaceflight industries such as Virgin Galactic, SpaceX, and Axiom. Although the company provides rocket engines and related technology to clients, it is perhaps best known for its New Shepard rocket and spaceflight system for commercial passengers. The first crewed mission with Bezos, his brother Mark, and two other individuals launched on July 20, 2021. Two subsequent missions took place in 2021, with each astronaut experiencing around three minutes of zero gravity at an altitude of 340,000 feet.

Blue Origin ownership structure

Blue Origin is wholly owned by Jeff Bezos, with the Amazon founder stepping down from his role as that company’s CEO in February 2021 to devote more time to building rockets, among other things.

Bezos had become enamored with space as a child and had expressed an interest at 18 to build space hotels and amusement parks for millions of people that would orbit the Earth. Sometime in 1999, he discussed the idea of starting a space company with American fiction writer Neal Stephenson after witching the rocketry-inspired film October Sky.

Blue Origin remained more or less silent for the first fifteen years of its operation as Bezos and his team worked to refine their propulsion systems and launch vehicles. During this period, the only possible clue to the billionaire’s intentions was his acquisition of a 30,000-acre ranch in Texas which would later serve as the operational base of the company.

While Bezos remains the sole owner of Blue Origin in 2022, the CEO of the company is Dr. Robert H. Smith – a former Honeywell Aerospace executive with a formal education in aerospace engineering and mathematics.

Key takeaways:Blue Origin is an aerospace equipment manufacturer headquartered in Kent, Washington, and founded by Jeff Bezos in 2000. The company also sells sub-orbital spaceflight services.Blue Origin is one of multiple companies in the civil, commercial, and defense spaceflight industries such as Virgin Galactic, SpaceX, and Axiom. Although it provides rocket engines and related technology to clients, Blue Origin is perhaps best known for its New Shepard rocket and spaceflight system for commercial passengers.Blue Origin is wholly owned by Jeff Bezos, with the Amazon founder stepping down from his role as the eCommerce company’s CEO in February 2021 to devote more time to building rockets. Former Honeywell Aerospace executive Robert H. Smith is the current CEO of the company.

Read Also: Business Models.

Read next: 

How Amazon Makes Money: Amazon Business Model in a NutshellWhat Is the Receivables Turnover Ratio? How Amazon Receivables Management Helps Its Explosive GrowthAmazon Case Study: Why from Product to Subscription You Need to “Swallow the Fish”What Is Cash Conversion Cycle? Amazon Cash Machine Business Model ExplainedWhy Is AWS so Important for Amazon’s Future Business Growth?

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How does MoneyLion make money?

MoneyLion is an American neobank headquartered in New York City and founded in 2013 by Chee Mun Foong, Dee Choubey, and Pratyush Tiwari. The mobile and web-only platform offers credit building loans, investing, cash advances, and banking services.

Foong was inspired to create MoneyLion while performing research at an artificial intelligence (AI) lab at Purdue University in West Lafayette, Indiana, USA. Prior to this, Foong had started another company called Simulex which had a core focus on the commercialization of human behavioral models. 

Simulex was ultimately sold to a defense contractor in the United States, with Foong then co-founding MoneyLion with Choubey and Tiwari to use similar AI models in the consumer finance industry. At a time when the market was starting to emerge from the GFC, the co-founders observed that the big banks were abandoning millions of middle-class Americans. Moving forward, MoneyLion would provide access to private banking functionality to this underserved group.

Today, MoneyLion has around 2.7 million customers with the company going public via a SPAC merger in September 2021. Around the same time, MoneyLion introduced a new cryptocurrency trading feature with a $1 million prize on offer for those who registered for a new account.

MoneyLion revenue generation

MoneyLion’s core product is a low or no-fee account that allows customers to save, invest, bank, or borrow. The company also makes money from its premium mobile banking solution, investment platform, cash advance facility, and credit builder.

Let’s look at these in more detail below.

Premium mobile banking

The MoneyLion premium mobile banking option is called RoarMoney and comes with many perks. These include fee-free withdrawals at over 55,000 in-network ATMs and early access to direct deposit paychecks.

MoneyLion charges $1 per month for this service as an administration fee, with out-of-network ATM withdrawals attracting a fee of $2.50. 

Cash advances

MoneyLion also offers a cash advance facility called Instacash with zero fees for standard delivery within 24-48 hours.

For those who want their money in a matter of minutes, fees are charged based on the amount of money requested. A cash advance of $20 attracts a fee of $1.99 for RoarMoney account holders and $2.99 for those with an external debit card. For a cash advance of $100, on the other hand, there is a $5.99 fee for RoarMoney account holders and a $7.99 fee for external debit cardholders.

Managed investment account

MoneyLion also offers a selection of automated ETF investment portfolios based on a consumer’s risk appetite. Portfolios can also take on a tech, innovation, or corporate social responsibility theme if desired. 

A monthly account fee for this service is collected based on the total funds under management:

For accounts up to a value of $5,000, the fee is $1 per month.For accounts up to a value of $25,000, the fee is $3 per month.For accounts over $25,000, the fee is $5 per month.Credit building loans

Credit building loans help a consumer boost their credit score with small principle amounts that are paid off over 12 monthly installments. Note that the funds a consumer pays towards the loan will be available to them as savings once the loan term ends.

MoneyLion’s Credit Builder Plus Membership is charged at $19.99 per month, with the loan APR varying from 5.99% to 29.99%. Loans are available for amounts between $500 and $1,000.

Customers can also have their RoarMoney and investment account administrative fees refunded if they take out a loan.

Cryptocurrency

MoneyLion Crypto gives customers access to Ethereum and Bitcoin trading, with additional currencies expected to be added in the future.

The company makes money on the spread when cryptocurrency is converted to dollars.

Key takeaways:MoneyLion is an American neobank headquartered in New York City and was founded in 2013 by Chee Mun Foong, Dee Choubey, and Pratyush Tiwari.MoneyLion’s core product is a low or no-fee account that allows customers to save, invest, bank, or borrow. Revenue is bolstered with a premium mobile banking product and cash advance fees for customers who want their funds delivered in minutes.MoneyLion also makes money from investment account management fees. Furthermore, the company collects a monthly fee and loan interest on its credit builder loans.

Read Next: Business Models.

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Amway Business Model

Amway, a contraction of “American Way”, is a company with a core focus on the sale of home care, beauty, and health-related products. It was founded in 1959 by Jay Van Andel and Richard DeVos, school friends who had started several business ventures together.

Amway sales reached $8.5 billion in 2020, with 80% of the company’s 100 worldwide markets experiencing growth despite the COVID-19 pandemic. With that in mind, let’s take a look at the business model of Amway and the reasons for its success.

Multi-level marketing

Amway is primarily a multi-level marketing (MLM) company where goods are sold to distributors and salespeople. There are two core components of the Amway business model:

First, an individual is recruited by a distributor.Once recruited, the individual becomes a distributor themselves, which the company calls an Independent Business Operator (IBO). IBOs can purchase Amway products at wholesale prices, sell to consumers, and sponsor new distributors. For these privileges, Amway charges a registration fee.

While the company has been associated with Ponzi schemes for much of its existence, it’s important to note the differences between these scams and Amway’s MLM strategy.

In a Ponzi scheme, for example, the individual on top of the pyramid makes more money than everyone else by referring new people. In Amway’s business model, an individual down the pyramid can earn more than someone above them. Indeed, the amount of income is not based on referrals but on how hard they work and how many products they sell.

Other characteristics of the Amway business model

The profitability of Amway’s MLM model is helped by the following characteristics:

IBO flexibility – independent business owners can make money in several ways. The most obvious way is via selling products to non-affiliated customers, but IBOs may also receive bonuses for exemplary sales volume or travel incentives to exotic locations.Low investment – most individuals irrespective of nationality can become IBOs for as little as $100. Aside from the obvious status afforded by the IBO title, the low investment means Amway product sellers can recoup their costs more easily.Higher product prices – the aforementioned seller bonuses are paid in the form of points-based commissions. In order to pay these commissions to increasing numbers of sellers, Amway must charge a premium price for its products to make a profit.MLM network expansion – like any business, Amway must grow its customer base to survive. However, since Amway considers both the end-user and individuals in its network as customers, it must prioritize the expansion of its MLM hierarchy in addition to product development and marketing.Key takeaways:Amway, a contraction of “American Way”, is a company with a core focus on the sale of home care, beauty, and health-related products.Amway is primarily a multi-level marketing (MLM) company where goods are sold to distributors and salespeople. Unlike a Ponzi scheme, individual income is based on sales volume and not on how many new people they can refer.For Amway to profit from its MLM model, it allows independent business owners to earn money in three different ways for an investment as low as $100. To ensure it can continue to pay commissions to an expanding network, the company’s products also tend to be more expensive.

Read Next: Successful Types of Business Models You Need to Know

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