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How to make money with NFTs

Non-fungible tokens (NFTs) are blockchain-based assets that cannot be altered or reproduced. They can be bought and sold using money or cryptocurrency, with each valued according to its scarcity or the interest it receives from consumers. While the blockchain infrastructure behind non-fungible tokens can be difficult to understand, learning how to make money from them is somewhat easier. Almost $13 billion was spent on NFTs in 2021, so with that in mind, let’s discuss some specific money-making methods in the following sections.

NFT trading

Some make money with NFTs by purchasing them at a low price and then selling them for a profit. American art collector Pablo Rodriguez-Fraile purchased a piece of art for $66.666.66 and then sold it four months later in February 2021 for $6.6 million. The piece of art, comprised of a 10-second video clip, was created by renowned artist Beeple – a graphic designer also known as Michael Winkelmann.

Similar to selling shares for a profit, the NFT trader must understand what they are buying and any prevailing market sentiment around the token. They will also need to factor in certain costs such as gas fees, listing fees, and any royalties that need to be paid to the owner.

Digital art

As you may have noticed in the previous section, NFTs based on digital works of art are some of the most valuable ever created. Another of Beeple’s works of art sold for $69 million in the first-ever NFT auction held at Christie’s. The work itself is a collage of Winkelmann’s first 5000 days of work, starting from crude sketches and then evolving into digital shapes and sceneries.

NFTs guarantee ownership and authenticity, which makes it a revolutionary technology for digital art creators.

Video gamesNFT games are those that incorporate non-fungible tokens (NFT) as a way to drive growth. In essence, NFT games enable developers to monetize their creations while giving users the ability to earn cryptocurrency just by playing the game, what’s known as the play-to-earn business model.

It is also possible to make money from video game NFTs. This is a match made in heaven since many video games were already monetising in-game collectibles before NFTs were developed. Indeed, players of titles such as World of Warcraft and Counter-Strike spend vast amounts of money on virtual items that enhance gameplay.

Like other NFT types, video game NFTs can be sold in a marketplace to other players. 

Licensed collectibles

Licensed collectibles encompass a variety of NFTs, including sports trading cards, trinkets, and memorabilia. The most popular collectibles are sports cards, with Deloitte predicting that NFT sports media sales will exceed $2 billion in 2022.

For example, the NBA established an online NFT marketplace in 2020 where basketball fans could trade officially licensed virtual clips of their favorite players. Other sports governing bodies are likely to follow suit, with NFT platform Opensea selling collectibles in Formula 1 racing, NFL, golf, and baseball. 

In any case, note that most physical items can be turned into a licensed collectible NFT.

Investing in NFT companies

Investing in the NFT companies themselves is also a viable way to make money. If nothing else, NFTs have proven that they are not a fad and increased investment has fuelled rapid growth in the industry as a result.

NFT collectibles and games are popular at the present moment, but there exists a diverse range of startups for the interested investor.

Key takeaways:Non-fungible tokens (NFTs) are blockchain-based assets that cannot be altered or reproduced. They can be bought and sold using money or cryptocurrency, with each valued according to its scarcity or level of consumer interest.Traders make money on NFTs by purchasing NFTs and then selling them for a profit. Others use the inherent authenticity and proof of ownership of NFTs to sell their digital artworks.Licensed collectibles are also a way to make money from NFTs, with sports player cards one of the most popular ways to make money in licensed marketplaces. NFT startup companies are also a source of revenue as the industry experiences rapid growth and innovation.

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Read Also:  Gaming Industry, Epic Games Business Model, Free-To-Play, Proof-of-stake, Proof-of-work, Bitcoin, Dogecoin, Ethereum, Solana, Blockchain, BAT, Monero, Ripple, Litecoin, Stellar, Dogecoin, Bitcoin Cash, Filecoin.

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Business ModelsBusiness StrategyBusiness DevelopmentDigital Business ModelsDistribution ChannelsMarketing StrategyPlatform Business ModelsRevenue ModelsTech Business ModelsBlockchain Business Models FrameworkConnected Business Concepts EA Sports is among the largest gaming publishers, with a hybrid strategy of fully-owned games and licensed games distributed with a cross-platform approach. FIFA is the game that most contributes to its revenues and live services (Ultimate Team in particular) are the largest revenue contributors to EA revenues.The gaming industry, part of the entertainment industry, is comprised of three main types of players. From game engines, which help developers build their games. To publishing gaming houses. And gaming consoles. While the prevailing business model for decades has been that of selling the console at cost, and make money on games. Digital games changed the way games are distributed and sold, and it opened up the way to free-to-play models.Roblox is an online gaming platform where users can create avatars and explore various gaming experiences. Each experience will be monetized based on how its developer has structured the game. For instance, free games allow users to spend the platform’s currency, called Robux, to get specific enhancements or purchase items like clothing accessories for the avatars, simulated gestures from the Roblox Avatar Marketplace. Therefore, Roblox makes money by earning a commission on each transaction and through its internal ad network.Tencent is a Chinese multinational conglomerate founded in 1998 by Ma Huateng, Zhang Zhidong, and Xu Chenye. Among its various global subsidiaries are companies in the online services, music, and artificial intelligence industries. But it is perhaps best known for its interest in the video game sector – both as a game developer for the Chinese market and the acquirer of several established gaming companies. Tencent is a vast company with a stake in more than 600 companies. Following is a look at some of the companies and subsidiaries it has a majority stake in.A free-to-play is a model that became particularly popular in gaming. Free-to-play is also commonly referred to as free-to-start. For instance, companies like Epic Games have launched popular games like Fortnite’s Battle Royale, which had ingrained a free-to-play model. This is a model that become extremely popular in the digital age of gaming.According to Joel Monegro, a former analyst at USV (a venture capital firm) the blockchain implies value creation in its protocols. Where the web has allowed the value to be captured at the applications layer (take Facebook, Twitter, Google, and many others). In a Blockchain Economy, this value might be captured by the protocols at the base of the blockchain (for instance Bitcoin and Ethereum). However, according to blockchain investor Paivinen due to ease of forking, incentives to compete and improved interoperability and interchangeability also in a blockchain-based economy, protocols might get thinner. Although the marginal value of scale might be lower compared to a web-based economy, where massive scale created an economic advantage. The success of the Blockchain will depend on its commercial viability!A Proof of Stake (PoS) is a form of consensus algorithm used to achieve agreement across a distributed network. As such it is, together with Proof of Work, among the key consensus algorithms for Blockchain protocols (like the Ethereum’s Casper protocol). Proof of Stake has the advantage of security, reduced risk of centralization, and energy efficiency.A Proof of Work is a form of consensus algorithm used to achieve agreement across a distributed network. In a Proof of Work, miners compete to complete transactions on the network, by commuting hard mathematical problems (i.e. hashes functions) and as a result they get rewarded in coins.Non-fungible tokens (NFTs) are cryptographic tokens that represent something unique. Non-fungible assets are those that are not mutually interchangeable. Non-fungible tokens contain identifying information that makes them unique. Unlike Bitcoin – which has a supply of 21 million identical coins – they cannot be exchanged like for like.A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.Ethereum was launched in 2015 with its cryptocurrency, Ether, as an open-source, blockchain-based, decentralized platform software. Smart contracts are enabled, and Distributed Applications (dApps) get built without downtime or third-party disturbance. It also helps developers build and publish applications as it is also a programming language running on a blockchain.

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Types of entrepreneurship

Entrepreneurs are passionate innovators with a desire to change the world. However, they can be found in any industry and their visions and aspirations vary from one person to the next. Indeed, some entrepreneurs are motivated by the lure of money while others are motivated by social good. Some entrepreneurs start small companies and believe in sustained hard work to achieve success while others are a part of corporations that use capital to reach their goals.

Social entrepreneurship

The main goal of social entrepreneurship is to improve society in some shape or form. While some of these companies exist to make money, there are also non-profits and B Corps that balance social purpose with profit.

Warby Parker is one example of social entrepreneurship, with the company donating more than eight million pairs of glasses to disadvantaged citizens who are vision-impaired.

Innovation entrepreneurship

Innovation entrepreneurship is the transformation of an invention or idea into a business venture. This entrepreneurship type seeks to change the way people live in a manner that no other company has managed to do.

Elon Musk, Steve Jobs, and Bill Gates are all examples of motivated, passionate innovation entrepreneurs whose companies redefined what was thought possible.

Small business entrepreneurship

Small business entrepreneurship describes modest innovation that tends to be the result of adding a new twist to an existing product or service. Profits from these innovations are used to meet payroll or support basic living expenses. In other words, they are not reinvested to expand the business.

As the name suggests, small business entrepreneurship is found in many mom-and-pop businesses such as hairdressers, butchers, grocery stores, florists, and consultants.

Hustler entrepreneurship

Hustlers are those who believe in the power of hard work sustained over a long period. They have grand visions to grow the company into something more substantial and are not afraid to take risks.

One example of hustler entrepreneurship is Mary Kay Ash, founder of the beauty company Mary Kay Cosmetics. Ash used a combination of confidence, conscientiousness, extroversion, and superior networking skills to make her dream a reality.

Imitator entrepreneurship

In a similar way to small business entrepreneurs, imitators consider what is already working and then develop a product, service, or business model that is innovative or iterative. They can spot the mistakes others have made and improve on them with self-confidence and conviction.

Many believe imitator entrepreneurship to be a blend of innovators and hustlers. Facebook CEO Mark Zuckerberg is one such example.

Researcher entrepreneurship

Researcher entrepreneurs favor practicality over innovation and will spend vast amounts of time analyzing data to reduce the chances of a venture failing. Researchers possess exemplary critical thinking and problem-solving skills and have a strong desire for order. They make sure they understand every aspect of a business and a driven by logic rather than emotion.

Larry Ellison, a businessman, and co-founder of Oracle Corporation is a good example of researcher entrepreneurship.

Key takeaways:Entrepreneurs are passionate innovators with a desire to change the world. They can be found in almost any industry and the visions and aspirations vary from one entrepreneur to the next.Social entrepreneurship seeks to improve society in some way, while innovation entrepreneurship takes a new idea and makes it viable.Small business entrepreneurship is commonly found in mom-and-pop stores where the primary goal is to support a basic but comfortable existence. Hustler entrepreneurs believe success is down to sustained hard work, while researcher entrepreneurship is practical, analytical, and driven by logic instead of emotion.Business Model Frameworks for EntrepreneursFourWeekMBA Business Model FrameworkA business model is a framework for finding a systematic way to unlock long-term value for an organization while delivering value to customers and capturing value through monetization strategies. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace.VTDF Tech Business Model FrameworkA tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.Business Model CanvasThe business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.Lean Startup CanvasThe lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.Blitzscaling CanvasThe Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.Business Model WheelA business model wheel provides a structured approach to defining a business model. Each model wheel is broken down into three core components: offering, monetization, and sustainability. Each component in turn contributes to a total of eight areas that make up an ideal business model.Business Model Innovation FrameworkBusiness model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.3C Business Model AnalysisThe 3C Analysis Business Model was developed by Japanese business strategist Kenichi Ohmae. A 3C Model is a marketing tool that focuses on customers, competitors, and the company. At the intersection of these three variables lies an effective marketing strategy to gain a potential competitive advantage and build a lasting company.

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What Is Outside Sales? Outside Sales In A Nutshell

Outside sales occur when a salesperson meets with prospects or customers in the field. This sort of sales function is critical to acquire larger accounts, like enterprise customers, for which the acquisition process is usually longer, more complex and it requires the understanding of the target organization. Thus the outside sales will cut through the noise to acquire a large enterprise account for the organization.

Understanding outside sales

Outside sales representatives conduct sales in the field via face-to-face interactions in a location convenient to the prospect or customer.

The work environment of an outside sales professional tends to be less formal and more autonomous since it is outside the confines of an office setting. While the attractiveness of increased freedom cannot be denied, it is important to note that outside sales reps may be required to work on-demand according to the client’s schedule. This often means ensuring they are available outside of normal work hours.

Each outside sales representative may have a territory assigned to them and be responsible for educating the prospect about a product or service. What’s more, they must make their own travel arrangements and be flexible to scheduling changes or delays. Unlike inside sales professionals, those in outside sales place more emphasis on their physical appearance and need to be in the mood to entertain and network whenever the need arises.

Responsibilities associated with outside sales 

Here is a more succinct look at the responsibilities associated with the outside sales profession:

Establish and nurture business relationships through regular meetings.Demonstrate the suitability of a product or service vis-à-vis solving customer problems. This can be done with presentations, hands-on tutorials, and case studies.Set and achieve monthly sales quotas.Attend events, conferences, and conventions to present a product to service to interested parties.Monitor the market for new entrants that could become competitors.Map the various locations of clients using an app for territory and customer mapping.Set up sales appointments using mobile CRM tools or by visiting prospects in person.Research a prospect’s pain points in advance or be able to determine them from face-to-face interaction.Utilize an outside sales app to keep a record of all customers, sales, hours worked, and generate reports based on tasks assigned and tasks completed.Manage expenses associated with car rental, airline tickets, accommodation, and client entertainment such as restaurants and sporting events.What traits does an outside sales rep need to possess?

At the very least, an outside sales rep needs to possess a Bachelor’s degree in communications, business, economics, or marketing. Similar qualifications that show experience in customer engagement may also be adequate.

They must also have a strong phone presence and be confident initiating conversations with prospects. Since no day in outside sales is the same as the last, the individual must also be adept at problem-solving in a diverse range of contexts.

Some of the more obvious traits include strong interpersonal skills, extraversion, detail-orientation, and the motivation and discipline necessary to work autonomously.

Key takeaways:Outside sales occur when a salesperson meets with prospects or customers in the field.Responsibilities associated with outside sales include the ability to build relationships, demonstrate products, attend events and conventions, monitor the market for new entrants, and map the location of customers in a sales territory.Outside sales require the individual to possess a strong phone presence and be able to problem-solve in diverse contexts. A Bachelor’s degree in communications, business, economics, marketing, or similar is essential.Related Business ConceptsBusiness development comprises a set of strategies and actions to grow a business via a mixture of sales, marketing, and distribution. While marketing usually relies on automation to reach a wider audience, and sales typically leverage on a one-to-one approach. The business development’s role is that of generating distribution.The more you move from consumers to enterprise clients, the more you’ll need a sales force able to manage complex sales. As a rule of thumb, a more expensive product, in B2B or Enterprise, will require an organizational structure around sales. An inexpensive product to be offered to consumers will leverage on marketing. Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers. Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience. Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience. Writing a copy is the art of crafting catchy texts to persuade a particular demographic. “A copy” is the written content aimed at converting impressions to clicks and converting clicks to high sales. Any form of writing that persuasively requests an action from your audience is called copywriting. Buzz marketing leverages the power of word-of-mouth advertising to create products or services with enough novelty that they go viral. In many cases, buzz marketing leverages on versatile content that can easily scale and be readapted to various contexts and fear of missing out (FOMO) to amplify the effect of word-of-mouth campaigns. Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered. Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

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Storytelling Examples

Every action that is performed by a business has an underlying narrative, whether those actions be related to the brand, customers, advocates, employees, or stakeholders. 

Storytelling is a process where a narrative is created to allow a business to share its values, experiences, and history with the desired target audience. A connection is formed with the business when the audience can relate to some aspect of the business’s story in a way that is personal, emotional, and meaningful.

Businesses use these connections to foster brand loyalty among consumers, among many other applications. To get an appreciation for the power of storytelling in business, consider the following examples.

Formula 1 

The Formula One World Championship is to most people a simple story about winners and losers. However, marketers realized that this story was too familiar and failed to engage fans beyond the race itself.

To broaden the appeal of the sport, a Netflix documentary series was released with behind-the-scenes footage of the interactions between various drivers, teams, and the FIA throughout a season. The series, which was titled Drive to Survive, was praised for its ability to give context to storylines that were often formed while the competitors were not racing. 

This series was also a hit with viewers. According to data released by ESPN, viewership for the 2021 season was 53% higher than it was for 2020. 

PatagoniaPatagonia is an American clothing retailer founded by climbing enthusiast Yvon Chouinard in 1973 who saw initial success by selling reusable climbing pitons and Scottish rugby shirts. Over time Patagonia also became a fashionable brand also for its focus on slow fashion. Indeed, the company sells high-priced clothing items built to last which it will repair for free.

Outdoor adventure brand Patagonia is also a master storyteller. The audacious “Don’t Buy This Jacket” campaign saw the company encouraging its customers not to buy Patagonia products unless they really needed to replace an old item.

Six years after that campaign was released, the company announced it would be suing Donald Trump after he reduced the size of public land in Utah by almost 2 million acres.

Both initiatives invited consumers with similar values to become part of the Patagonia story as a brand that advocates environmentalism, sustainability, and anti-consumerism.

TD Bank

Canadian financial institution TD Bank released a content hub called TD Stories, where employee stories are skillfully tied to the company’s mission.

During November, the hub features the stories of employees with a military background to recognize National Veterans and Military Families Month. These stories are aligned with the company’s mission to build communities where active and former military personnel can share their experiences, advance their careers, and promote awareness of veteran matters to colleagues and customers.

Rather than use storytelling to pitch to sales executives or the end-user, TD Bank collaborated with employees in customer-facing roles so consumers could relate to the company they do business in a meaningful way.

Huckberry

Huckberry is an eCommerce company selling outdoor gear with a community of over 1 million active and adventurous consumers.

To promote its products, the company shares the stories of brand ambassadors on its blog. In one such story, ambassador Ben O’Meara wore Huckberry’s “72-Hour Merino Tee” for exactly 72 hours as he traveled across the Canadian wilderness by car and canoe.

O’ Meara camped in the beautiful Canadian wilderness and spent his time making photographs punctuated with visits to different breweries. This was the sort of vacation that is extremely attractive to Huckberry’s core audience of adventure lovers. While the company likely sold a fair few merino shirts as a result of the initiative, perhaps the greater value came from the opportunity to strengthen the relationship with its community through stories underpinned by shared values and experiences.

Key takeaways:Every action performed by a business has an underlying narrative, whether those actions be related to the brand, customers, advocates, employees, or stakeholders.Formula 1 released a behind-the-scenes documentary series after it realized the winner and loser narrative in each race was tired and one-dimensional. The series gave more context to the stories behind the sport, which increased engagement and viewership.Patagonia tells brand stories that appear to be counterintuitive to making a profit. However, it uses storytelling to attract consumers who share its strict environmental stance. TD Bank and Huckberry also used storytelling to align with their respective military and adventure-driven missions.

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Business ModelsBusiness CompetitionBusiness StrategyBusiness DevelopmentDigital Business ModelsDistribution ChannelsMarketing StrategyPlatform Business ModelsRevenue ModelsTech Business ModelsBlockchain Business Models FrameworkConnected Business Concepts Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers. Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience. Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience. Writing a copy is the art of crafting catchy texts to persuade a particular demographic. “A copy” is the written content aimed at converting impressions to clicks and converting clicks to high sales. Any form of writing that persuasively requests an action from your audience is called copywriting. Buzz marketing leverages the power of word-of-mouth advertising to create products or services with enough novelty that they go viral. In many cases, buzz marketing leverages on versatile content that can easily scale and be readapted to various contexts and fear of missing out (FOMO) to amplify the effect of word-of-mouth campaigns. Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered. Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

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What Is Brand Storytelling? Brand Storytelling In A Nutshell

Brand storytelling involves the use of authentic, sustainable, and emotion-driven narratives that promote organizational growth and customer loyalty. Brand storytelling is a form of integrated marketing where a company’s brand content is streamlined across multiple media channels and market activities. This may include social media, content marketing, public relations, video, search engine optimization, sales collateral, messaging, and advertising.

Understanding brand storytelling

Brand storytelling is a sustainable way to communicate a brand based on the stories a company shares and the stories others share about the company based on its behaviors or actions. It’s important to note that brand storytelling does not encompass a company logo, catchphrase, timeline, or advertising commercial. Nor does it solely encompass the mission, vision, and values stated on the company website. 

Instead, think of brand storytelling as the amalgamation of:

What a company stands for and what drives it toward success. What differentiates the company from its competitors.A company’s values, beliefs, and attitudes that comprise corporate culture.A company’s history, failures, successes, reasons for being and the individuals responsible for playing a significant role.

The most skillful brand storytellers strike the right balance between commercial objectives – such as increasing brand awareness or revenue – and an audience-centric approach to the story itself. 

Brand storytelling has become more popular in recent times as consumers actively avoid traditional advertising methods that are disruptive and repetitive. To that end, brands are now creating media content that is also entertaining and informative to appeal to the discerning consumer.

The foundational elements of brand storytelling

In truth, there are many approaches to telling brand stories that will resonate with consumers. Having said that, it is a good idea to incorporate the following foundational elements and then customize the narrative to suit the individual brand:

Plot and conflict – first, identify the antagonist who establishes a conflict and a protagonist that seeks to resolve it.Characters – the antagonist and protagonist should be “built out” with character depth to allow consumers to become emotionally invested. This causes them to cheer for the good guy and admonish the bad guy.Setting – the setting establishes the mood, influences character behavior, reveals conflict, and, in theory, elicits an emotional response in the consumer.Theme – in other words, what is the purpose of the story? If a business does not understand why it is telling a story, there is no chance the story will have its intended purpose. Form – or the medium with which the story will be told. These days, there are many options such as podcasts, webinars, spoken, video testimonials and success stories, animation, film, magazines, blog posts, articles, and social media content.Brand storytelling and the marketing funnelThe sales funnel is a model used in marketing to represent an ideal, potential journey that potential customers go through before becoming actual customers. As a representation, it is also often an approximation, that helps marketing and sales teams structure their processes at scale, thus building repeatable sales and marketing tactics to convert customers.

Most businesses tell stories to influence consumer behavior. To do this effectively, brand storytelling should be in harmony with the four stages of a typical marketing funnel and the customer journey. This assumes the business has already identified a unique value proposition and has a detailed understanding of its target audience.

Let’s take a look at the four stages below. At each stage, the business should be telling stories that are relatable to the consumer in terms of their unique pains, struggles, or goals.

AIDA stands for attention, interest, desire, and action. That is a model that is used in marketing to describe the potential journey a customer might go through before purchasing a product or service. The AIDA model helps organizations focus their efforts when optimizing their marketing activities based on the customers’ journeys. 1 – Awareness (build intrigue)

In the awareness stage, it is important to mention shared values and interests. In other words, what can the business say about its passions, problems, or experiences to make consumers feel like it understands them?

Investment platform Wealthsimple featured the story of a customer who was saddled with debt in its digital magazine. Since the customer was someone the company’s target audience could relate to, the brand was able to build authority and intrigue about how their debt was reduced.

2 – Consideration (educate and inform)

In the consideration stage, the business should provide additional information to describe how it came to be founded and how it seeks to remedy the problems identified in the awareness stage. 

Practical information that teaches, motivates, or engages is the most effective.

3 – Conversion (influence a purchase)

Now it is time to detail how the business can actually solve the problem. Customer stories and their associated social proof build credibility and trust. Ideally, these stories should clarify whether the product or service does what it says on the box. They should also describe its competitive advantage and why the customer should care.

Some brands also use customer testimonials to focus on emotional impact over product features. For example, Google featured a goat farming couple who had increased their milk sales by 6000% in four years using Google Ads. Instead of focusing on the features within the ad platform that were responsible for the success, Google painted it as a typical “rags to riches” story where the farmers started with a single goat and grew their flock to over 70.

4 – Retention (inspire engagement)

Customer retention is one of the most important metrics of any business. Here, it is important to share experiences that turn customers into fans and make them feel part of something special. The most adept marketing teams  also realize that consumers are predisposed to making connections and attachments with others of a similar ilk.

To take advantage of this predisposition, Patagonia tells different stories that are segmented by the various preferences of their audience to make them feel like they belong, For example, the brand has devoted a section of its website to a place where climbers can come together and share stories, tips, and equipment reviews.

Key takeaways:Brand storytelling involves the use of authentic, sustainable, and emotion-driven narratives that promote organizational growth and customer loyalty.Brand storytelling endeavors to strike the right balance between commercial objectives and an audience-centric approach to the story itself. The foundational elements of a compelling story can be used to design strategies that attract consumers who are now averse to disruptive forms of marketing and advertising.Brand storytelling is used to influence consumer behavior. This can be done by telling stories across the four-stages of the marketing funnel that includes awareness, consideration, conversion, and retention.

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Business ModelsBusiness CompetitionBusiness StrategyBusiness DevelopmentDigital Business ModelsDistribution ChannelsMarketing StrategyPlatform Business ModelsRevenue ModelsTech Business ModelsBlockchain Business Models FrameworkConnected Business Concepts Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers. Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience. Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience. Writing a copy is the art of crafting catchy texts to persuade a particular demographic. “A copy” is the written content aimed at converting impressions to clicks and converting clicks to high sales. Any form of writing that persuasively requests an action from your audience is called copywriting. Buzz marketing leverages the power of word-of-mouth advertising to create products or services with enough novelty that they go viral. In many cases, buzz marketing leverages on versatile content that can easily scale and be readapted to various contexts and fear of missing out (FOMO) to amplify the effect of word-of-mouth campaigns. Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered. Binge-watching is the practice of watching TV series all at once. In a speech at the Edinburgh Television Festival in 2013, Kevin Spacey said: “If they want to binge then we should let them binge.” This new content format would be popularized by Netflix, launching its TV series all at once.

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Marketplace Business Models

A marketplace is a platform where buyers and sellers interact and transact. The platform acts as a marketplace that will generate revenues in fees from one or all the parties involved in the transaction. Usually, marketplaces can be classified in several ways, like those selling services vs. products or those connecting buyers and sellers at B2B, B2C, or C2C level. And those marketplaces connecting two core players, or more.

Different types of marketplaces

Based on the kind of thing sold on the marketplace we can break them down into:

Service.Products.

Based on the nature of the people or companies interacting though the marketplace we can break them down into:

B2B.B2C. C2C.

Based on the number of players interacting and transacting on the platform, marketplaces can be broken down into:

Two-sided.Three-sided.Multi-sided.Marketplaces case studiesEtsy’s product marketplaceEtsy is a two-sided marketplace for unique and creative goods. As a marketplace, it makes money via transaction fees on the items sold on the platform. Etsy’s key partner is comprised of sellers providing unique listings, and a wide organic reach across several marketing channels. Uber Eats three-sided marketplaceUber Eats is a three-sided marketplace connecting a driver, a restaurant owner, and a customer with the Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fee; Drivers earn through making reliable deliveries on time.LinkedIn two-sided marketplaceLinkedIn for Business is used on a very large scale, around 30 million+ brands and businesses are using it. LinkedIn marketing tools available for each business size and sort, from small to large and B2B to B2C. LinkedIn is the most effective marketing tool not only for salespeople but also for brands and to build a strong corporate brand.Other marketplace business model case studiesAmazon Business ModelAmazon has a diversified business model. In 2019 Amazon posted over $280 billion in revenues and over $11.5 billion in net profits. Online stores contributed to over 50% of Amazon revenues, followed by Physical Stores, Amazon AWS, Subscription Services, Third-party Seller Services, and Advertising revenues.Doordash Business ModelDoorDash is a platform business model that enables restaurants to set up at no cost delivery operations. At the same time, customers get their food at home and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.Etsy Business ModelEtsy is a two-sided marketplace for unique and creative goods. As a marketplace, it makes money via transaction fees on the items sold on the platform. Etsy’s key partner is comprised of sellers providing unique listings, and a wide organic reach across several marketing channels.Uber Business Model Uber is a is two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.Uber Eats Business ModelUber Eats is a three-sided marketplace connecting a driver, a restaurant owner and a customer with Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fee; Drivers earn through making reliable deliveries on time.

Read More: Platform Business Models, Network Effects, Etsy Business Model, Uber Eats Business Model, LinkedIn Business Model, Virtuous Cycle.

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Business Strategy ExamplesBusiness ModelsWhat Is a Value Proposition?Business Model InnovationDigital Business Models

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Cloud Business Models

Cloud business models are all built on top of cloud computing, a concept that took over around 2006 when former Google’s CEO Eric Schmit mentioned it. Most cloud-based business models can be classified as IaaS (Infrastructure as a Service), PaaS (Platform as a Service), or SaaS (Software as a Service). While those models are primarily monetized via subscriptions, they are monetized via pay-as-you-go revenue models and hybrid models (subscriptions + pay-as-you-go).

Origin StoryIn 2006, the term “cloud computing” picked up, as tech giants like Amazon and Google were vastly investing in bringing applications on the web; with fast deployment and continuous updating, this model became viable not only at enterprise but also at the consumer level. And it gave birth to new business models built on top of the cloud, such as IaaS, PaaS, and SaaS
(Image Source: Google Ngram)

Back in August 2006, at Search Engine Strategies Conference, in a conversation with Eric Schmidt hosted by Danny Sullivan, the former Google’s CEO pointed out,

What’s interesting [now] is that there is an emergent new model, and you all are here because you are part of that new model. I don’t think people have really understood how big this opportunity really is. It starts with the premise that the data services and architecture should be on servers. We call it cloud computing – they should be in a “cloud” somewhere. And that if you have the right kind of browser or the right kind of access, it doesn’t matter whether you have a PC or a Mac or a mobile phone or a BlackBerry or what have you – or new devices still to be developed – you can get access to the cloud. There are a number of companies that have benefited from that. Obviously, Google, Yahoo!, eBay, Amazon come to mind. The computation and the data and so forth are in the servers.

And he continued:

And so what’s interesting is that the two – “cloud computing and advertising – go hand-in-hand. There is a new business model that’s funding all of the software innovation to allow people to have platform choice, client choice, data architectures that are interesting, solutions that are new – and that’s being driven by advertising. The reason that I said “don’t bet against the Internet” is an awful lot of people are still trying to do stuff the old way. They’re still trying to build proprietary protocols, they’re still trying to not build standardized protocols. They’re still not trying to solve problems in a simple and extensible way. But when somebody does it right – let me give you the example of mashups, which are taking over the world by storm. It happens very fast. And that’s the power of the Internet.

While the term picked up traction from there, even though the term and potential of this technology were already understood in 1996, when a group of executives at Compaq already had forgone that most applications on the web of what they called “cloud computing-enabled applications.”

Even though, as we saw above, it would still take ten years, for this technology to pick up at scale. And by 2020, cloud computing would become one of the most profirable industries, and units of tech giants like Amazon (with AWS) Microsoft (with Azure), Google (with its Cloud), and IBM.

Not only that, cloud computing enabled the birth of an entrepreneurial ecosystem, and hundreds of companies, both in B2B and B2C that leveraged the cloud to build valuable products and services.

Consumers’ companies like Netflix, Spotify, YouTube are all built upon the cloud. Other enterprise-based organizations as well.

Classification of Cloud-Based Business Models

Cloud-based business models are usually classified as:

IaaS: in the infrastructure as a service, the cloud provider usually offers networking, storage, hosting, and virtualization. In this way, the customer can leverage a cloud-based infrastructure without building it internally, therefore avoiding the cost, complexity, and time required with that. In a way, the IaaS customer can leverage a complex infrastructure without building and maintaining it and using it on demand. PaaS: in the platform as a service, the cloud provider also offers the platform to build applications for customers/users. Therefore, users will have all the tools needed to build these applications. Also, the customer gets a whole set of tools on-demand, without having to build them, while the client will manage those applications and related data. SaaS: in the software as a service, the provider offers also applications and data management, so that the final customer can get service on demand. Technological Infrastructure

Depending on the type of cloud-based business model, the company might have a complex or less technological infrastructure or platform. Perhaps, a SaaS service might well be built on top of existing IaaS and PaaS. Therefore, only do the part related to the UI and UX development for final users/customers.

Other cloud-based infrastructures can be extremely complex. Companies like Amazon AWS, Google Cloud, Microsoft Azure, and IBM Cloud (which are the major players) took years to develop and enabled an entrepreneurial ecosystem of companies built on top of them. A whole set of SaaS companies are built on top of those cloud providers.

Commercial Use Cases

The commercial use cases covered by cloud-based business models is vast. From B2B/Enterprise companies offering big data analysis, business intelligence, inventory management, and much more, to B2C companies offering streaming services, social media platforms and more to final customers.

Revenue Models

While business models built on top of the cloud are usually driven by a subscription (as they run as an on-demand service), in reality there are several revenue streams used:

Subscription-based. Consumption-based (pay-as-you-go).Advertising-based.Hybrid models.

Read More: IaaS vs PaaS vs SaaS

Connected Business FrameworksOne of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses. AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms. Machine Learning Ops (MLOps) describes a suite of best practices that successfully help a business run artificial intelligence. It consists of the skills, workflows, and processes to create, run, and maintain machine learning models to help various operational processes within organizations. The business intelligence models have transitioned to continuous intelligence, where dynamic technology infrastructure is coupled with continuous deployment and delivery to provide continuous intelligence. In short, the software offered in the cloud will integrate with the company’s data, leveraging on AI/ML to provide answers in real-time to current issues the organization might be experiencing. The business intelligence models have transitioned to continuous intelligence, where dynamic technology infrastructure is coupled with continuous deployment and delivery to provide continuous intelligence. In short, the software offered in the cloud will integrate with the company’s data, leveraging on AI/ML to provide answers in real-time to current issues the organization might be experiencing. That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problems and not the technical solution of its founders.Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

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Business ModelsBusiness StrategyMarketing StrategyBusiness Model InnovationPlatform Business ModelsNetwork Effects In A NutshellDigital Business Models

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Business Innovation To Extend, Renew or Reinvent Your Business Model

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business vs. technological innovation

The primary misunderstanding about business innovation, which leads to inaction is believing that reinventing or innovating your business starts from technical implementations.

Innovating in business means redefining value for your existing customers to understand how to enhance it. Or determining what new value can be delivered to new customers with similar needs. Or yet, defining a whole new set of values to be delivered to a new customer base.

We can start the process by mapping our business boundaries.

Define the value customers get and your business boundaries

In order for you to redefine and innovate, you need to understansd first the current value your provide.

For instance, if you have a barbershop, are people just coming to you to cut their beards? Not really, many of those people might come to you for several reasons:

They want to look goodThe place is near to their homeThe environment is good They like to talk to you

Based on the reasons above you can develop a whole offering of services and products. For instance, if you’re just cutting hair, why not sell some of the products you select to your customer base?

Understanding the needs of your customers help you structure an offering:

Sell-related products Add-on offerings for related services Simple offering with a flat feeSubscription-service kit with curated products Within and beyond your business boundaries

By setting the boundaries of your business and existing customer base, you can also define those experiments that would provide further value and enable your business to transform.

This also means being able to experiment with:

Providing more value to existing customers with an expanded offeringCreate a whole new product for an existing customer baseTweak an existing product to serve new customersOr build a whole new product for a new customer base

Let’s see now some case studies and examples from how companies are reinventing or surviving difficult times.

Redefining value: case studiesA value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.Google content hub When you type “COVID” on Google you will find a whole content hub, which gives local news about the virus. Official national news. And also official medical advice on symptoms. Google transformed the whole intent-based search around COVID in a separate platform to help people deal with this crisis.

In some cases, a tweak of an existing product or platform can provide much more value to the existing user base. In the case above, Google has built a temporary platform on top of its search capabilities.

Airbnb virtual experiencesThe new Online Host Experience by Airbnb

Airbnb is experimenting with a new form of experience on the platform. By leveraging on its existing base of hosts, the company is inviting existing and new hosts to structure their online, and virtual experiences on the platform.

Uber’s work hubHow Uber leveraged its platform trying to support or perhaps engage the community of drivers which is a core element of Uber’s platform success (source: uber.com/blog/work-hub/)

As highlighted on Uber’s website “Uber Works, connects people to shift work like food production, warehouse, and customer service in Chicago, Dallas, and Miami.“

Uber is experimenting with this program to sustain its drivers’ user base.

Beachwear making masks How several brands are converting their production of beachwear into fashion face masks (source: hedleyandbennett.com/pages/wakeupandf...)

In some cases, you don’t need to reconvert the whole business model to make it survive in difficult times. All you need is to levarage on the existing capabilities of the business to come up with a product that people need.

That is how many beachwear fashion brands are converting their products into fashionable face masks, which will help the conversion of the business, while incentivizing people to wear masks.

From cars to ventilatorsCar companies, from Tesla, to GM and Ford are reconverting part of their facilities to manufacture ventilators.

Car companies or companies, in general, are converting existing facilities to produce something in high demand right now.

From restaurant parking lot to drive-in cinema

What used to be the most valuable area of the business (the eating area) is becoming less so for many restaurant businesses.

Indeed, many restaurants around the world are figuring that their parking lot, indeed, can be used as a new business unit.

And in some cases, restaurants are partnering up with Cinemas to create a new experience, where people can drive in with their cars and watch shows in the parking lot. Here an interesting case study.

From valet service to drive-in click and collect

Where the business cannot be run physically, why don’t you convert that digitally? That is what some valet services are doing by introducing drive-through click and collect services.

3D printing COVID equipment

Decentralized manufacturing might become among the most important commercial use cases in an era where travel is restricted. That is why 3D printing companies are pushing to produce equipment needed during these times.

From co-working to virtual co-working

Co-working spaces are among the most hit by this crisis, and it’s hard to understand at this stage how to convert a business heavily invested in real estate to virtual, or semi-virtual.

It’s fundamental to ask “what value can we provide?” and redefine the services they offer.

People, like Seth Godin, are already experimenting with this new format with the launch of the Akimbo Virtual Coworking.

Now a service that might be offered for free, it might be leveraged by co-working companies to redefine their businesses.

From stage to virtual concerts

The Group called Real Estate launched Quarantour, a way for people to experience a sort of virtual music tour from the band on their phones.

From hotel rooms to quarantine rooms

Many Hotels are utilizing their spaces to accomodate people for quarantine. With restrictions in place, and people not ready to travel, hotel businesses are reorganizing their spaces to support the crisis.

From WFH to hotel rooms as offices

As working from home for many is impossible due to several reasons (small home, crowded family, too many children around) hotel rooms might become a sort of productivity heaven. Thus, some hotels might reorganize to offer those rooms as an alternative to offices.

So we move from co-working to hotel rooms as offices.

From influencers to infludancers

As the Chinese app TikTok, owned by ByteDance, gains traction. More and more people join in. And in this era of forced isolation, people rather than spending time to rethink their lives, spend time crafting from basic to advanced dances, which are very popular memes on the platform.

As those “infludancers” gain more and more attention, they might make the past made of influencers look something of the past. And they are figuring how to monetize the attention gained on this highly contagious platform.

Macrotrends

What macrotrends is this scenario pusring forward? For sure, that is acceleraging the development of industries that otherwise would have taken still years to develop.

Some of these areas go from e-commerce to blockchain and crypto.

E-commerce and forced digitalization

As we help thousands of businesses to move online, our platform is now handling Black Friday level traffic every day!

It won’t be long before traffic has doubled or more.

Our merchants aren’t stopping, neither are we. We need to scale our platform.https://t.co/e2JeyjcEeC pic.twitter.com/6lqSrNUCte

— Jean-Michel Lemieux (@jmwind) April 16, 2020

Many businesses that resisted for years the digitalization process are now jumping online to survive.

A crypto-friendly platform like Shopify (it facilitates payments via crypto) is seeing a surge in traffic, which is comparable to the Black Friday traffic level.

With a difference, that this level of traffic is now on a daily basis.

Remote working

In a recent blog post Zoom explained the explosion of usage on the platform:

We also feel an immense responsibility. Usage of Zoom has ballooned overnight – far surpassing what we expected when we first announced our desire to help in late February. This includes over 90,000 schools across 20 countries that have taken us up on our offer to help children continue their education remotely. To put this growth in context, as of the end of December last year, the maximum number of daily meeting participants, both free and paid, conducted on Zoom was approximately 10 million. In March this year, we reached more than 200 million daily meeting participants, both free and paid. We have been working around the clock to ensure that all of our users – new and old, large and small – can stay in touch and operational.  

While we can expect this phenomenon to normalize, there is no doubt, that remote working will become a key mode of work in the coming years.

Where mostly engineering-driven, digital organizations had already embraced that model, now many companies have been forced to that. And we can expect this trend to continue as it will not be possible for companies to declutter their office spaces in the short term.

From global to local tourism

As travel restrictions might continue in the coming months, usually crowded tourism locations will need to redefine their mission, to add as much value as possible to local communities.

Tourism then can go back to becoming local.

Remixing

In the book, The Inevitable, Kevin Kelly highlighted how among the forces that might shape our future, there is “remixing.” Or how economic growth in the coming years might be driven by taking existing resources to “rearrange them to make them more valuable.”

Therefore, for many businesses out there the answer is already there, it just requires (as we saw above) cretivity and willingness to experiment to make a business viable in this time.

In other cases, the change needs to be radical instead. In those cases, it makes sense to wait and see, and in the meantime trying to get support for your business.

Forced robotics

Where humans can’t be in the loop, robots might become the providers of basic services (in delivery services or assistance in the healthcare industry) even faster then we thought.

Where the political debate moved to make sure people would not remain jobless, it might move toward making sure the economy doesn’t stop, and robotics can be an important solution.

Forced cryptonomics

If central systems will be incapable of tackling systemic issues, decentralized solutions, like cryptocurrencies will grow even quicker. And that might make banks, and central banks less relevant in the future.

Forced blockchain

Where central systems risk collapse during hard times, decentralized systems might prove more robust.

Blockchain commercial applications are also moving faster.

A decentralized web applications promising to track Corona cases (CoronaTracker)Key takeawaysTrends that required years of consolidation gained traction during uncertain times. With that, the whole market structure changes rapidly, thus calling for a quick assessment of where and how your business sits in the marketplaceBusiness innovation is not (primarily) a technical problem. It starts instead by redefining value for existing or new customers In many cases, business model reinvention starts by reorganizing resources around an expanded value offering for the existing customer baseIn other cases, it requires a whole new definition of value, and with that an important reorganization of the overall company In some circumstances, business innovation is a matter of survivalAnd for others a matter of opportunityWhichever scenario you’re facing, you can evaluate whether it makes sense to wait (look for government support), reorganize, or reinvent!Connected Business ConceptsInnovation in the modern sense is about coming up with solutions to defined or not defined problems that can create a new world. Breakthrough innovations might try to solve in a whole new way, well-defined problems. Business innovation might start by finding solutions to well-defined problems by continuously improving on them.A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward. In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems. Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.Open innovation describes a situation where a business does not rely on its internal knowledge or resources for innovation. They instead source ideas from external sources through the sharing of knowledge and in some cases, collaboration with other businesses.

Handpicked related resources:

Business Model InnovationBusiness ModelsDigital Business ModelsBusiness StrategyValue PropositionMarketing Strategy

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VTDF Business Model Template [Downloadable Template Inside]

A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Learn More In Tech Business Models

VTDF Business Model Template

Download Your Template Here

Keep reading, if you want to understand how to use the framework.

Value model

In the value model we want to answer three core questions:

Vision: What’s the long-term hard problem you’re solving?

Mission: How do you get closer to achieve this hard problem in the short-term?

Value Proposition: What use cases do we prioritize, as they are in target with our customers’ needs?

It usually all starts by a value model which comprises:

An opportunity: the size of the opportunity will be determined by whether the market exists, it’s still building up, and its growth potential. From the opportunity, it’s possible to evaluate the potential market size (usually tech companies look at TAM). A problem to be solved: a problem can be practical, or it can go beyond that. Companies like Nike and Coca-Cola focus most of their efforts on-demand generation. This also applies to tech business models. Before the iPhone people didn’t know they needed a smartphone in the first place. A set of value propositions: from the above a company will develop a core value proposition. As it will scale it will be able to satisfy a set of value propositions, which is the glue that keeps together customers and the company. Mission and vision: as the company builds up its various models, it also develops its own core beliefs, which are comprised in its mission and vision. Value propositionsA value proposition is about how you create value for customers. While many entrepreneurial theories draw from customers’ problems and pain points, the value can also be created via demand generation, which is about enabling people to identify with your brand, thus generating demand for your products and services.Mission and visionA mission statement helps an organization to define its purpose in the now and communicate it to its stakeholders. That is why a good mission statement has to be concise, clear to able to articulate what’s unique about an organization, thus building trust, and rapport with an audience.Technological model And R&D Management

Continuous Innovation: How do we handle engineering resources to sustain continuous innovation for business model expansion?

Breakthrough Innovation: How do we handle engineering resources to promote breakthrough innovation for business model reinvention?

The technological model is the enhancer of the product, and it helps merge together the value proposition with the distribution model. When engineering is done right, it helps bridge the gap between what customers still miss, the product and the way the product is distributed.

The technological model will help satisfy the need of larger and larger portion of the market. From early adopters, to potentially laggards. This will determine the ability of the company to scale up.

In his book, Crossing the Chasm, Geoffrey A. Moore shows a model that dissects and represents the stages of adoption of high-tech products. The model goes through five stages based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggard.

In the technological model, the way R&D is managed to produce continuous innovation (to sustain the linear growth of the business) and breakthrough innovation (to enable long-term success of the business) is critical.

Distribution Model

Marketing & Sales: How do we communicate and sell the product to the right audience?

Product Engineering: How do we enable built-in features that help us distribute the product?

Partnerships: Who do we partner with to expand our audience?

Deal Making: What deals do we close that help us get to our audience?

A distribution channel is the set of steps it takes for a product to get in the hands of the key customer or consumer. Distribution channels can be direct or indirect. Distribution can also be physical or digital, depending on the kind of business and industry.

The distribution model helps to bring the product in the hands of customers. The company can leverage on engineering, marketing, sales or all of them, to make the product in fit with the market, via its distribution. That is why, based on what problems the product solves and for whom, it will have an organizational structure more skewed toward engineering and marketing, or engineering and sales, or perhaps a mix of the three. Other things like partnerships and deal making are also part of the distribution model.

Financial model

Revenue Generation: How does the company make money?

Cost Structure: How does the company spend money to make money? (cost of sales)

Profitability: Is the company profitable?

Cash Management & Generation: Is the company cash positive?

In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

The financial model is what enables the company to keep generating enough cash to sustain its operations, not only in the short-term, but also toward R&D and innovation. And it is made of several components:

Revenue model.Cost structure. Profitability.And cash generation and management.Revenue modelRevenue modeling is a process of incorporating a sustainable financial model for revenue generation within a business model design. Revenue modeling can help to understand what options make more sense in creating a digital business from scratch; alternatively, it can help in analyzing existing digital businesses and reverse engineer them. Cost structureThe cost structure is one of the building blocks of a business model. It represents how companies spend most of their resources to keep generating demand for their products and services. The cost structure together with revenue streams, help assess the operational scalability of an organization.Profitability

From how the company generates revenues and its cost structure, profitability will be determined. When the revenue model isn’t yet efficient enough to cover up or sustain the cost structure in the long-term, there is when we have a lack of profitability. At the same time, it might happen that a company is profitable but it lacks cash, given its overall financial model. Or it might happen that a company has no profits, or very tight margins and yet it generates a continuous stream of cash.

That is why it’s critical to look at the next element.

Cash generation and managementThe cash flow statement is the third main financial statement, together with the income statement and the balance sheet. It helps to assess the liquidity of an organization by showing the cash balances coming from operations, investing, and financing. The cash flow statement can be prepared with two separate methods: direct or indirect.

Profitability doesn’t tell us the whole story. We need to look at cash management. A company like Amazon have been running at very tight profit margins for years, and yet generating massive amounts of cash, invested back in its operations. A company like Netflix has been generating good profit margins, but running with a cash negative model.

This isn’t good or bad in absolute, but it gives us an understanding of the company’s financial mode. Perhaps, Netflix, with a negative cash flow model, it has been investing substantial cash in the development of original shows, which are both critical to generate revenue and also essential to its brand’s strategy. Thus, revenue generation, distribution, and marketing come together here.

Key takeaways

According to the VTDF framework a tech business model can be broken down in four sub-models:

Value model (value propositions, mission, vision), to answer questions, such as:

Vision: What’s the long-term hard problem you’re solving?

Mission: How do you get closer to achieve this hard problem in the short-term?

Value Proposition: What use cases do we prioritize, as they are in target with our customers’ needs?

Technological model (R&D management), to answer questions such as:

Continuous Innovation: How do we handle engineering resources to sustain continuous innovation for business model expansion?

Breakthrough Innovation: How do we handle engineering resources to promote breakthrough innovation for business model reinvention?

Distribution model (sales and marketing organizational structure), to answer questions such as:

Marketing & Sales: How do we communicate and sell the product to the right audience?

Product Engineering: How do we enable built-in features that help us distribute the product?

Partnerships: Who do we partner with to expand our audience?

Deal Making: What deals do we close that help us get to our audience?

Financial model (revenue modeling, cost structure, profitability and cash generation/management), to answer questions such as:

Revenue Generation: How does the company make money?

Cost Structure: How does the company spend money to make money? (cost of sales)

Profitability: Is the company profitable?

Cash Management & Generation: Is the company cash positive?

From the balance and mixture of those four elements a viable business model is built.

Examples Of VTDF Framework AppliedStarted as a pay-later solution integrated to merchants’ checkouts, Affirm makes money from merchants’ fees as consumers pick up the pay-later solution. Affirm also makes money through interests earned from the consumer loans, when those are repurchased from the originating bank. In 2020 Affirm made 50% of its revenues from merchants’ fees, about 37% from interests, and the remaining from virtual cards and servicing fees.C3 AI is a cloud-based Enterprise AI SaaS company. It built a set of proprietary applications (known as the C3 AI suite) that offer its clients the ability to integrate digital transformation applications with fast deployment and no overheads. C3 AI makes money primarily via its subscription services and professional fees.Other Business Models Where The VTDF Framework Has Been UsedAffirm Business ModelAirbnb Business ModelAsana Business ModelSnowflake Business ModelSumo Logic Business ModelUnity Software Business Model

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Value PropositionDistribution ChannelsHow To Write A Mission StatementRevenue Models Financial StructureProfitabilityCash Flow

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Successful Types of Business Models You Need to KnowThe Complete Guide To Business DevelopmentBusiness Strategy: Definition, Examples, And Case StudiesWhat Is a Value Proposition? Value Proposition Canvas ExplainedMarketing Strategy: Definition, Types, And Examples

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Attention Merchants Business Model: Asymmetry In Business

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.

Understanding asymmetric business models

To me, the distinction between the attention merchants and the rest was clear, as I developed the idea of asymmetric business models. Let me further explain.

With the risk of sounding redundant, business models can be classified in many ways. For the sake of this piece, we’ll classify them according to the fact that companies break down the walls between product and distribution, to enhance the value proposition for potential customers/users. 

When these conditions are met that is when we have a digital business model. And perhaps that is how we assist to the so hyped digital transformation. When you have not crossed that border where product and distribution have come together to enhance value proposition, thus enabling scalability, you’re still experimenting with digitalization. 

Therefore a digital business model is such, when the digital part embraces product development and distribution, as a whole. 

Thus, digital business models evolve into tech business models, where the technical component, the technology, becomes a key enhancer for the value proposition of the customer, thus making the company primarily a tech player.

A tech business model is made of four main components: value model (value propositions, mission, vision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

And a further evolution from digital/tech business models to blockchain-based business models is also a further step we’re looking at in the coming decades. In the case of blockchain-based business models as we’ll see, they in part resemble open-source, but with built-in economic incentives to align developers, users, investors, and more. Understanding this transition is critical!

Let’s take a quick look at what asymmetry means, and let’s compare it with symmetric business models. 

Asymmetric business models

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users‘ data, combined with the algorithms that repackage that data and sell it to advertisers for visibility.

Let me get back to further clarify what makes up an asymmetric business model: 

Asymmetry 1 or customer asymmetry – Key user ≠ Key Customer: The product is usually free and it’s not monetized directly (it’s not linear, like a freemium, where there is a free version and a paid, upgradable version). Instead, the core asset is supported by a key customer which is different from the key user (Google, Facebook, YouTube Free, Instagram, TikTok).Asymmetry 2 or monetization asymmetry – Non-Linear Monetization Pattern: The way the product is monetized is hidden from the average user’s eyes (in short, the average user doesn’t know and doesn’t care about how the free product is getting monetized as long as it works seamlessly). In fact, while the free users do represent the most important asset for the company (none would buy advertising from Google or Facebook if they hadn’t a large user base) they don’t pay directly through the product’s usage. They pay indirectly, as the data is repackaged, refined, rechanneled within an attention-based marketplace (as we’ll see below). Asymmetry 3 or Data/Information Asymmetry – Attention-based Marketplace supported by advertisers/marketers/businesses: The data provided by the users is repackaged in multiple ways, and usually resold on an attention-based marketplace. The attention-based marketplace is the monetization platform, which is highly scalable and built to draw in a large number of small to medium businesses, and also larger enterprise accounts (Google Ads, Facebook Ads). 

Conversely, symmetric business models usually follow the opposite route: 

Key user = Key Customer: in this case the user is also the customer. It might be that the user can benefit from the free service, to a certain extent either through a free trial, or a free version of the product. But in general the user will be prompted to upgrade based on usage, premium  features and more, or perhaps through an enterprise version of the same product (Netflix, Fastly, WordPress.com).Linear Monetization: connected on the previous point, monetization happens more linearly, as the same asset consumed by users is also the one they pay for. As an example, you get a free trial from Netflix, after the trial, you convert from user into paying customer, thus benefiting from the platform and by sustaining it as well.  Pay-as-you-go/Upgrade/Subscription-based: usually these symmetric business models rely on usage-based models, or on premium-based models or yet on subscription-based models. 

It’s important to note that when we look at very large organizations, they might be using both symmetric and asymmetric models. Perhaps, YouTube is both a free and asymmetric platform and a paid and symmetric one (with YouTube memberships). Amazon is both a symmetric platform, with Amazon prime, while at the same time selling the users’ attention on the platform via Amazon Advertising. However, each business model can be skewed toward one or the other.

For instance, Google and Facebook are skewed as asymmetric business models, whereas Netflix, WordPress, and Fastly are symmetric. 

Facebook is an attention-based business model. As such, its algorithms condense the attention of over 2.4 billion users as of June 2019. Facebook advertising revenues accounted for $31.9 billion or 98.66% of its total revenues. Facebook Inc. has a product portfolio made of Instagram, Messenger, WhatsApp, and Oculus.

Examples of asymmetric business models:

Google Business ModelFacebook Business ModelBaidu Business ModelTwitter Business Model

Main Free Guides:

Business ModelsBusiness StrategyBusiness DevelopmentDigital Business ModelsDistribution ChannelsMarketing StrategyPlatform Business ModelsRevenue ModelsTech Business ModelsBlockchain Business Models Framework

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