Gennaro Cuofano's Blog, page 256
July 18, 2018
Alibaba vs. Amazon Compared in a Single Infographic
Amazon and Alibaba are two giants stores that are conquering the world. On the one hand, Amazon is already a global phenomenon. On the other side, Alibaba is expanding globally. It is interesting to compare the two business models from three standpoints:
monetization strategy
international expansion
net margins
Amazon vs. Alibaba: monetization strategy
Both Amazon and Alibaba are born as online stores. In fact, an essential part of the business is still based on the revenues coming from the online store. Indeed, Alibaba makes as much as 85% of its revenues from the core commerce, while Amazon makes almost 61% of the online stores.
It is important to notice how Amazon has been decreasing the dependence on the online stores' revenues while increasing the revenues from AWS and Amazon Prime services. In a way, it seems like Amazon is switching to a subscription-based business model (as of now the process might still take a long time).
Alibaba's revenues also come from services like Cloud and digital media and entertainment.
Amazon vs. Alibaba: international expansion
As pointed out on Forbes in 2017 its founder Jack Ma "has spent more than 800 hours flying to dozens of countries, meeting business leaders and head of states to introduce his grand vision: small businesses from all corners of the world trading freely and securely on Alibaba’s platform."
Both Amazon and Alibaba are investing considerable resources in going global. In fact, as reported on The Economist Amazon has spent over $5bn in India, while not long after Alibaba invested $500m into an Indian digital-payments company.
Amazon vs. Alibaba: net income margin
The reason I focused on this metric is that it's interesting to see the difference in margin between Alibaba and Amazon. As we've seen in the Amazon cash conversion cycle, the company can grow aggressively even by keeping a tight margin.
Amazon vs. Alibaba infographic
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Data for Alibaba financials: otp.investis.com/clients/us/alibaba/S...
Data for Amazon financials: phx.corporate-ir.net/phoenix.zhtml?c=97664&p=ir...
Data for Alibaba geographical breakdown of revenues: https://www.statista.com/statistics/2...
What to read next?
What Is Cash Conversion Cycle? Amazon Cash Machine Business Model Explained
How Amazon Makes Money: Amazon Business Model in a Nutshell
Quick Snapshot of Alibaba Business Model
The post Alibaba vs. Amazon Compared in a Single Infographic appeared first on FourWeekMBA.
Quick Snapshot of Alibaba Business Model
Alibaba is China’s biggest online commerce company. Founded on April 4, 1999, Hangzhou, China by Jack Ma.
Alibaba is the world’s sixth-largest internet company by revenue according to Wikipedia.
Alibaba business model looks a lot like the Amazon Business Model.
As specified on their annual report:
We generate most of our revenue from our core commerce segment. We also earn revenue from services associated with our cloud computing segment, digital media and entertainment segment as well as innovation initiatives and others segment. A substantial majority of our revenue is attributable to our businesses in China. See
Alibaba short background story
Alibaba was founded on Jun 1, 1999, by Eddie Wu, Jack Ma. Today they are respectively Senior Vice President and Executive Chairman.
With over eight billion dollars raised since 1999. According to Crunchbase, Alibaba has started an acquisition campaign starting in 2010 that saw the acquisition of brands like:
Daraz.pk
Ejoy Technology
Damai.cn
Wandoujia
AGTech Holdings
South China Morning Post
Youku
Yueke Software
AdChina
UCWeb
AutoNavi
Kanbox
Xiami Music Network
Umeng
Vendio
Today Alibaba represents a platform that served more than four hundred million people in 2016.
Alibaba monetization model
As reported on Alibaba annual report:
We derive revenue from our four business segments: core commerce, cloud computing, digital media and entertainment, and innovation initiatives and others. We derive most of our revenue from our core commerce segment, which accounted for 85% of our total revenue in fiscal year 2017, while cloud computing, digital media and entertainment, and innovation initiatives and others contributed 4%, 9% and 2%, respectively. We derive a substantial majority of our core commerce revenue from online marketing services. The revenue model of our
Core commerce
China commerce retail business primarily includes Taobao Marketplace, Tmall, Rural Taobao and commerce technologies and services.
China commerce wholesale business includes 1688.com. International commerce retail business includes AliExpress and Lazada. International commerce wholesale business includes Alibaba.com.
Alibaba.com
Launched in 1999, Alibaba.com is the leading platform for global wholesale trade with millions of buyers and suppliers around the world.
AliExpress
Launched in 2010, AliExpress.com is an online retail service made up of small businesses in China and elsewhere, such as Singapore, offering products to international online buyers
Other platforms
Other platforms such as Taobao, 1688.com, and Lazada are part of the Alibaba network.
Cloud computing
The cloud computing segment is comprised of Alibaba Cloud, which offers a complete suite of cloud services.
Digital media and entertainment
It primarily includes Youku Tudou and UCWeb.
Innovation initiatives and others
It includes businesses such as YunOS, AutoNavi, DingTalk.
Cost of revenues
The principal components of our cost of revenue include:
content acquisition costs paid to third parties for online media properties;
logistics costs relating to fulfillment services provided to us by affiliate Cainiao Network, primarily related to Tmall Supermarket;
traffic acquisition costs paid to third-party marketing affiliates either at a fixed price or on a revenue sharing basis;
payment processing fees paid to Alipay or other financial institutions; the cost of inventory;
expenses associated with the operation of websites, such as bandwidth and co-location fees, and depreciation and maintenance expenses for our computers, servers, call centers and other equipment; salary, bonuses, benefits and share-based compensation expense;
rebates and subsidies mainly relating to our new business initiatives;
business taxes and related surcharges; and allowance for doubtful accounts about the microloans and VAT receivables.
Alibaba business model infographic
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The post Quick Snapshot of Alibaba Business Model appeared first on FourWeekMBA.
July 16, 2018
Is Google a Monopoly? the Two-Headed Monopolist-Duopolist
Google controls more than 90% of the search industry market share worldwide. Thus, it is a monopolist in that industry. However, if we look at the digital advertising market share in the U.S. which is what generates revenues for Google. Combined with Facebook, those accounted for 73% according to cnbc.com. Thus, representing a duopoly.
How do you assess a monopoly?
A monopoly is a situation in which one player controls the whole market in a particular industry.
That means the monopolist can prevent competition out as it can charge high prices without losing market shares.
Or it can leverage its market dominance to prevent others from entering the market.
Assessing whether Google is a monopoly is a matter of perspective! For instance, economicsdiscussion.net uses three methodologies to determine a monopoly:
Concentration Ratio
That is represented by “the fraction of total market sales controlled by the largest group of sellers.“
Profit-Rate as a Measure
The profit rate looks at how hight is the profits of the monopolist. High profits mean the ability of the monopolist of attracting high profits without the risk of new entrants on the market.
Lerner’s Measure
The formula used in this case is (P-MC) / P. Where MC is the marginal cost. According to this view in a situation of perfect competition, the price charges is equal or close to MC so that the result would be zero, thus no monopoly.
Where MC becomes 0, then the effect becomes 1. In this scenario, you have a monopoly.
For the sake of simplicity, we’ll look at the net market share of Google in the search industry but also at the Google market share in the industry that allows Google to pay the bills: the digitaladvertising industry.
Google monopolized the search industry
If you look at the search industry Google monopolized the market. It doesn’t matter from which perspective you look at.
According to gs.statcounter.com Google retains more than 90% of the worldwide search market share:
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You should not be surprised as Google has been keeping a dominant position for a long time.
However, even though Google is a search engine, it monetizes through a hidden revenue business model based on advertising.
So what about that?
Google and Facebook: the duopoly of the digital advertising industry
If we change perspective and look at the advertising industry, it’s hard to believe that Google is a monopoly.
However, if we look at the digital advertising industry Google and Facebook combined have a dominant position.
As reported by cnbc.com “new data suggests that the two tech giants accounted for 73% of all U.S. digital advertising, according to Pivotal’s Brian Wieser in a note to clients, up from 63% in the second quarter of 2015.”
That means we can’t call it a monopoly but a duopoly.
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Understanding market dominance can be a matter of perspectives
We’ve seen how assessing a monopoly can be a matter of perspective. If we look at the search industry market share, Google is a monopolist. However, if we look solely at the digital advertising industry, Google together with Facebook control the market!
Everything You Need to Know About Facebook Hidden Revenue Business Model
The post Is Google a Monopoly? the Two-Headed Monopolist-Duopolist appeared first on FourWeekMBA.
July 15, 2018
The Rise of the Subscription Economy
In this blog, we covered in-depth the rise of the subscription business model as the dominant model in the tech startup world and beyond. There are several reasons for that, which are mainly addressed in The Power of the Subscription Business Model:
https://fourweekmba.com/subscription-...
In this short article, I want to report some of the numbers from the Subscription Economy Index from Zuora, a company that sells subscription management services.
As reported from Zuora:
Growth rates per customer segments:
B2B growth: 20%
B2C growth: 9%
B2A growth: 14%
Growth rates per industry
SaaS growth: 23%
Telecommunications growth: 9%
Media growth: 10%
Corporate Services growth: 5%
Average annual growth:
< $1M: 18%
$1M-$20M: 18%
$20M-$100M: 14%
$100M+: 28%
Churn rates:
B2B: 26%
B2C: 35%
B2A: 27%
Corporate Services: 35%
Telecommunications: 29%
SaaS: 25%
Media: 36%
You can consult the whole report here.
For a better understanding of the subscription business model industry read this:
The post The Rise of the Subscription Economy appeared first on FourWeekMBA.
What is SEO Hacking? How to Steal Featured Snippets with These SEO Hacks
SEO hacking is a process of quick experimentation that aims at efficiently growing the organic traffic of web properties. Where traditional SEO strategies look at a steady growth, SEO hacking finds unconventional ways to quickly gain traction. That is a process well suited for small web properties looking to scale up organic traffic against large media outlets.
In this article, we'll see SEO hacking in action on how to steal featured snippets from large and authoritative websites!
The origin story of this blog
When I started blogging back in 2015, I thought I only had to produce the so-emphasized quality content to rank on Google.
Quality content seems almost a utopia in the digital marketing world. Everyone talks about it, we all agree on it. Yet we all think about different things.
googleSo what do I mean when I say "quality content?"
In my mind quality content can be summarized in three simple ways: in-depth but essential, useful and well researched, educational yet actionable.
In short, you don't need to write a 2000+ words article, just because Google is thirsty for content. You need to follow the length that is congenial to the article, based on the topic you're covering.
Of course, quality content might mean - at least for me - something that is useful for an audience and well researched. Many small business owners are too busy focusing on keeping their enterprise profitable to spend time on researching SEO or other related topics.
Last but not least, you want to make sure people learn something they can apply quickly. However, it doesn't have to be dull. In short, also a "how to" can be compelling if adequately written.
Long story short, when I started to write content that fit those guidelines, I didn't get any traffic. Nothing at all! What was going on?
I simply missed the proper mindset. In this article, I want to show you the SEO hacking mindset. Based on continuous experimentation, curiosity and lack of preconceived ideas of what works and what not to compete against large publishing outlets!
Background story
A few weeks back in one of our daily conversations with Andrea Volpini, WordLift's CEO, we were discussing a few SEO strategies.
With Andrea, we often discuss at great length about SEO, the future of the internet and how search engines, Google, in particular, react to that.
Our conversations are a way to brainstorm ideas. That day we were walking through Via Giulia, an old street in the historic center of Rome; a road that runs parallel to the Tiber River.
One of the most famous streets in Rome during the Renaissance, Via Giulia became the home of antique dealers in the past decades. Yet today due to the crisis of antique trade, the street has become home of modern shops.
Among those shops there is WordLift. A small startup that operates at the cutting edge of semantic technologies applied to the web. That is where I work as a Head Of Business Development.
When we walk through Via Giulia, a feeling of being part of something greater permeates us, and it feels like you go back to the past, when Rome was the most powerful Empire ever existed. These feelings make ideas flow incessantly.
In that scenario, Andrea had just revealed to me a secret about Google.
I'll summarize in this way: images have their own life in Google's SERP, and if you take the time to produce original images and redirect them to your blog. That can become an effective SEO strategy to bring traffic back to your site.
It all started from there. When I heard that I began to run a few experiments.
This strategy is beginning to pay off. In this featured snippet on the keyword "cash conversion cycle" with a volume of 18,100 Google is picking the content from Investopedia and the image from my blog.
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You'll notice that the image redirects back to my blog. In this article, I show you what I did and how you can do it too.
Let's take a few steps back.
It all starts with an editorial strategy
Many think of an editorial strategy as a calendar filled up with articles for the next year. That is not the way I see it.
An editorial strategy for me is about having clear in mind what are the 2-3 topics you want to cover at great length.
Based on that you need to be flexible, and opportunist. In short, you want to keep an eye open for opportunity windows that allow you to rank on large volume keywords.
Long story short I've implemented an editorial strategy on FourWeekMBA.com by creating content that targeted specific keywords around business modeling.
Yet those articles would hardly rank for those keywords as I was competing against large websites like Investopedia.
What to do then? Either I had to change my editorial strategy or be doomed to failure. Unless...
All you need is passion and an audience
I didn't want to change my editorial strategy. In fact, I'm passionate about business modeling, and I know I can keep researching this topic for years.
Also, that is a topic with a broad audience. Thus, I had the two conditions I believe are critical to building a profitable website. I also needed a secret recipe to start ranking on those keywords though.
I began creating companion infographics with my articles, which had the size of a LinkedIn post. The aim was to provide a snapshot of business, quickly.
Those graphics would target the same keywords in the article.
Why?
Images have their own life on Google SERP, take advantage of that
If you look at the percentage of search results from Google there is one phenomenon to notice:
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In this analysis by SparkToro in collaboration with jumpshot one thing is straightforward: images play a key role in Google search results.
As pointed out by Rand Fishkin, there are two things to take into account. Number one, "Google Images shrunk, but almost entirely because Google web search took that traffic for themselves (dropping the tabs to image search, embedding more image results in the web SERPs, etc.)."
Number two "given that Google Images is sending out an even more significant portion of traffic (due to their recent changes on “view image”), investing in visual content that can perform there (and appear in a web search) feels like a no-brainer for content creators."
In other words, Google is integrating more and more images in the search results, thus making them part of the user experience. Therefore, you should be not surprised to see your pictures floating around the web, disjoined from your content and inserted in other contexts.
In fact, more and more often, images appear in the so-called featured snippets. Other times they are included in the knowledge panels.
That opens up an exciting opportunity: having original images might be a critical strategy to power up your SEO strategy. And I want to show you how to use them to gain featured snippets on very competitive keywords.
However that also opens up another challenge: as Google is thirsty for relevant content, be it text, image or video, it will happen more often than these contents will be stripped out from the context of your website to get offered in different formats.
From search results, featured snippets, knowledge panels, or voice assistants. It doesn't matter how Google will serve that content; it will be Google to make the rules of the game unless you make sure to follow two strategies.
Number one, bring all the traffic generated through those graphics or infographics toward the original blog post that features them with a simple redirection.
Second, make sure to label your images with your brand, website or whatever can help you build awareness and help you build up search volume around the so-called "branded keyword."
We'll see those two aspects more in detail in a few paragraphs.
How to find featured snippet opportunities for your images
The first step I took when I was looking for featured snippet opportunities by using original graphics was to look at featured snippets where Google only had text. Some examples below:
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As you can notice from this example, this featured snippet is very competitive as you might be going after Wikipedia, the same applies to the other examples:
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One thing you might have noticed though is that this featured snippet only comprises text. There is no image in it. Why?
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One possible reason might be that Google didn't find relevant images to include in those featured snippets.
In short, even though Wikipedia is a trusted source of information, it doesn't seem to provide original, and valuable images that Google can use within the featured snippet.
That is where the opportunity to get in that featured snippet comes in!
Let's go back to our case study and what I did to get there.
Target a competitive keyword, but with your original infographic
When I was looking for featured snippet opportunities, I had identified a long-tail keyword with a large volume: amazon cash conversion.
That keyword, at the time of this writing, has an 18,100 in monthly volume. Even though that keyword was already taken and it looked like this:
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In other words, Investopedia had a text featured snippet, but there was no image. The reason being they didn't have any compelling infographic in the text, as you can see from below:
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That is where I could have an opportunity even though there was no way Google would have taken my content in place of Investopedia. So I wrote the piece and worked on an original "companion" infographic.
Make your infographic relevant, compelling by targeting the featured snippet
I went on and produced the piece on Amazon cash conversion cycle, and that is the infographic I produced associated with the article:
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There are a few aspects you will notice.
The infographic is informative, it is quick, and it is branded.
I also picked a color that resembled The Economist infographics. Thus, making it more trusted at first glance (at least for people that know The Economist).
Structured data is the foundation of your featured snippet strategy
Structured data is about converting your content in a format that search engines can efficiently process. In other words, to make your content more sticky for the Google algorithms, structured data has become a must.
For instance, in this specific case, I used WordLift to mark up the content on my blog posts:
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The significant part is the WordLift converts my content in structured data in a few clicks and with no coding so that Google can better process it. And it does that by using a format called JSON-LD that doesn't affect the performance of the page:
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WordLift passes up a set of metadata to search engines that describe the context of the page. That also includes relevant information about the infographic featured in the article!
Redirect traffic from your infographic back to your blog post
As I use WordPress as CMS, I used a simple plugin to have traffic redirected from the image - in case it ranked through Google - to the original blog post it belonged.
In short, when you have a website, you have a list of pages that you can prioritize based on a so-called sitemap. Put it shortly; the sitemap is the way you want Google and other search engines to look at your website.
That doesn't mean Google will stick to it, but that is an indication that helps it understands a website.
Within the sitemap, you need to have also your images. In this way, you allow Google to more easily index, thus rank them (again Google will decide whether or not it makes sense, yet you give it an indication).
For that, I use a simple plugin, XML Sitemap Generator for WordPress.
Once I had the images in the sitemap, I made sure those images would be redirected via Yoast Plugin:
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Within the "Search Appearance" on Yoast, you need to go inside "Media" and set as "Yes" at the question "Redirect attachment URLs to the attachment itself?"
Here you go:
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When you click on the image of the featured snippet it will open it up:
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If you click on that image, see where it goes:
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Exactly, back to my blog post!
Create search volume for your branded keyword
Another critical aspect of your infographic is about generating search volume for your branded keyword. A branded keyword is merely a keyword that represents your brand.
For instance, in my case, that would be FourWeekMba, or four-week-mba and other possible variations.
Why is that important? A branded keyword is significant for several reasons.
First, gaining search volume on a branded keyword might tell Google that your brand/website is relevant.
Second, when you build up volume over time, you also start diversifying your marketing mix.
Thus, you'll notice more direct traffic to your blog. That's good as you don't need to rely solely on Google for a consistent stream of traffic.
With those infographics I've been building a bit of search volume around my brand:
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Of course, that is still very small. Yet when I look at my search console you can see some interesting findings:
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For the sake of simplicity, I'm just showing you the main branded keyword. In fact, in my search console, I have other variations (like fourweekmba).
What's interesting here is that on this branded keyword the click-through rate is pretty high (47,83%).
In fact, the click-through rate shows how many times, based on the number of impressions from the search results, the user clicks on my page.
That is critical as that points to Google that this is what the user was looking for. Thus, that - in theory - should make my website more trusted (this is wholly speculative).
There is also another aspect that is critical for this story.
SEO is not a short-term game
I published the article on February 26th, 2018 and for a while I just let it rank organically.
A few days ago, at the beginning of July I started to notice in the last days I was getting some organic traffic on the keyword "cash conversion cycle" yet I could not find it on the SERP:
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In fact, I was on the third page. So that made me think, and I went to check right away what happened and that is what I saw:
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In short, after about three months I managed to gain a half featured snippet with an image with my small blog by competing with Investopedia, one of the largest and most trusted sites when it comes to business.
If you'll be implementing a strategy based on positioning your images on the featured snippet, how can you make sure you're doing it right?
How to check the traffic coming from images
One way to keep track of this strategy is by using the Google search console. All you need is to go in Search Traffic > Search Analytics and filter it by images:
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In this way, you can track your marketing effort in gaining organic traffic via original infographics.
Key takeaway
As search engines evolve new opportunities arise. Thus, by keeping an open eye, you can take advantage of those opportunities even if you have a small blog.
In fact, in this case study, we saw how you can take advantage of existing text featured snippets by following this process:
look for featured snippet opportunities: when you see a featured snippet that has only text there is an excellent opportunity to position your infographic
create content on that featured snippet opportunity together with a compelling infographic targeting the same keyword
use structured data as the foundation for your featured snippet strategy
set up redirections from those images toward the blog post to which they belong
brand those infographics to generate search volume around your branded keyword
be patient and wait for it to be positioned in the featured snippet. SEO is not a short-term game!
By the time to time, you can check whether your effort is paying back by filtering the search traffic to see organic traffic from images
when that happens, double down on that strategy to gain more visibility
One key aspect to keep in mind. SEO hacking is not about finding the latest trick to win some traffic.
SEO hacking is a mindset - that mixed with limited resources, experimentation, and creativity - allows you to gain traction even on competitive terms. You just need to think unconventionally and experiment quickly.
Oh, wait! There is another critical aspect. That pertains to voice search. What do I mean? Look at this short video:
When you shift your mindset and start targeting featured snippets, interesting things can happen.
Indeed, this is even more interesting than the featured snippet itself. In fact, in the featured snippet the image is too small for users to click on. Yet on the voice search assistant on your smartphone, the opposite happens.
The infographic "eats up" the text coming from Wikipedia!
In fact, not only the image seems part of Wikipedia (Google is tricking you) but when you tap on it you land on my blog!
But that is another story we'll tackle in another case study 
July 12, 2018
Amazon Case Study: Why from Product to Subscription You Need to “Swallow the Fish”
In this article, we're going to see an interesting case study and how Amazon seems to be changing its business strategy.
In fact, since 2014 Amazon has been pushing more and more from a solely product-based
We'll see how and what this implies.
The power of the subscription business model
On this blog we covered at great length the power of the subscription business model.
Many tech companies are switching from a product-based business model to a subscription business model.
In part, this is due to the fact that cloud technologies offer themselves for consumption. In part, that is also a mindset shift from ownership to usage.
For instance, Amazon is pushing to bring as many people as possible to become part of their Amazon Prime Program.
This isn't by chance. In fact, Amazon has been investing massive resources to enhance their membership revenues. That's also the reason why Jeff Bezos said: "When we win a Golden Globe, it helps us sell more shoes."
In fact, Amazon is investing billions of dollars in their Studios to develop as much original content as possible in order to attract as many subscribers, within the Amazon prime program.
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In 2017, Amazon revenue generation still saw its online stores as the primary source of income.
However, there are two important aspects to point out.
First, as Amazon uses the so-called cash machine revenue generation, which implies tight profit margins.
In short, Amazon leverages on its inexpensive prices, to hook as many people as possible to the Amazon marketplace.
Second, even though subscriptions still represent only 5.47% of Amazon total revenues, they grew exponentially since 2014:
As pointed out on Amazon 2017 annual report, in relation to Amazon Prime:
13 years post-launch, we have exceeded 100 million paid Prime members globally. In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the U.S. now receive unlimited free two-day shipping on over 100 million different items. We expanded Prime to Mexico, Singapore, the Netherlands, and Luxembourg, and introduced Business Prime Shipping in the U.S. and Germany. We keep making Prime shipping faster as well, with Prime Free Same-Day and Prime Free One-Day delivery now in more than 8,000 cities and towns. Prime Now is available in more than 50 cities worldwide across nine countries. Prime Day 2017 was our biggest global shopping event ever (until surpassed by Cyber Monday), with more new Prime members joining Prime than any other day in our history.
That is also why Amazon is doubling down with initiatives like Amazon Prime Day:
What can we expect from this change in business strategy?
The fish model explained
Changing a business model isn't a simple or linear process.
Instead, that is a process that requires tinkering, experimentation and most of all long-term vision.
In fact, it isn't surprising to see revenues and profits fall when companies switch their focus from a product-based to subscription based.
This process is called fish model:
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Source: tsia.com
As explained on tsia.com:
Whether you're a traditional tech company making the pivot to the Cloud or a born-in-the-cloud business, there's a financial “fish" in your future that you will need to swallow.
In short, in transitioning the business toward the subscription model an initial decrease in revenues and an increase in costs will be experienced. This financial situation takes the shape of a fish.
Until - as pointed out on tsia.com -"you begin to transition from the money-losing, rapid-growth phase to a more steady-state pattern of slower (but profitable) growth."
Key takeaway
Many tech companies are experimenting with new business models. This is a normal process.
In fact, as economic, technological, socio-cultural scenarios change, companies need to adapt at a aholistic level.
That requires a swift move toward new business models. It's interesting to see how Amazon is moving toward a subscription business model and what that implies.
In fact, most companies that start experimenting with subscription models - especially when coming from a product-based business model - experience periods of losses that are known as "swallowing the fish."
Is Amazon going to swallow the fish successfully?
What to read next:
https://fourweekmba.com/subscription-...
https://fourweekmba.com/amazon-busine...
https://fourweekmba.com/amazon-strate...
https://fourweekmba.com/amazon-prime-...
The post Amazon Case Study: Why from Product to Subscription You Need to “Swallow the Fish” appeared first on FourWeekMBA.
July 8, 2018
What Is Frugal Innovation? Frugal Innovation and Why Less Is More
In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.”
Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.
The word Jugaad was popularized in the book Jugaad Innovation, where Jaideep Prabhu defines it as “frugal, flexible, and inclusive approach to problem-solving and innovation.“
In this article, we’ll use frugal innovation and “Jugaad” as synonyms.
The three key ingredients of frugal innovation
For some people, frugal innovation might sound in a way as the art of improvising. However, frugal innovation or Jugaad has three key ingredients:
Inexpensive but not cheap
Frugal innovation is about finding smart solutions with limited resources.
As those solutions are inexpensive, much associate frugal innovation with “cheap” or of scarce quality. Instead, frugal innovation creates solutions that work well at a low cost.
Thus, passing those economic advantages at the final customers.
It’s not an art; it is a mindset
Thus, frugal innovation isn’t the art of improvising. Instead, that is a process of channeling creativity to develop and market an idea with limited resources.
Even though many see limited resources as a drawback; in reality, in the frugal innovation model, the limited resource is what makes those applying the frugal innovation framework able to find smart solutions.
Jugaad is also about the informal economy
In the western world, it’s easy to think about an economy as a set of official data that uncovers how the real world works.
In reality, the real world, especially in emerging economies is as much (if not more) driven by informal processes than the formal ones.
Examples of frugal innovation
Let’ see some examples of frugal innovation:
Nano
The Nano car from Tata Motors is often cited as an example of frugal innovation. However, this car which was thought of as an inexpensive version for the Indian market has stopped production as of May 2018.
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This is the listing price of the Nano in Indian Rupee:
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M-KOPA: the home solar solution that comes in a box
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As specified on the website:
Customers buy the solar home system on an affordable M-KOPA payment plan, with an initial deposit followed by daily payments for up to one year. After completing payments, customers own the product outright.
The most interesting part though isn’t only the product itself, but the alternative business model used to allow anyone to purchase one.
How do you pay for it? The cost of $200 would be too expensive for Kenyans, which is the market that this product targets.
Therefore, you pay with a simple deposit of $25; then you make daily micropayments of 45 cents using the mobile phone. Why is this special at all?
Well, those micropayments are made via a mobile payment system that is itself the result of frugal innovation.
GThrive
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As reported on gthrive.com:
The gStakes talk to each other and to the gLink base station over a proprietary radio link. The gLink connects to the Internet over your Wi-Fi network, or uses the cellular telephone network (and requires a low cost subscription). You can access your data from our secure servers over the Internet, whether on your computer, smart phone or tablet. Set-up is easy, and the gStakes are simple to move at any time.
Be-Bound
As specified on Be-Bound:
It optimizes data and expands mobile and IoT coverage to reach 95% of the population worldwide, using pre-existing networks
Our frugal innovation allows you to do more with less, and presents three major advantages :
No additional infrastructure costs, no investment required.
Easy to deploy on existing networks (already operational in several countries).
Connect more people immediately, even in untapped areas.
Creative problem-solving in the face of extreme limits
From Navi Radjou TED there are a couple of critical aspects of frugal innovation.
In fact, as Navi Radjou pointed out you take what’s abundant to deal with what is scarce. In short, abundance in some areas can be used to deal with scarcity in other areas. Take the Be-Bound case above; it uses existing technologies that are available to the majority of the population to bring connectivity.
Frugal innovation often opens up new and smarter business model based on the “more with less” instead of the “more for more” of existing business models in the western world are often flawed and carry many hidden costs for society. As Navi Radjou points out:
This more for more model is running out of gas, for three reasons: First, a big portion of customers in the West because of the diminishing purchasing power, can no longer afford these expensive products. Second, we are running out of natural water and oil. In California, where I live, water scarcity is becoming a big problem. And third, most importantly, because of the growing income disparity between the rich and the middle class in the West, there is a big disconnect between existing products and services and basic needs of customers.
Key takeaway
As the western world dominates the global economy, we give for granted that the process, methodologies and business models we adopt are the best possible.
However, what we like to call the “Third World Country” can teach us way more about innovation and sustainable business models that we might like to think.
In this article about frugal innovation, we’ve seen how alternative business models, based on limited resources can create solutions that are smarter than the traditional ones we see in the western world.
The post What Is Frugal Innovation? Frugal Innovation and Why Less Is More appeared first on FourWeekMBA.
3 Tools for Professional Bloggers to Create Awesome Content
As a professional blogger if you want to generate a stream of qualified traffic that allows you to monetize your site you need an editorial strategy.
An editorial strategy doesn’t necessarily mean that you have to know what to write about in the next year or so. An editorial strategy can simply mean to have clear in mind what are the 2-3 topics you want to cover within the coming months.
In short, this is an important aspect to keep a clear direction and strategy to grow your blog.
In some cases though generating a constant stream of ideas can get hard, especially if you’re trying to be consistent and publish more then once per week.
In order to avoid running out of blog ideas, I want to show you three tools you can use to uncover an unlimited number of topic ideas and make your blog grow.
Tweak Your Biz Title Generator
Tweak Your Biz has created a tool, called Title Generator:
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This tool pretty simple. You only need to insert a topic idea in the title generator box and get suggestions:
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As you can see the recommendations of the tool will comprise things like lists, best, how to and so forth.
To give you a quick idea of the titles the tool suggests you. See some examples below:
Lists:
Apply These 8 Secret Techniques To Improve Content Marketing
Believing These 8 Myths About Content Marketing Keeps You From Growing
Don’t Waste Time! 8 Facts Until You Reach Your Content Marketing
Best:
Best Content Marketing Android Apps
Best Content Marketing Tips You Will Read This Year
Best 60 Tips For Content Marketing
How to:
How To Make More Content Marketing By Doing Less
How To Make Content Marketing
How To Buy A Content Marketing On A Shoestring Budget
Questions:
Are You Embarrassed By Your Content Marketing Skills? Here’s What To Do
Do You Make These Simple Mistakes In Content Marketing?
Do You Need A Content Marketing?
At the end of the page you have the option to copy all the titles the tool has generated for you:
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As simple as that!
Hubspot’s blog ideas generator
As pointed out via Hubspot:
“I don’t know what to write about.” It’s a thought that has crossed every blogger’s mind. But let us let you in on a little secret: There’s no such thing as running out of blog ideas.
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The ideas generator is quite simple. You can enter up to three nouns and hit “give me blog ideas!” and Hubspot tool will do the work for you:
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Once again this is a tool that can serve you as a compass to generate ideas when they seem to run out.
Potent Title Maker
Potent has also created a tool, called title maker:
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You can enter a topic in the “enter your subject here” and hit refresh. The title maker will come up with suggestions based on certain characteristics. You can hit refresh to get new ideas.
Key takeaway
In this article, I wanted to show you three tools that could help you generate unlimited ideas around the few topics that are part of your editorial strategy.
Those ideas can be a great help in times in which they seem to be running out.
Being consistent in publishing relevant content for your audience is critical for any professional blogger.
With those three simple tools, you can make sure you never run out of those ideas!
Other handpicked articles for professional bloggers:
Best Qualified Traffic Growth Strategies from Five Top Digital Marketers
The post 3 Tools for Professional Bloggers to Create Awesome Content appeared first on FourWeekMBA.
July 5, 2018
Business Model Tools for Small Businesses and Startups
In this article, we’ll see three one-page tools to give entrepreneurs clarity of mind on their overall business in order to take actions to build a sustainable venture that unlocks value for many players in the long-term.
Business model canvas
The nine building blocks of the business model canvas comprise vital partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure and revenue streams.
The business model canvas comprises nine building blocks:
Key partners
Key activities
Value proposition
Customer relationship
Customer segment
Key resource
Distribution channel
Cost structure
Revenue stream
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Lean startup canvas
The lean startup canvas is an adaptation of the business model canvas by Alexander Osterwalder, which adds a layer to the traditional business model canvas that focuses on problems, solutions, key metrics and unfair advantage based on a unique value proposition.
You can learn more about the lean startup canvas:
What is the lean startup methodology?
Business plans rarely survive first contact with customers
Five-year plans are worthless and a waste of time
Start-ups are not smaller versions of large companies
The lean start-up movement is about agile development
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Value proposition canvas
A value proposition is about how you create value for customers. Value Proposition Canvas is a methodology which integrated with the business model canvas can help you design a value proposition for your business model.
For a deep dive into the value proposition canvas:
What is a value proposition?
The customer profile
Understand what’s important and what’s insignificant about customer jobs
Understand what extreme and what’s moderate about customer pains
Understand what’s essential and what’s nice to have by generating customer gains
The value map
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Key takeaway
Building a startup, a small business or a solo business isn’t a simple process.
Instead, that is a process that requires a lot of ongoing experimentation, feedback loops with customers, back to the product and back to the market.
This process can be simplified with simple tools that in a page can allow the entrepreneur to have a clear idea about the business and start taking actions to build a sustainable business model!
The post Business Model Tools for Small Businesses and Startups appeared first on FourWeekMBA.
Five Business Model Examples in a Single Infographic
On this blog, we often cover startups, small or solo businesses use business modeling and how to get clear about the kind of business models.
A business model is just a way to capture value. There isn’t a right or wrong business modeling, but instead finding the proper business model is a matter of experimentation, tinkering, and tweaking.
That is why startups and small businesses don’t need grandiose plans but just simple tools to assess in a single page how to act.
That is also why tools like business model canvas, lean startup canvas, and value proposition canvas help entrepreneurs get clear about their business models, unique differentiator and value proposition:
What Is a Business Model Canvas? Business Model Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is a Value Proposition? Value Proposition Canvas Explained
I argue that looking and finding a business model is almost like a quest for meaning.
In fact, just like a human being doesn’t find happiness in life until she’s not able to define a meaningful way to live.
So businesses won’t be able to capture value in the long run if they don’t find their proper business models.
Manu entrepreneurs believe that business modeling is about monetization. While finding a business model is also about the revenue model chosen by the entrepreneur that is just a build block.
In fact, tools like business models canvas have several building blocks that are critical to have a holistic assessment of any business.
In this specific session we’re looking at five business models:
Google business model
Amazon business model
Apple business model
LinkedIn business model
Quora business model
There are a few things to keep in mind about a business model.
Business models are dynamic
Many have the impression that a business model is something static, that doesn’t change. However, business models do vary.
In fact, for smal businesses and startups in most cases finding the proper business model is a quest.
And even when they find it, they need to keep tweaking it to allow a growth sustained by the value creation for several players.
Take Amazon, when it started it only sold books. Today Amazon sells pretty much anything.
While the value proposition hasn’t changed much. Its business model is changing a lot. In fact, Amazon is willing to win the golden globe to sell more shoes.
“Business-market fit” isn’t a short-term game
Finding the proper business model is even harder than achieving product-market fit.
In fact, you might have a product or service that finally has a market. But if that product or service sits on top of a business model that is not sustainable, it doesn’t matter how much tinkering you do. Eventually, your business will fail.
Once you find the proper business model you’re fine for a long time
When Google switched to become an advertising company its growth in revenues was exponential.
In a few years, it took over the online advertising industry. The same happened with Facebook.
Finding a business model that unlocks value means winning the lottery ticket as for a long time the company will keep producing a stream of revenues that guarantees profitability and cash flows that can be invested in another part of the business.
A business model is also about you
Unless you run a large corporation or a startup that take outside investments finding a business model isn’t just about growing.
Instead, that is about what kind of business model would fit you best as a person. What would make you happier? What would unlish your creativity? What would give you more freedom?
In short, it is as much abou unlocking intangible values rather than money.
Have you found your business model yet? Let us know!
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