Changing your business model can lead to success. In fact, many recognizable companies have changed their models over the years, leading them to become far more successful. Being able to remain flexible aided them in that success.
There are different factors as to why startups fail, which makes having good startup models and the flexibility to use them even more important than ever before. Without a solid foundation in which to base your startup company, finding success will be even harder.
It’s a good idea to take a look at some previously tried-and-tested models that can help give you an extra edge when diving into the world of a startup company.
We’ll go through 4 such models that may help you in further detail below.
The Marketplace Model
This model lets you bring together both the supply and demand into one place. It has great advantages in that there is little to no overhead and, depending on your product, there is no need to keep inventory.
Essentially you are the middleman between the buyers and the sellers or product. You help the buyers find what they want to purchase, whether it is a physical good or a particular kind of service. During that transaction, you’ll take a small piece of the profit for your trouble.
It’s possible to run this kind of model in an office or, as is the growing trend this year, you can run everything virtually.
The Freemium Model
With the use of this model, you offer your customers a more basic rendition of your service for free while offering them more advanced services for a fee. This model works well compared to other startup models because you give your customers a taste of what the service is like without giving away everything for free. If they want to have the full package, they’ll need to buy your service properly.
This type of model tends to be more successful than trial period models and allows for your customers to feel more comfortable with your company as a whole because you give them something for free.
The Virtual Goods Model
This model brings you revenue through services or goods that are only available online. Often this model is used with in-game purchases that a customer can use to give them an advantage in a game. Because this type of purchase is useful to their game, it makes this virtual item more valuable.
You can also use this kind of model to send virtual gifts to loved ones, such as a sentimental card or a flower. With so many people spending more time on the Internet and on social media, being able to send affectionate gifts to friends and family feels more valuable and worth-it than it may have in the past.
The Subscription Model
With this model, you deliver a service or product to the customer in regularly timed intervals. Your customers will pay a flat rate and can be assured that your product will arrive at them in an expected time frame.
This model allows you to predict your revenue due to the recurring sales which can be a great asset to a newly begun company. As you continue to deliver your service on time, you will grow your company’s presence in the market which will help it to continue to grow even more.
Using Established Startup Models Jumpstarts Your Business
All of these models have been implemented by previous startup companies and will continue to provide a good jump-off point for future companies.
Instead of simply attempting to break into the startup world by luck, make use of these established models to ensure that your company will have the best start possible. Giving your own business this extra backbone to rely on can only make your startup stronger.
Have you tried any of these startup models before? Let us know in a comment below.
Or you can contact us with any questions you may have.
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Tommy Givens says
I think the subscription model is still one of the hardest ones to continue to make money with. As a company you have to provide so much value in order to keep the subscribers coming and the money flowing.
Timothy Edwards says
I think video games use the freemium model quite a bit. You get to play, for the most part, a majority of the game for free. Then you have to unlock areas, or levels or equipment and that is what is going to cost you money in the end. Great idea!
Raphael McGinnis says
Virtual goods works great in the app store. Always leave a few features out so that people have to pay to use them. that has worked for many years!
Edith Tucker says
I have seriously been considering the marketplace model for my new adventures. Thanks for the inspiration on that.
Corinne Haven says
Great tips and write up on each of the styles that we see in businesses today!
George Jones says
You bet! This article actually inspired me to move my business into the next phase that includes one of these.
Vincent Mills says
Is the subscription model one that makes sense today? Or could you use this with the freemium model to keep things real.
Audrey Woody says
Yes, you have little over head and you can lock customers in for the long term if you price yourself just right.
Virginia Watts says
The virtual model seems to be one that is quite popular these days. When shared with the freemium model, there is a lot of area you can cover for the consumer with hopes they are going to shell out some cash.
Shivam Sahu says
Indeed a great article about startup mistakes. You really had shared the major mistakes done in the startups these days and It will be great If you could avoid doing these mistakes.
Most of the young people are now getting into startups but I have seen a lot of them not maintaining the quality of their team members. For a successful startup, It is always important to have a strong and dedicated team and should never avoid the any regular mistakes done by any of the team member.
I am glad that you have covered this topic in a detailed manner and Thanks for sharing it with us.
Jeffrey Meadows says
Great insight. I think it might be too easy to do a “startup” these days, but the more the merrier.
Bessie Bedard says
I love a good subscription model. In fact, I was really good at one back in the day when DVDs at wholesale prices was the cat’s ass. I miss those days. Now, if I could just find another product like that to fit into a sub model, that would be awesome!
Terry Morris says
The Freemium Model seems to work great for things like plugins or add-ons and even mobile apps. I am sure those mobile app developers can make a killing with in app purchases and things like that.
Tyler Greenwalt says
At first I was thinking about the subscription model because that seems to be the most lucrative. However, the marketplace model really seems like something that a person can do without much investment.