Thoughts on Business Modeling

After our lecture on Business Models, here are a few thoughts that I have:

Business Modeling is basically constructing a “pattern” as part of your business strategy. Some models provide similar patterns or building blocks and some are improvements on each other. A good reason, I believe, in using a business model is that studies have been made regarding the performance of existing models so you can somewhat mitigate risks if you start with a rather successful model and build on that. This will also help an aspiring entrepreneur to quickly establish a strategy with the use of a framework.

Some of the examples of business models we discussed in class include:

  • Unbundling
  • The Long Tail
  • Multi-Sided Platforms
  • Freemium
  • Open Business Model

Instead of describing all these models, I wanted to identify some companies out there and classify them under one of the models above.

Spotify is a relative newcomer in the US market for music streaming services. This Swedish company was launched in 2008 and quickly became very popular in Europe before being offered here in the US. Their revenue model includes a non-paying group of subscribers supported by advertising revenue, a paying group who can access the content ad-free and with no limits, and a buy and download option for music.

Based on my own experience in using their services, Spotify has a vast collection of music available, partly because unlike other services such as Pandora, Spotify directly negotiates with record labels to be able to use their content. They’ve also been tweaking their model recently as I remember that only paying subscribers used to have mobile device access to Spotify, while now it’s part of the free tier.

As far as classifying them under a model, they use several types of the Freemium model. These include a time-based free trial,  characteristic based model and a straight forward revenue stream.

CrunchyRoll is another media streaming service founded by a group of UC Berkeley students. CrunchyRoll provides content on East Asian media including anime, manga, drama, music, electronic entertainment, and auto racing content.1

CrunchyRoll is another example of the usage of the different business model types. They use a time-based trial, and a characteristic-based model which is their Premium membership. Aside from these Freemium model types, the type of video media CrunchyRoll provides also makes them an example of the Long-Tail model which espouses the selling of a larger number niche products in a limited market.

My last example is the very popular Craigslist. This is an example of a True Freemium model where users can post ads with no fees or even advertisements. Also, Craigslist is an example of a Multi-Sided Platform model, bringing together buyers and sellers as well as job seekers and employers.


1
http://en.wikipedia.org/wiki/Crunchyroll

Business Modeling

Here you will see an exercise on Business Modeling particularly using the Business Model Canvas initially proposed by Alexander Osterwalder.

The first model is a bit different from most models in a sense that the subject is the department I currently work for at Georgia Tech, the Office of Institutional Research and Planning. We do not have a traditional model where there are direct revenue streams and profit margins since most revenue comes from tuition, state appropriation, research grants and donations. Most of the items in the model only relates to our particular department and our mandate of “delivering timely and accurate information and assisting executive decisions” and not to the whole Georgia Institute of Technology as a whole.


Model 1: Click image to enlarge

The second model, is of a mock infomediary business called SchoolNet.info. This make-believe business is an online repository of data and information regarding all the school districts in the US. The aim mainly is to:

  • Help parents looking for good school districts
  • Provide measures where schools can benchmark themselves
  • Provide historical data where public officials can see the improvement in their areas

This is a tiered, subscription-based service that also accepts advertising contracts.

Model 2: Click image to enlarge

Router Basics

So, as part of the MIST 7500 course I am currently taking, we listened to a very interesting podcast talking about routers and how this special computing device allowed for the Internet to be what it is today.

Basically what I took from the podcast:

  • Routers are special devices that allow different LANs to communicate with each other.
  • Routers operate in the network layer of the OSI model.
  • Routers work by forwarding blocks of data called packets in the most efficient way possible. They primary use what is called a “routing table” which document the ways of getting to a particular network destination.
  • “Hops” are the number of times a data packet goes through different routers on its way to its destination.
  • Routers provide NAT or Network Address Translation where it modifies the IP address information in a packet. This allows connected devices with non-unique IP addresses to communicate to the outside. Ports are usually assigned to keep track.
  • DDOS/DOS or Distributed Denial of Service/Denial of Service are often malicious attacks where the attackers tries to disable a device like a router, by overwhelming it with a number directed data packets, more than the device can handle.
  • Since routers direct network traffic, most of them have firewall components to secure the network behind the router.

 

Rising from the dead…

Like a phoenix rising from its own ashes, or maybe more like a corpse walking the streets again as a zombie, this blog is given new life.

A lot has happened since my last post here about 3 years ago and one of these is I’ve finally decided to start working on my graduate degree and I got in to the Master of Internet Technology program at the University of Georgia. As part of one of our courses, we have to set-up and maintain a blog. I thought, rather than making a new one, I’ll just re-purpose this one!

So it begins. This blog will be about almost the same things, technology, gadgets, life, as well as my experiences (a.k.a. ‘assignments’) working my way through the program. Hopefully, I can sustain blogging even after I complete the courses.