The Most Powerful Business Model

by Sam on April 28, 2009

Years back a professor drew me a diagram of what he called the most powerful model in all of business:

most-powerful-business-model

Tonight while I was thinking about business models, the web, some friends ideas and workstreamer I pretty much decided he was dead right. Anytime you can add structure to the unstructured you’ve got yourself a sweet opportunity.

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  • This model looks like Link Wheel model. Search for Link Wheel if you don't know what I am talking about =)
  • Could you explain? It seems like the business model should be the opposite. Once you remove single points of failure and commodify, markets become more fluid.
  • Hey Joseph - Maybe I am not understanding because that's essentially what is modeled above, no? You're removing the number of possible points of failure (though that doesn't mean the technology allowing the streamlining won't itself fail)
  • foo
    By the way, "leverage" is a noun. "Lever" is a verb.
  • I'm not sure what instance of 'leverage' you're referring to, but if
    it's the title of the blog, I do believe you're wrong:
    http://www.thefreedictionary.com/leverage
  • If you expand just a little more on this I think it would be greatly valuable. I think I follow you, but can you give an example of what kinds of things demand structure which equates into market share (or better yet, revenue)?
  • Hey Matthew! Sure - what is drawn here is a simplistic distribution model:

    Examples: cloud technology, file sharing sites, Ebay as the platform
    for buyers and sellers, Facebook, Google consolidating ad buyers and
    sellers, Stocktwits aggregating fragmented conversations around stocks
    and creating a single channel....almost every successful web startup
    today has some element of this at play
  • ppearlman
    bingo
  • Great, thanks. I had a feeling that's what you were saying, and it's exciting because there are so many opportunities for this. I was inspired in this direction by a fantastic (and practical) presentation by Tom Coates in 2006: http://www.plasticbag.org/archives/2006/02/my_f...
  • Awesome...I hadn't see that deck but thanks for the share! I'll read
    through that tonight; looks great
  • Looks like the link to the .mp3 file is dead (or just really slow), but if you can find the audio, it's well worth it (here's the original, official FOWA '06 page): http://www.carsonworkshops.com/summit/2006/lond...
  • Awesome! Thanks again!
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