Business models of the 21st Century

Can you see the obvious difference in this famous Mona Lisa painting?

That is how the business models have changed over the period of time….. for the good I mean.

Pretty much all the businesses in the 80’s and 90’s demanded it's target audience to come all the way to their store to make a purchase. And people did it, because that was the only choice

That is not the case now as we all know. I feel that a perfect name for this 21st century business model should be - CONVENIENCE 

You can make an observation around you yourself. Things that are not convenient to you, there is a very less probability that you might buy from them.

Well, talking about convenience…. Do you like free stuff?

😂😂😂 what a stupid question

Who does not like free stuff, and let me tell you 80-90 percent of the apps you are using are free. But then too they earn revenue from you using that product

Apart from Netflix(It's not free😖)

This is popularly known as the freemium business model. This particular model says that businesses offer you their services for free at the first and later upsell their other or the same services with better convenience. Which can also be called as subscriptions

There are 2000 other ways where they earn money in spite of their product being available for free. 

There are many examples where we can start a never ending conversation on

Like Notion, It's a productivity tool where you can record your to-do list, your work & personal journal and many more. It offers its initial service as free and has as upgrade option where you have additional benefits and leverage.

There are many other tools that follow the same business model.

So we can say the freemium model can be the biggest sales magnet

Now the question is, how does google, Facebook and other big giants make money from us, even though we do not pay a single penny to them

And you might think how dumb is he asking this question. It's obvious that they earn from running ads.

Yes it is true. But what if I say we do pay to google and Facebook etc.

Not in terms of money but in terms of our data. They get our data hence they are able to run ads

As the book Swipe to Unlock puts it really well as a silicon valley proverb “If you do not pay for the product, you are the product”

Now let's talk about the subscription economy

First thing that runs to my mind when I here 'subscribe' is Youtube😂😂

Anyways!!

Just imagine as I say, you can buy Netflix for 2999/- for once and use it for the rest of your life. Imagine the same with Amazon prime or any other OTT platform, Adobe photoshop or Microsoft word/ excel.

What you are doing here is called pay per product. Buying the product once in for all and keeping it for yourself forever. Sounds profitable, but it is the biggest loss for the seller and buyer both. Why? Read on.

By selling the product for once, just left millions of dollars on the table which businesses could not earn. Buyer buys these products and they use whenever it is required but not all the time, this results in the storage space being filled unnecessarily.

Isn't ​it a loss for both of them? Hence the subscription business model

When you subscribe to any service or product you pay monthly, quarterly or yearly and use it whenever you need. This business model has transformed many businesses and satisfied the customers more than ever.

Added to this, a data driven approach paves the path to personalize their offerings for better customer experience. This is invaluable to aww the customer.

According to Zuora's subscription economy index:

The Subscription Economy has grown nearly 6x (more than 435%) over the last 9 years, and subscription businesses in the Subscription Economy IndexTM report have consistently grown five to eight times faster than traditional businesses.

So will the freemium and subscription business models stay forever?

Comment your thoughts and let's discuss it.