Traits of Unique Business Models

Alex Osterwalder, with his Business Model Canvas, made the world realize the significance of thinking through the business model of an organization. The nine building blocks, suggested by him are so simple to understand at the first glimpse, that they sound like common sense. However, when you sit down to answer the questions that Osterwalder raises in each of those blocks, the profundity of it all strikes and you realize how little you have thought of your business model all these years that you have been in business. That’s the time when you feel, ‘How mindlessly I have been running my company? Had I thought of these simple-looking questions earlier, my company would have been on a different trajectory, five years back.” Mind you, this feeling is not restricted to a start-up founder, it equally captures the thought process of honchos at large corporations too.

One strong realization that Osterwalder’s canvas has left the business world with is, “You don’t need breakthrough technology or products to capture market share, you only need ingenuous ways of doing business, be it creating new revenue streams, creative collaborations or unique relationships with your customers.”

With this realization, about three years ago, I began to look at businesses (small and large) which DID NOT HAVE ANY BREAKTHROUGH TECHNOLOGIES OR PRODUCTS yet commanded good customer traction. As I came across more and more such businesses, I started seeing some typical traits that these businesses displayed. In this interesting exploration, I was joined by some of my enthusiastic students viz. Tanvi Raorane, Meet Ganatra, Priyal Kumar, Zoya Versey & Anirudh Naik who helped me identify more such companies. Tanvi helped lend a much deeper focus to the study with the analysis.

Our quest spanned ninety companies functioning across all continents. The focus, as mentioned earlier, was not on companies with blockbuster technology or products, but on companies that went around doing their business differently, i.e. companies offering regular products or services but doing so in the unique ways. We looked at companies from multiple sectors ranging from RETAIL, HOSPITALITY, FMCG, MOBILITY, EDUCATION, FASHION, RECRUTING, ENTRERTAINMENT to NGOs.

Use of technology as an enabler was a major driving force behind the functioning of these companies. Almost all these companies made great use of technology (the web and mobile platforms) to entice consumers, network with vendors and service providers, promote their wares, optimize costs etc.

Claiming that ‘Use of Technology’ is a unique trait is a no-brainer. Any business, worth its salt, today, is using it.

However, following are some interesting findings that we stumbled upon as a result of this study (for each trait, I have listed out an example or two in the following text).

Traits of Unique Business Models:

 

Trait 1:

Double Whammy: Milking both ends of the value chain, i.e. making money from the consumers as well as the service providers.

Hair styling salons, by Jawed Habib Hair & Beauty Ltd, with its brand of Hair Xpresso outlets, offer the Indian youth designer haircuts at an extremely affordable price (beginning as low as Rs.99). All the stylists employed at these outlets are trained at and certified by Jawed Habib’s Hair Academy. The company charges these trainees a regular training fee and these trainees, in turn, get to hone their newly acquired skills on paying customers. In effect, the company makes money from consumers as well as the suppliers (in this case the trainees), i.e. from both ends of the value chain.

More about the Traits of Unique Business Models in our next post.

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