Billion Dollar Brand Club: How Dollar Shave Club, Warby Parker, and Other Disruptors Are Remaking What We Buy
by Lawrence Ingrassia · 28 Jan 2020 · 290pp · 90,057 words
market share and forcing it to cut prices for the first time in memory. More than that, Dubin, in the process, helped announce a disruptive business model for twenty-first-century entrepreneurs to take on previously unassailable consumer brands. In most ways, Michael Dubin, the founder of Dollar Shave Club, could hardly
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the entrepreneurs at the vanguard of this revolution, though that wasn’t exactly what he was thinking when he first got the idea of selling razors and blades on the internet. * * * Out of work, Dubin was looking for his next opportunity when he attended a friend’s holiday party in Beverly Hills in
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of consumer products he’d purchased in bulk a while back that he was having a hard time unloading, including cake slicers and off-brand razors and blades (some 250,000 twin-blade cartridges in all). All were sitting in a nearby warehouse running up unpaid storage fees, a fact he didn’t
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. Even as Dubin was starting to work with Pham to raise money, he was searching for an answer to another problem: a source of better razors and blades. The initial batch his partner Mark Levine had purchased and stored in the warehouse were old-fashioned twin-blade razors, which were unlikely to be
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make its blades. It just put its name on them after buying them from Dorco. Founded in 1955 as a knife maker, Dorco began making razors and blades in 1962. It didn’t have to compete with Gillette back then because its home market in South Korea was largely closed to imports until
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long as Gillette. After successfully storming the market in the early twentieth century with its groundbreaking double-edge disposable blades, Gillette entrenched itself as the razor and blade of choice thanks in part to the U.S. government. During World War I, the military ordered 3.5 million razors and 36 million blades
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share for decades had hovered around a virtually monopolistic 70 percent—unheard of for a consumer product. The company was impregnable, selling $4 billion in razors and blades worldwide every year and traditionally enjoying rich profit margins of around 50 to 60 percent—which prompted the consumer product giant Procter & Gamble to buy
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that it was between 5 percent and 8 percent. The price? Zero. As part of the deal, Dorco signed a long-term agreement to supply razors and blades to Dollar Shave Club until 2019. Dubin had little choice but to acquiesce and give a piece of his company to Dorco. “Let’s just
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Raider, one of the four cofounders of Warby Parker, the online eyeglass company, helped start a copycat competitor, Harry’s; in 2013, it started selling razors and blades made by a German manufacturer, which Harry’s would eventually buy, pursuing a different strategy from Dollar Shave Club’s supplier relationship with Dorco. The
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Shave Club, Pakman has been far more selective than Green in placing bets on direct-to-consumer brands. In addition to looking for products or business models that can’t be easily or quickly duplicated, he looks for categories where the dominant players sell largely through retailers and depend on broadcast advertising
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adviser. “If Dollar Shave Club and Harry’s can do it with blades, why not contact lenses? It’s a different product, but the same business model.” Levy had always been perplexed that one-day disposable contacts were used by only one-fourth to one-third of contact lens wearers in the
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they preferred and pay penalties if their order volume fell short. They also scrapped the complicated on-demand production that had been part of their business model. But the Chinese company’s R&D team worked with ThirdLove to create a lightweight, soft memory foam that better molded the cups to the
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be known for,” Lai says, given the somewhat unsavory, high-pressure sales reputation that some for-profit colleges had. “We were trying to understand their business model.” Pujji and a handful of colleagues piled into two cars and drove to Facebook headquarters in Silicon Valley. He recalls, laughing, “I don’t think
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what someone could get at a hair salon. If you could do that, you could charge a price that was a premium. There’s a business model.” He went back to his former PriceGrabber colleagues, all men who knew nothing about hair coloring. Still, the more they thought about the idea, the
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in a few years, so we would have to find new robots for our warehouse.” Welty and Johnson were unnerved. They had built their entire business model around an automated warehouse. Kiva robots were essential to their business. After starting with just ten Kiva robots initially, their warehouses now deployed two hundred
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and lose some of your current revenue.” Murphy and Traub understood that competing against the company’s existing brands by creating a new brand and business model wouldn’t be easy. Murphy, who grew up in the Detroit area, knew this well from the recent example of General Motors. In 1990, the
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blue jeans. The whole ambiance had an uncanny resemblance to Casper’s office, about thirty blocks to the south, near Union Square. Tomorrow Sleep’s business model mimicked that of the online, bed-in-a-box start-ups: Price your mattress for half or less what retail stores charge for similar-quality
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first offering was a hybrid mattress with foam on the top and springs on the bottom, combined into one piece. While praising and copying the business model of the online start-ups (free deliveries, long home tryouts, and free returns) Murphy expressed confidence that a differentiated mattress could effectively counter them. “I
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faster by direct-to-consumer start-ups than even their backers expected, hearing aids have been far slower, even though they have adopted the same business model: lower prices and free returns for a product that offers many of the key features of established brands. For all the similarities, there are differences
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an expensive high-end hearing aid, was trying to democratize the market by selling a lower-priced product online. Another start-up, Audicus, pursued a business model akin to that of Dollar Shave Club, reselling under its own brand a German-designed hearing aid. They both sold behind-the-ear hearing aids
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more than a half dozen new entrants: Quip, Goby, Boka, Burst, Bruush, Shyn, Gleam—and Gleem, a copycat from Procter & Gamble. Most share a similar business model: short names, automatic timers, and some with two versions (plastic at a lower price, metal at a higher price), a subscription that includes a new
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is definitely going to happen in e-commerce. It’s like I’m living the same movie again,” says Delug. “I was smitten by the business model right out of the gate.” Mohawk subsequently raised additional VC funding, bringing total investment to $72.6 million by 2018. One of its lead investors
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, in 2010, other start-ups have launched well over a dozen new online eyeglass brands. Many of the newcomers are copycats with essentially the same business model as Warby Parker, but others are niche players, such as Lensabl, which will make prescription lenses for your favorite frames so you don’t have
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Shave Club had a 10.5 percent share and Harry’s had a 3.2 percent share of the U.S. market for men’s razors and blades as measured in dollars in 2018. Although Euromonitor doesn’t track unit volume, the two companies’ combined market share as measured in the number of
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razors and blades sold would be higher, probably approaching around 20 percent, because their products are less expensive. It is equally hard to imagine Gillette: Euromonitor International estimates
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that Gillette had a 52.8 percent share of the U.S. market for men’s razors and blades as measured in dollars in 2018. 90 percent had lost market share in recent years: “Catalina Mid-Year Performance Report Finds Challenging Market for Many
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Innovation quality vs. value Quartz website Quiet Logistics Quip quizzes Raden radio advertising Raider, Jeffrey Ralph Lauren Ravenna Home “Raw Egg Test” video Ray-Ban razors and blades Read, Kaki Red Ventures Reformation Reifsnyder, Liz Related Companies remnant spots Restoration Hardware retail stores brand-name goods and brick-and-mortar, for DTC start
Platform Revolution: How Networked Markets Are Transforming the Economy--And How to Make Them Work for You
by Sangeet Paul Choudary, Marshall W. van Alstyne and Geoffrey G. Parker · 27 Mar 2016 · 421pp · 110,406 words
, and how they are being leveraged by startup businesses that are using them to dominate traditional industries and launch new ones. Realizing that the platform business model is the leading embodiment of these forces, we began branching out from our academic and corporate backgrounds to work closely with companies that are deeply
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during the dot-com boom of the 1990s, but he was already fascinated by the immense power of the Internet—particularly its power to create business models capable of rapid, scalable growth. Later, while working as the head of innovation and new ventures at Yahoo and Intuit, Sangeet started digging deeper into
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the factors that spell success or failure for Internet startups. His research on business model failure, coupled with his conversations with venture capitalists and entrepreneurs, helped him identify the increasing importance of a new and massively scalable
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business model: the platform. In 2012, Sangeet started focusing on platform businesses full-time. His premise: as the world becomes increasingly networked, businesses that do a better
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, let alone market dominance? And why is this happening today in one industry after another? The answer is the power of the platform—a new business model that uses technology to connect people, organizations, and resources in an interactive ecosystem in which amazing amounts of value can be created and exchanged. Airbnb
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businesses. In fact, in 2014, three of the world’s five largest firms as measured by market capitalization—Apple, Google, and Microsoft—all run platform business models. One of these, Google, debuted as a public company in 2004. Another, Apple, nearly went bankrupt a few years earlier—when it still ran a
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closed business model rather than a platform. Now incumbent giants from Walmart and Nike to John Deere, GE, and Disney are all scrambling to adopt the platform approach
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. Everyone wins except Hertz and the other traditional car rental companies. TV stations built studios and hired staff to produce video. YouTube, operating a different business model, has more viewers than any station, and it uses content produced by the people who watch it. Everyone wins except the TV networks and movie
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struggling to come to grips with the rise of the platform. In the chapters that follow, we’ll provide a comprehensive guide to the platform business model and its growing impact on practically every sector of the economy. The insights we’ll share are based on extensive research as well as our
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-building tools, such as price effects and brand effects. Misunderstanding of these distinctions is a source of the current confusion over how to value platform business models, and contributed to the dot-com boom and bust of 1997–2000. During the dot-com boom, investors in startups like eToys, Webvan, and FreePC
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a platform to grow rapidly. Threadless is a T-shirt company founded by people with expertise in information technology services, web design, and consulting. Their business model involves holding weekly design contests open to outside participants, printing only T-shirts with the most popular designs, and selling them to their large and
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also minimize its handling and inventory costs. Thanks to this almost frictionless model, Threadless can scale rapidly and easily, with minimal structural restrictions. Threadless’s business model arose by accident. The founders originally thought they were in the web services business, selling consulting to firms who needed websites. But selling web consulting
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repeatedly. Uber, for example, recruits new drivers from among its rider pool, just as Airbnb recruits new hosts from among its guest pool. A scalable business model, frictionless entry, and side switching all serve to lubricate network effects. NEGATIVE NETWORK EFFECTS: THEIR CAUSE AND CURE So far, we’ve been focusing on
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men at all attractiveness levels converge on the women in the second most beautiful tier, and the whole process repeats. Network effects reverse, and the business model breaks down. To solve this problem, OkCupid implemented a curation strategy involving multiple levels of network matching. The first level addresses the obvious issue of
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from the beginning. In early 2015, both Uber and Lyft began experimenting with a new ride-sharing service that complements their familiar call-a-taxi business model. The new services, known as UberPool and Lyft Line, allow two or more passengers traveling in the same direction to find one another and share
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distribution channel (a pipeline). It also acts as a creation infrastructure and a coordination mechanism. Platforms are leveraging this new capability to create entirely new business models. In addition, the physical and the digital are rapidly converging, enabling the Internet to connect and coordinate objects in the real world—for example, through
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ultimately take over their industries? Not necessarily. But if incumbents hope to fight the forces of platform disruption, they’ll need to reevaluate their existing business models. For example, they’ll need to scrutinize all their transaction costs—that is, the money they spend on processes such as marketing, sales, product delivery
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trying, usually in vain, to hurriedly build a copycat platform after their industry has been colonized. The leaders of incumbent companies who understand the new business model can begin building tomorrow’s platforms in a way that not only leverages their existing assets but strengthens and reinforces them. So platforms are eating
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. Picker of the University of Chicago Law School has called into question the traditional story of Gillette and the razors-and-blades pricing strategy. Picker found that the timing of price changes for Gillette razors and blades, as well as the expiration date on the patent covering Gillette’s unique razor design, seems to undermine the
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notion that the company was employing the razors-and-blades strategy as commonly understood.1 Nonetheless, the familiar story remains a handy symbol for a strategy that has been used in a number of markets
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layer of service attracts users who eventually pay for an enhanced version. Many online service platforms, including Dropbox and MailChimp, work this way. Both the razors-and-blades model and the freemium model monetize the same user base, or portions thereof. Platforms may also offer free or subsidized pricing to one user base
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and kinds of openness. These variant openness regimes will attract different kinds and numbers of participants, generate distinct ecosystem cultures, and may ultimately produce divergent business models. As we’ve previously observed, two platforms that made very different openness decisions are Apple’s Mac operating system/hardware combination and Microsoft’s Windows
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growth phase, thoughtfully designed metrics can help platform managers develop accurate answers to questions like these. Finally, as the platform matures and a self-sustaining business model has been developed, the challenge of user retention and growth requires the platform to innovate. This is the best way to maintain and enhance the
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enjoy a 10x multiple in value relative to other firms that have comparable revenues but lack network effects.22 With their current product focus and business models, Houghton Mifflin Harcourt, NBC, Lexis, and Whirlpool do not have strong network effects. Amazon, Netflix, LegalZoom, and Nest do. Because positive network effects attract more
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the disruptive impact of platform businesses on traditional industries. It’s natural that companies and workers whose profits and livelihood may be threatened by new business models will fight back by any means available, including seizing on evidence, meaningful or not, that the new models are causing economic, environmental, social, or cultural
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public by a startup company is likely to be relatively small, especially when compared with the potential positive effects to be derived from innovation, new business model development, and economic growth. The time to apply the rules more stringently will come later, once the start up has grown to the point where
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firms ignore the rules, we effectively penalize those that comply with the law, while granting windfalls to free-wheeling competitors. That’s surely not a business model consumers are looking for.61 We close with some general principles of regulatory guidance: Where possible, we would hope that regulators will move to make
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to technological change. Old regulatory practices, such as the predatory pricing tests developed for non-network industries, simply do not work for new technologies and business models. Regulation must incorporate the recent advances in economic theory that show that firms can still be maximizing their profits even when they choose to distribute
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entire sectors of the economy, marginalizing incumbents and enabling small startups to rise rapidly to global dominance. It’s rare to see a single new business model sweep the field in so many industries so quickly. Still, you might be feeling that we’ve been overstating the impact of the platform, at
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largely unaffected by the rise of the platform. That’s true—so far. But these and other arenas are already seeing the encroachment of platform business models. In the years to come, we believe it’s likely that platform businesses, while not claiming control of every aspect of these economic sectors, will
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which people and things are moved efficiently from place to place—are resource-intensive industries that were once largely unaffected by the emergence of digital business models. Logistics companies such as FedEx have enjoyed significant competitive advantages because of the huge fixed costs of owning a fleet of cars, trucks, and planes
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to the Internet of things, making even more powerful value-creating platforms possible. Applied to the Internet of things, platform economics will dramatically alter the business models associated with countless familiar goods and services. Take, for example, the familiar lightbulb. Originally patented by Thomas Edison in 1878, the basic engineering of the
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both winners and losers. The platform revolution is no exception. We’ve already seen the problems some long-established industries are suffering as their familiar business models are upended by the advent of platforms. From newspaper publishers to record producers, taxi companies to hotel chains, travel agents to department stores, numerous businesses
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companies and organizations that have provided research funding and have made their employees available to us in support of our effort to better understand network business models. Geoff Parker and Marshall Van Alystne are grateful to organizations that include Accenture, AT&T, British Telecom, the California ISO, Cellular South, Cisco, Commonwealth Bank
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grateful to everyone who has followed my work on platforms on the Internet and across different research and media channels, embracing the principle of connected business models and my work on this topic as they work to transform their businesses. It is that large-scale proof of concept—multiple businesses globally applying
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/4/7982099/twitter-ceo-sent-memo-taking-personal-responsibility-for-the. 7. Juro Osawa, “How to Understand Alibaba’s Business Model,” MarketWatch, March 15, 2014, http://www.marketwatch.com/story/how-to-understand-alibabas-business-model-2014-03-15-94855847. 8. Brad Burnham, “Web Services as Governments,” Union Square Ventures, June 10, 2010, https
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://scholarship.law.berkeley.edu/cgi/viewcontent .cgi?article=1961&context=btlj. 61. Benjamin Edelman, “Digital Business Models Should Have to Follow the Law, Too,” Harvard Business Review, January 6, 2015, https://hbr.org/2015/01/digital-business-models-should-have-to-follow-the-law-too. CHAPTER 12: TOMORROW 1. Brandon Alcorn, Gayle Christensen, and
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–73, 182, 221 assets of, 9, 68–71, 160, 180, 181, 209, 212, 220–21, 238, 260 authors’ research on, ix–xi, 23–24 as business model, vii, 35, 60–62, 64, 66–67, 73–77, 163, 184–86, 188, 258 capitalization of, 9, 16–18, 82, 109, 145, 278 compatibility of
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railroads, 209, 225 random access memory (RAM), 56, 57, 58 Rangaswami, J. P., 245–46 rate of conversion to sale, 197 ratings, 157–58, 265 razors-and-blades strategy, 109–10 Real Audio, 222 real estate market, 9, 12, 62, 124, 237, 277, 282 RealNetworks, 222 real-time processing, 247, 252–53 recipients
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MIT. Reach him at @InfoEcon. Sangeet Paul Choudary is the founder of Platform Thinking Labs and a C-level advisor to executives globally on platform business models. He is an Entrepreneur-in-Residence at the INSEAD Business School and a Fellow at the Centre for Global Enterprise. He also writes the popular
The Content Trap: A Strategist's Guide to Digital Change
by Bharat Anand · 17 Oct 2016 · 554pp · 149,489 words
little conflict of the sort. Advertiser-dependent companies continuously struggle to reduce or manage the inevitable negative connections between their users and advertisers. Tencent’s business model allowed it to focus on leveraging positive ones. It’s tempting to dismiss the success of Tencent and the other “Big Three” Chinese Internet companies
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’s a clear win for the consumer electronics device world but a potential disaster for the content companies.” Another noted, “In many ways, Apple’s business model for the iTunes service is very closely aligned to that of the online pirates they’re so desperate to destroy.” Apple had transitioned from a
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prescriptions cause you to adopt an overly narrow lens and define too-restrictive boundaries. Some complements are obvious: Hot dogs and ketchup, printers and cartridges, razors and blades, right and left shoes. But many are not. A tire manufacturer offers restaurant guides, eventually becoming so successful in doing so that it creates a
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focus on one solution—fight it. Some studio executives would acknowledge years later that the industry had lost time fighting piracy rather than creating new business models The single-minded fixation on negative connections had buried the possibility of capitalizing on positive ones. COMPLEMENTS VERSUS SUBSTITUTES—AND THE ROLE OF MANAGERIAL CHOICE
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that complements are either present in your business, or they’re not. Hardware and software. Printers and cartridges. Game consoles and games. Gasoline and cars. Razors and blades. Lamps and bulbs. Each without the other is useless. Compete on one of these products and you must have the other to provide value. In
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in 2006 that “ increasingly, sites which wall themselves off are becoming irrelevant. Not because the writing or analysis is necessarily flawed, but rather because their business model is. In today’s ecosystem of news, the greatest sin is to cut oneself off from the conversation. Both the Economist and the [Wall Street
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. How could two companies with similar products, similar user bases, and similar operating financials have such different business models? It’s natural to ask, Which model is “better”? But if you look at the business models in the context of connections, you’ll realize that’s the wrong question to ask. One difference between
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and the important interesting.” That’s a question whose answer fundamentally resides in better understanding the viewer rather than just the content. 3. Differentiating on Business Model: How “Indies” Do It The cost-quality trade-off affects other parts of the media, too. Movie executives have long grumbled about it. Reduce costs
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the time: Aggregate, don’t produce. Build, don’t buy. Erect paywalls. Create virtual currencies. Look at others making content similar to yours and with business models similar to yours. Copy what they’re doing. Imitate and borrow. And whatever you do, do it quickly. Follow these prescriptions and you’re likely
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awards). “Creative” is thought of as art. Agencies view themselves as arbiters of culture. Changing any of this means breaking habits, and risking both viable business models and prestige. Second, certain incentives have led agencies to favor the status quo. Traditionally, agencies were paid on commissions— 15 percent of the amount clients
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each—where 1 + 1 = 3. It’s one thing to keep track of the best marketing approaches, be they in social media, ad campaigns, or business models, and mimic them. It’s another to be ahead of the curve, to go one way when everyone’s going the other—and to shape
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,000 registrants, and subsequently left to form an online education enterprise—in their case, Coursera. These faculty-led spinouts, with their unnerving implications for the business model of universities, did not go unnoticed. East Coast institutions soon jumped in. In May 2012 Harvard president Drew Faust and MIT president Susan Hockfield announced
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, how can one get universities to move faster in their online efforts? With new platforms and ventures launched every few weeks, and new investors and business models introduced just as fast, the cost of not moving quickly is often said to be irrelevance. These three ideas are now so commonplace that they
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. “The Online Advertising Industry: Economics, Evolution, and Privacy,” Journal of Economic Perspectives, 23, no. 3 (2009): 37–60. Farhoomandr, Ali, and Elsha Yiu. “Tencent’s Business Model.” University of Hong Kong case no. HK 1003, July 5, 2013. Boston: Harvard Business Publishing. Forrester, Jay. “Systems Dynamics and the Lessons of 35 Years
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: Bantam Press, 1986. ———. What They Still Don’t Teach You at Harvard Business School. London: Bantam Press, 1990. McGrath, Rita. “The Problem with Groupon’s Business Model.” Harvard Business Review, July 13, 2011. Meyer, Philip. The Vanishing Newspaper: Saving Journalism in the Information Age. Columbia: University of Missouri Press, 2004. Milgrom, Paul
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this book draws primarily from the following sources: Tencent annual reports; Inside Tencent (Beijing: Plus Eight Star, 2009); Ali Farhoomand and Elsha Yiu, “Tencent’s Business Model,” University of Hong Kong case number HK 1003 (through Harvard Business Publishing); Feng Zhu and Aaron Smith, “Baidu, Alibaba, and Tencent: The Three Kingdoms of
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Tech Giant That Can Rival Facebook and Amazon,” Fast Company , April 17, 2014. for local telecom operators and paging centers Farhoomandr and Yiu, “Tencent’s Business Model.” to copy from the West Huffington, “Pony Ma”; “Tencent’s Ma Becomes China’s,” Bloomberg Business ; Elliott, “Tencent the Secretive”; “An Internet with Chinese Characteristics
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, Winter 2014; Andrei Hagiu and Simon Rothman, “Network Effects Aren’t Enough,” Harvard Business Review, April 2016; and Rita McGrath, “The Problem with Groupon’s Business Model,” Harvard Business Review , July 13, 2011. Schibsted Information about Schibsted in this section and the rest of the book draws primarily on the sources listed
The Future Is Faster Than You Think: How Converging Technologies Are Transforming Business, Industries, and Our Lives
by Peter H. Diamandis and Steven Kotler · 28 Jan 2020 · 501pp · 114,888 words
into a single network means the whole planet is just a few years away from becoming the largest innovation lab in history. Force #6: New Business Models Traditionally, innovation means the discovery of breakthrough technologies or the creation of new products or services. But this definition doesn’t capture some of the
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most potent innovation taking place today: the creation of new business models. A business model is the systems and processes a company uses to generate value. For most of history, these models were remarkably stable, dominated by a few
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of the game for creating and capturing economic value were once fixed in place for years, even decades, as companies tried to execute the same business model better than competitors did,” explains a 2015 article in the McKinsey Quarterly. In the twentieth century, this added up to around one major business revolution
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the “franchise models” pioneered by McDonald’s; in the 1960s we got “hypermarkets” like Walmart. But with the arrival of the internet in the 1990s, business model reinvention entered a period of radical growth. In less than two decades, we’ve seen network effects birth new platforms in record time, bitcoin and
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for acceleration. More importantly, the scale of disruption is increasing. What began as accelerating and converging technologies has become accelerating and converging markets, meaning the business model changes of the last few decades are nowhere near the changes that are coming. But this doesn’t mean we’re blind to the future
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technologies and products. But often this is not so. To unlock the next wave of growth, companies must embed these innovations in a disruptive new business model.” And for those of us on the outside of these disruptive models, our experience will be better, cheaper, faster. Better meaning new
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business models do what all business models do—solve problems for people in the real world better than anyone else. Cheaper is obvious. With demonetization running rampant, customers—and that means all
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of us—are expecting more for less. But the real shift is the final shift: faster. New business models are no longer forces for stability and security. To compete in today’s accelerated climate, these models are designed for speed and agility. Most importantly
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cake for free. Welcome to the emerging experience economy. By replacing premade ingredients with premade experiences, the experience economy is a new kind of disruptive business model satisfying a new kind of need. For most of history, we didn’t want prepackaged experiences because life itself was the experience. Just staying safe
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, and there is no driver, do you need insurance? The Car That Doesn’t Crash Insurance is a game of averages. The industry’s basic business model is assess risk and set premiums—or, covering this much risk will cost this much money. With a large enough number of customers and long
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: Marc de Jong, “Disrupting Beliefs: A New Approach to Business-Model Innovation,” McKinsey Quarterly, July 2015. See: https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/disrupting-beliefs-a-new-approach-to-business-model-innovation. “bait and hook”: Randal C. Picker, “The Razors-and-Blades Myth(s),” University of Chicago Law Review, February 6
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, 2011. See: https://lawreview.uchicago.edu/publication/razors-and-blades-myths. “franchise models”: Kerry Pipes, “History of Franchising: Franchising in the Modern Age
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Economy: Joseph Pine and James Gilmore, “Welcome to the Experience Economy,” Harvard Business Review, July-August 1998. Harvard’s Clayton Christensen: Mark Johnson, Reinvent Your Business Model (Harvard Business Press, 2018), back cover. Force #7: Longer Lives Ada Lovelace: Walter Isaacson, The Innovators (Simon & Schuster, 2014) pp. 7–33. the average caveperson
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, 36 AlphaGo Zero, 36, 37 Alzheimer’s disease, 82, 178 Amarasiriwardena, Gihan, 108–9 Amazon, 4, 21, 47, 100, 107, 108, 114, 119, 127 disruptive business model of, 98–99 Echo of, 35, 101, 132 Project Kuiper and, 40 Amazon Go, 105, 196, 229 ANA Avatar XPRIZE, 26 anandamide, 247 Andreesen, Marc
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DxtER, 157 dynamic risk, 187–89 Eagleman, David, 134 Easter Island (Rapa Nui), 174 Echo, 35, 101, 132 e-commerce revolution, 98–100 economy: new business models for, 83–87, 111–13 paradigm shifts in, 97–98 technological unemployment and, 227–30 ecosystems, ecosystem services, collapse of, 223–24 Edison, Thomas, 61
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and, 82–83, 244 demonetization and, 77–79 internet and, 83 longevity and, 87–91 migration as accelerant of, 238–40 neurobiology and, 81 new business models for, 83–87 saved time and, 71 Insilico Medicine, 166, 167 insurance, peer-to-peer, 183, 185–87 insurance industry, 181–82 autonomous cars and
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–26 Netherlands, 232 networks, 39–41, 82–83 5G, 39–40, 119, 149 history of, 37–39 “Internet of Things,” 42–43, 104–5 new business models and, 84–87 and nurturing of genius, 80–81 ubiquity of, 39 user-friendly interfaces for, 38 Neuralink, 81, 256, 258 neural networks, 33, 34
Fabricated: The New World of 3D Printing
by Hod Lipson and Melba Kurman · 20 Nov 2012 · 307pp · 92,165 words
. To make an object of equal complexity, a 3D printer requires less operator skill than does an injection molding machine. Unskilled manufacturing opens up new business models and could offer new modes of production for people in remote environments or extreme circumstances. Principle seven: Compact, portable manufacturing. Per volume of production space
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to provide economies of scale is both its biggest weakness, but also its biggest strength. Harnessing economies of scale is critical to a company whose business model is based on selling large volumes of a commodity product that earns razor-thin margins. However, if a company’s
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business model is based on selling small numbers of unique, constantly changing or custom-made high margin products, 3D printed production (like the platypus) represents an evolutionary
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of getting this technology adopted.” A killer app—for example email, Facebook, and Angry Birds—is a product or tool that creates new markets, new business models and lures customers to a new technology. These particular killer apps attracted millions of new customers to the personal computer, the Internet, and the iPad
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printed goods and services is an equally daunting task. It’s difficult—no, impossible—to offer a few crisp words that sum up potential new business models that offer good, fast, and cheap products or services to their customers. Could this be the factory of the future, a small quiet room full
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, because of the limitations of mass and artisan production, have been impractical or impossible to offer at a profit. In other words, opportunity lies in business models where profits are not reliant on economies of scale. Imagine, for example, if my car mechanic (a great skeptic of the existence of car repair
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would install a 3D printer that could create precise shapes in high-grade, durable tire rubber. Out of the gate, let’s suppose his first business model would be to make and sell 3D printed tires identical to the brand name tires sitting in his inventory. To anyone familiar with 3D printing
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, alone, can’t sustain a business. Finally, after a near brush with bankruptcy, my car mechanic would sit down and re-think things. His revised business model would no longer rely on the efficiencies of mass production. Instead, his new 3D printed tire business would offer custom-designed tires made for customers
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were willing to pay top dollar for original, branded tires that offered optimal product performance, then selling 3D printed tires could be a pretty good business model. My mechanic would have to edit the old sign taped near his cash register to say “You can have it done good, fast, or cheap
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the Internet made travel agents obsolete, but in return, opened up a new market for travel-related services. Similarly, 3D printing technologies will enable new business models while eradicating others. Some jobs will disappear while entirely new professions will emerge. Fortunately, the student seemed satisfied with my answer, but his question made
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biggest contribution of 3D printing technologies to the economy will be to reduce the risk and friction associated with trying out new business models. Like ants with factories One future business model enabled by 3D printing and new design technologies will be cloud manufacturing. Cloud manufacturing, an alternative to mass production, will consist of
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autonomous, yet connected. Manufacturers will form and re-form in temporary collectives as needed around a particular project. Economies of scale will no longer dictate business models since per part, it will cost the same to make one or ten thousand. Each individual company will be versatile, able to make a wide
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Internet’s biggest e-commerce platform with automated feeds to outside product vendors, inventories, and other software companies. While platform strategy may steer Shapeways’s business model, its magic lies in the artistry of its designers and the broad range of materials that people can print things in. If you buy your
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of their work on the site. That plus online user ratings are a pretty effective system.” A future economy of printable products New technologies and business models sweep across the Internet as quickly as a forest fire sweeps over a rain-starved national park. In contrast, innovation in manufacturing is is a
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’t quit your day job Innovation friction is not just a matter of concern for large companies; it is especially pertinent to individual inventors. New business models in any industry are activated by the democratizing of tools of production. Personal manufacturing tools liberate entrepreneurs from intensive capital resources and skill. Future entrepreneurs
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will be able to experiment with more new products and more new business models than ever before with almost no upfront financial investment. Mark Kendrick designs and sells unique model train parts in stainless steel. This is a 3D
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new businesses will be able to prove their idea to themselves and to potential investors, or maybe even postpone the need for investment altogether. This business model, often referred to as “scale up from one,” democratizes manufacturing and retail by lowering the barriers to entry. Launching a new product today requires its
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become the proud owner of a brand new set of perfect-fit custom handlebar grips. FabApps will offer expert designers of the future a new business model for integrating their design expertise into a growing economy of distributed manufacturing. Like iPhone apps, FabApps will generate a new economy. Small custom printing apps
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, when everyone had gone home. Wherever there is a deep human need, there is money to be made. It’s a short step to a business model. But leading companies in the 3D printing space have, so far, deliberately stayed out of the sex market. It’s going to be interesting to
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as did microloans, transforming low-income communities and empowering disenfranchised sectors of the population. Related social trends will enable microfactories to grow. Open source collaborative business models will allow microfactories to access necessary expertise and tools. Online crowdsourcing will allow microfactories to explore new ideas. Crowd financing will allow microfactories to raise
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production of low margin commodity products will continue to migrate to nations where labor costs less. 3D printing technologies will enable companies to build new business models, to carve out a profitable niche in the economy of the future. To survive, companies must climb up the value chain by making and selling
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. At ABC Imaging when John showed me buckets full of commercial-grade printing powder, he likened the cost of 3D printing plastic to the infamous “razor and blades” business model. “It’s like Gillette,” he said. “They give away the razor but you can only get the cartridges that fit from Gillette.” The fact that
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special print head that’s dishwasher safe. Adrian pointed out that suing one’s customers is a crude and ineffective method of protecting one’s business model. “Any development or improvement of RepRap design, software, or electronics arises out of its users’ own initiatives. There is no central institution giving directions: users
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out there, the Makers, inventors, artists, and entrepreneurs. Thanks to you, the world benefits from a steady stream of new printing technologies, novel materials, innovative business models, and wonderful new designs and applications. Keep up the great work. Preface One of the great things about 3D printing is that the field moves
Democratizing innovation
by Eric von Hippel · 1 Apr 2005 · 220pp · 73,451 words
. Open, distributed innovation is “attacking” a major structure of the social division of labor. Many firms and industries must make fundamental changes to long-held business models in order to adapt. Further, governmental policy and legislation sometimes preferentially supports innovation by manufacturers. Considerations of social welfare suggest that this must change. The
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that had been designed using this approach. Manufacturers that adopt the toolkit approach to supporting and channeling user innovation typically face major changes in their business models, and important changes in industry structure may also follow. For example, as a result of the introduction of toolkits to the field of semiconductor manufacture
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to provide custom production or “foundry” services to users, differentiating themselves by producing users’ designs faster, better, and/or cheaper than competitors. This type of business model is already advanced in many fields. Custom machine shops specialize in manufacturing mechanical parts to order; electronic assembly shops produce custom electronic products, chemical manufacturers
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and supported by user communities and are available as open source software. The eventual effect of open source software alternatives on the viability of the business models of commercial vendors such as StataCorp and its competitors remains to be seen. A very similar pattern exists in the online gaming industry. Vendors of
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cover entire truck trailers, buses, and other vehicles with advertising or decorative graphics.) The LU team’s solutions involved technical innovations plus related channel and business model changes to help diffuse the innovation rapidly. • A new approach to protecting fragile items in shipping cartons that replaces packaging materials such as foamed plastic
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the World Wide Web as a lead user working at CERN—a user of that software. The World Wide Web was certainly disruptive to the business models of many firms, but this was not Berners-Lee’s concern. Lead users typically have no reason to lead, mislead, or even contact manufacturers that
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valuable implement toolkits for innovation even if the portion of the target market that can directly use them is relatively small. Toolkits can affect existing business models in a field in ways that may or may not be to manufacturers’ competitive advantage in the longer run. For example, consider that many manufacturers
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just as accurate as that collected by surveys of representative samples of respondents. This emerging new approach to data aggregation will clearly affect the established business models of firms specializing in information collection, with websites like www.ciao.co.uk illustrating new possibilities. If the quality of information available to transaction participants
Vassal State
by Angus Hanton · 25 Mar 2024 · 277pp · 81,718 words
of creators add more than 14,000 new games each year and generate a handsome royalty for the company.16 It is almost the perfect business model: with no physical delivery needed, no development costs and worldwide reach, the business produces a torrent of cash. So, like many other US companies in
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considerations or short-term Wall Street reactions… We choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.10 None of this means that US businesses are not ruthless in their drive for efficiency. Amazon’s UK warehouses use mezzanine levels to fill
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into one of the most important tech companies in the world. With technology in more than 200 billion devices, the firm has successfully pioneered a business model in which it licenses cutting-edge computer architecture to developers across the globe. The UK company has been so successful for so long that its
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an unknown businessman who would, in two decades, grow his company, Salesforce, into one of the biggest in America. He did it by smashing the business model of firms like Siebel. At that firm’s annual conference in Cannes, Benioff hired every cab in the city, and placed salesmen in them who
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… and track individual assets to ensure they are optimally positioned to reduce cycle time.’7 Even jet engine makers offer an ‘Engines-as-a-Service’ business model, nicknamed ‘power-by-the-hour’.8 The manufacturer leases the engine to the airline, providing services for maintenance, repair and overhaul, in exchange for a
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powder’, as the industry calls it, taking a term from the lexicon of pirates.32 Blackstone and the pack did not just stumble upon their business model: they built on the leveraged buyouts in 1980s New York, led by Jerome Kohlberg, Henry Kravis and George Roberts (now KKR). These were takeovers where
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be easy for these and other companies to click into the NHS network because it has already been reshaped to fit more neatly with American business models. In his 2018 book Too Many Pills, the British doctor James Le Fanu diagnosed Britain with a crisis of polypharmacy in which the proportion of
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’s worldwide reach, including its 8 million UK customers. Another north-western US town, Issaquah in Washington State, has boomed on the back of a business model that is transforming how people shop. Costco relocated there in 1995, and since then the population has quadrupled. In the UK, Costco has 29 stores
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cost of recharging a Tesla car on a motorway is much more per kilowatt hour than charging it at home, in another version of the ‘razor and blades’ business model. With more than 1,000 superchargers spread across the UK and installations accelerating, Tesla’s recurring income is speeding along.40 Lock-ins like this
Tech Titans of China: How China's Tech Sector Is Challenging the World by Innovating Faster, Working Harder, and Going Global
by Rebecca Fannin · 2 Sep 2019 · 269pp · 70,543 words
your business, then get this book now.” —Jon Medved, CEO, OurCrowd “Tech Titans of China is a must read to understand the entrepreneurial dynamics and business model innovations of China’s leading tech companies and how they will transform the world as they go global.” —Poh Kam WONG, Professor, NUS Business School
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, coinvesting with Sand Hill Road venture capital firms, and spanning out to Southeast Asia and Israel to counter American domination •fast-tracking and popularizing innovative business models in China that the West is copying: virtual gifts, social commerce, AI-powered news and video apps, and one-stop superapps •building giant consumer and
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the China-made phones are effectively banned in the United States due to security concerns and face blocks to Android updates. •Apple has copied the business model of Chinese smartphone maker Xiaomi by loading up iPhones with subscription content. •Personal drones to fly passengers short distances as if the Jetsons weren’t
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mere copycats of Google, Facebook, YouTube, and Amazon—as they were when my Silicon Dragon book first was published in 2008. Now, made-in-China business models built for a mobile-first generation are advanced and widely used. There are multifunctional superapps, mobile wallets, mobile shopping in groups, mobile videos and streaming
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on the most progressive ideas in the digital world today and are challenging the United States in several sectors, with China-for-China innovations and business models. Examples include: •Artificial intelligence: Baidu is emerging as a leader in AI with driver-less-car technology and AI voice-activated smart-home devices. The
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’s trustworthiness through technological surveillance and encourages compliance by giving ratings that can determine access to loans, jobs, schools, and travel. •Sharing economy: China-invented business models for shared bikes, battery chargers, umbrellas, basketballs, and takeout kitchens have been popularized by dozens of startups. •Livestreaming: Video streaming sites from Baidu’s Netflix
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entrepreneurial markets. In the scrappy, cutthroat Chinese marketplace, these digital innovators seek to own the next new thing and are creating awesome new features and business models that have captured the Western world’s attention. Their next hurdle is breaking through globally. Alibaba, with a name that conjures up the command “Open
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in Mandarin and localized features such as community chat to handle queries. Baidu also made it in China by initially copying Google’s paid search business model and, later, keyword-based marketing services and pay-for-performance online advertising. As word was leaking out in midsummer 2018 about a possible reentry by
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for today’s always-on young generation, leverage the latest technologies in AI and data analytics, and set the pace in innovation and scale. Their business models and features are often ahead of the West and sometimes are copied. Toutiao uses machine learning to distribute personalized streams of aggregated content to online
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all hours every day of the week—to make it happen. Xiaomi Advantage: Hardware and Software Xiaomi’s business model is another aspect of its creativity—it’s described by founder Jun as a “triathlon business model” comprised of three synergistic pillars of growth. Handset sales account for the bulk, or about 70 percent
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games that are monetized with advertising, subscriptions, and virtual gifts. Take a lesson, Apple! From Rice Cookers to Electric Scooters Another twist in the Xiaomi business model comes from some 100 partner companies that it incubates or invests in. These partners are a pillar in Xiaomi’s growth. They make internet-connected
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2018) and smart-home product maker Viomi—went public in New York in 2018. 90 Minutes to Push Invest Button Xiaomi’s multipronged and interconnected business model is distinct and could be considered leading edge. “It’s very difficult for any investor to fully understand Xiaomi’s model, which is uniquely Xiaomi
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. Livestreaming has become a $5 billion business, and nearly half of China’s internet users have watched a livestream. YY helped to invent the livestreaming business model of making money by taking a chunk of revenue from promotional agencies and from fans virtual gifts to performers. BYTEDANCE: The New “B” In today
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have caught on among teens and Millennials with little translation required. Both the news and video apps have become mainstream successes internationally, showing that Chinese business models in the consumer mobile internet can be relevant outside China. The young creator of these wildly popular apps is delivering on his mission to, as
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and speed,” Luckin’s chief marketing officer Yang Fei said at a Beijing press conference.5 “There’s no point in talking about profit.” The business model for Luckin is remarkably similar to Uber’s on-demand service, except it’s for coffee, not car rides. The connection is that founder Jenny
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go it alone. •Hire a local team experienced in China business and tech. •Give the local team autonomy to make decisions to build their own business model and operate independently of US headquarters. •Customize services and features for Chinese customers. •Strategize and then move on acquisitions that can jump-start the business
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through three types of technology phases: internet startups from 2003 to 2010, mobile-centric startups for the next few years, and, today, advanced technologies and business models in artificial intelligence, biotech, self-driving, robotics, drones, livestreaming, mobile payments, social networking, and social commerce that impact broad sweeps of the economy such as
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$2.2 billion into Chinese bike-sharing startup Ofo, which has crashed after so much hype, a victim of overexpansion, competition, and a money-losing business model. Another China deal that cost its investors dearly was failed blogging platform Bokee, funded with $10 million from SoftBank, Bessemer Venture Partners, and Granite Global
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identifying, researching, and funding passionate founders who dream big, innovate huge, and compete to win with the right team, the right sector, and the right business model. It’s a tall order. Venture capital is hard enough in Silicon Valley, but the usual work of researching promising sectors, finding breakaway startups, getting
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Mainland China, and new tech-friendly reforms to list on the Hong Kong Stock Exchange, plus an institutional investor base that’s familiar with Chinese business models. China’s hubs are fed by engineering and managerial talent; clusters of coworking spaces and incubators such as hardware accelerator HAX; loads of networking events
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in Southeast Asia, which is feeding startups with a large and fast-growing population of 665 million and a big internet base of 260 million. Business models and innovations transfer easily from China to this region and catch on quickly thanks a cultural similarity and an influx of capital from China and
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always a company in the garage that is going to come out and do something different.” James Mi —Founding partner, Lightspeed China Partners Pinduoduo’s business model is built on driving bulk sales with low-ish prices. Factories and merchants use the app to get rid of low-value products that are
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upstart Pinduoduo has incurred net losses since its start, and that’s sparked eagle-eyed investors to think twice.3 Pinduoduo has a fundamentally flawed business model that “feeds off the scraps of China’s retail commerce market, sells the cheapest goods at bargain-basement prices to the poorest people in China
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businesses, mostly large companies, sell products to China on Alibaba. Alibaba vs. Amazon Alibaba today is sometimes compared with e-commerce force Amazon although their business models and orbits differ—though both founders have ironically become newspaper owners. Jack Ma paid $266 million to buy Hong Kong’s leading English-language newspaper
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array of online shopping and related services, but from different bases, time lines, and strengths. The biggest difference between Amazon and Alibaba is the underlying business model. Amazon is an online retailer while Alibaba is a digital platform connecting customers with sellers directly and owns no inventory or warehouses. Alibaba started in
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, 8 e-commerce landscape, 185–195 economic development, 14 entrepreneurial culture, 11–12 global tech leadership, 11–12 high-tech giants, 3–4 innovations and business models, 18–20 internet censorship, 15 “Internet Plus” plan, 12 investment in Hollywood, 52–55 investment in US tech companies, 21 “Made in China 2025,” 12
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Lo, Vincent, 152 Long Hill Capital, 148 Lonsdale, Jeff, 138 Luan, Pan, 67 Luckin Coffee, 99–100 business model, 103 Lu Qi, 33 Lyft, 21, 51, 178, 183 M Macquarie Group, 115 Made-in-China business models, 10 Made in China 2025 initiative, 172, 200, 208, 212, 224 Magic Leap, 21 Ma Huateng (Pony
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Workingdom, 110 Wu Xiaoguang, 199 X Xiadong Jiang, 172 Xia Huaxia, 92 Xiaodong Jiang, 142 Xiaomi, 20–21, 68–70, 75, 138, 141, 153, 168 business model, 76–79 core strength of, 73 customers, 72 growth, 72–73 international market, 79–80 Mi Home store locations, 73–74 mobile phone features, 70
Big Data: A Revolution That Will Transform How We Live, Work, and Think
by Viktor Mayer-Schonberger and Kenneth Cukier · 5 Mar 2013 · 304pp · 82,395 words
and intellectual property. That now is expanding to data, which is becoming a significant corporate asset, a vital economic input, and the foundation of new business models. It is the oil of the information economy. Though data is rarely recorded on corporate balance sheets, this is probably just a question of time
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. Likewise, publishers for years have experimented with electronic versions of books. They too saw the core value of books as content, not as data—their business model is based on this. Thus they never used or permitted others to use the data inherent in a book’s text. They never saw the
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patient, knowing that unveiling too many new purposes for its users’ data too soon could freak them out. Besides, the company is still adjusting its business model (and privacy policy) for the amount and type of data collection it wants to do. Hence much more of the criticism it has faced centers
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consequences. It affects how businesses value the data they hold and who they let access it. It enables, and may force, companies to change their business models. It alters how organizations think about data and how they use it. Information has always been essential for market transactions. Data enables price discovery, for
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,” in the words of Tim O’Reilly, a technology publisher and savant of Silicon Valley, since it is a building block for new goods and business models. The crux of data’s worth is its seemingly unlimited potential for reuse: its option value. Collecting the information is crucial but not enough, since
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chain. By serving many banks and merchants, they can see more transactions over their networks and use them to make inferences about consumer behavior. Their business model shifts from simply process- ing payments to collecting data. The question then is what they do with it. MasterCard could license the data to third
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for free (though heavily visited websites have to pay). Amazon, too, has the mindset, the expertise, and the data. In fact, the company approached its business model in that order, which is the inverse of the norm. It initially only had the idea for its celebrated recommendation system. Its stock market prospectus
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that herald the next big book. But Amazon seems to leave the field of data to lie fallow. Harnessed shrewdly, big data can transform companies’ business models and the ways that long-standing partners interact. In one stunning case, a large European carmaker reshaped its commercial relationship with a parts supplier by
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Quantcast gets to see the data, which enables it to improve its ad targeting. These new intermediaries have identified lucrative niche positions without threatening the business models of the data holders from which they get their data. For the moment, Internet advertising is one of these niches, since that’s where the
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’ll try to supply the data himself, since the value has migrated from the expertise to the idea and is now moving to the data. Business models are being upended as the value shifts to those who control the data. The European carmaker that struck the intellectual property deal with its supplier
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tech firm was paid for its work, but the carmaker kept the bulk of the profits. Sniffing opportunity, however, the tech company has tweaked its business model to share some of the risk and reward with clients. It has experimented with working for a lower fee in return for sharing some of
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access to multiple data sources. Companies are also experimenting with different organizational forms in the business of big data. Inrix didn’t stumble upon its business model as many startups do—its role as an intermediary was established by design. Microsoft, which owned the essential patents to the technology, figured that a
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-Lee, Tim, [>] Bezos, Jeff, [>], [>], [>], [>] big data. See also data; information; open data and antitrust regulation, [>]–[>] and artificial intelligence, [>]–[>] in astronomy, [>] as based on theory, [>]–[>] and business models, [>], [>]–[>], [>], [>]–[>] and calculation of inflation, [>]–[>] and causality, [>], [>], [>], [>], [>], [>]–[>], [>] changes human perceptions, [>] and climate change, [>] collection and management of, [>]–[>] in consumer loans, [>]–[>] correlation analysis and, [>]–[>] and creation of
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, [>]–[>] reviews at Amazon, [>]–[>], [>] Boston Consulting Group, [>] Bowman, Douglas, [>]–[>] boyd, danah, [>] Brahe, Tycho, [>] Brill, Eric, [>], [>] Brin, Sergey, [>] British Petroleum, [>] Brynjolfsson, Erik, [>], [>] business, online. See e-commerce business models: big data and, [>], [>]–[>], [>], [>]–[>] cancer: cell phones and, [>]–[>] Captcha & ReCaptcha: von Ahn invents, [>]–[>] Cate, Fred, [>] categorization: vs. tagging, [>]–[>] causality: big data and, [>], [>], [>], [>], [>], [>], [>]–[>], [>] vs. correlation, [>], [>], [>], [>], [>], [>], [>]–[>], [>]–[>], [>], [>], [>], [>]–[>] intuitive preference