01 Mar, 2017

10 business models of digital disruptors

 -10 business models for digitally disruptive businesses

Once you’ve completed step 1 in your digital transformation journey, you will have set clear goals, audited your own assets and examined your wider market, you know have the basis from which to envision your new digitally transformed business. According to Digital Intelligence Today, there are 10 digital business models to consider in your digital transformation journey.

Let’s look at the business models of digitally disruptive companies:

NetflixNETFLIX – Subscription model

Netflix is a fantastic example of a disruptive business, that changed the way we watch TV. They took a product traditionally purchased on an ad-hoc basis and locked in repeat customer, by charging a small monthly subscription fee. Consumers have now entered the age of the “binge”. Instead of waiting each week for a new episode to come out, consumers can now watch entire series in one seating.

LinkedInLINKEDIN – Freemium model

LinkedIn is an example of a business that has disrupted by offering a free, basic service that can be upgraded for premium features at any time. Interestingly, the growth of LinkedIn was largely due to a cheeky growth hack. Did you ever notice how when you sign-up you are asked multiple times to import your contacts? In fact, it’s difficult not to. That’s how LinkedIn used current users to attract new ones.

FacebookFACEBOOK – Free model

Facebook sells data and advertising slots, which allows it to offer a completely free social platform to consumers. Now the number 1 social platform in the world, marketers are keen to maximize their brands’ exposure on the platform.

Now the number 1 social platform in the world, marketers are keen to maximize their brands’ exposure on the platform. This behemoth now owns Instagram and is rumored to be after Twitter.

UberUBER – Marketplace model

Uber has provided a digital marketplace for drivers, in return for a small placement fee or commissions.

Users can now leverage their own assets, in this case, their cars, to offer a service and earn a little extra cash.

airbnbAirBnB – Access-Over-Ownership model

AirBnb has disrupted the hospitality space by enabling people to monetize their assets, their homes in this case. The emergence of the ‘Sharing Economy’ has changed how consumers operate. Instead of purchasing, consumers can now gain access to goods and services on a temporary basis.


AppleApple – Experience model

Apple disrupted retail with their superior customer service, sleek marketing, and unique design.

They are a great example of a company that has put the customer and their experience at the core of their business practices and model. Also are a great example of how data has changed marketing practices.

DropboxDropbox – Pyramid model

By recruiting an army of resellers or affiliates, Dropbox grew their business exponentially.

Starting with a few users, they leveraged their clients to grow their user base. A simple signup-driven homepage, a strong refer-a-friend incentive, sharing on social and other platforms at the click of a button, and creating a mobile friendly platform are just some of the ways dropbox grew exponentially.

HandyHandy – On-Demand model

Handy has monetized the simplest of activities, that we all try to avoid – housework! By selling instant access to their service, they are taking advantage of the changing demand of consumers. With an extremely strong retention campaign, 80% of bookings are returning customers, Handy is a great example of the power of loyalty.

GoogleGOOGLE – Ecosystem model

Last but not least Google. Google has created a suite of products based on selling data or advertising slots, which allows it to offer a completely free search engine to consumers. Now the number 1 search platform in the world, marketers compete for top ad placements and to win the battle of ranking first! Being number 1 has created consumer dependency on the suite.

So it’s all well and good knowing the digitally transformative business models, but…

How do you choose between the business models?

Start by assessing your goals from step 1 of your digital transformation journey again. From here, there are 7 factors to consider that will help you to choose the right business model.

Firstly, Market Potential. You need to consider how big the market for your product is. If the market is small, an Ecosystem Model like Google is unlikely to be a good choice.

Next, use your Competitive Landscape to determine what models your competitors’ use. This is a great starting point as you can either rule out or choose a business model based on their successes or failures.

Who is your ideal Customer? Defining the qualities and needs of your customers will often be the clearest indicator of what business model you need. Handy is a good example of how this works. Their customers wanted a cleaning service that they could book whenever they needed – hence the choice for an On-demand model.

What is your value proposition? What makes you unique? Why will your customers choose your product over another? This can again be a huge indicator as to which business model suits. Apple, using the experience model, is an example of this as by offering superior customer service, they set themselves apart from their competitors.

Marketing and distribution channels will also offer insight into which business model you should choose, especially as profit can vary with each model and these channels cost!

You are running a business, therefore you need to generate revenue. Assess your core product, but also take a look at how each business model could enable you to launch auxiliary products in the future. Growth should play a role in your choice.

Last but not least, consider your strategic partnerships. Dependant on your product or service, your dependence on strategic partners will vary. You must consider their business models and how that might impact your business in the future.

For more information about how to pick your business model in the retail space, why not attend the Digital Retail Transformation Assembly in April >>

Digital Retail Transformation Assembly


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