The researchers looked for recurring features in the models and found six: personalization, a closed-loop process, asset sharing, usage-based pricing, a collaborative ecosystem, and an agile and adaptive organization. No model displayed all of them but having a higher number of features usually correlated with a greater chance of success at transformation. (The taxi service Uber can claim five of the six.)

The Main Recurring Features Of Transformative Companies

Definitions of the “business model” vary, but most people would agree that it describes how a company creates and captures value. The features of the model define the customer value proposition and the pricing mechanism, indicate how the company will organize itself and whom it will partner with to produce value, and specify how it will structure its supply chain. Basically, a business model is a system whose various features interact, often in complex ways, to determine the company’s success.

How Business Models Work

Many models replace a linear consumption process (in which products are made, used, and then disposed of) with a closed-loop, in which used products are recycled. This shift reduces overall resource costs.

A Closed-Loop Process

Many new models offer products or services that are better tailored than the dominant models to customers’ individual and immediate needs. Companies often leverage technology to achieve this at competitive prices.

The Six Keys to Success: A More Personalized Product or Service

Some innovations succeed because they enable the sharing of costly assets—Airbnb allows homeowners to share them with travellers, and Uber shares assets with car owners. Sometimes assets may be shared across a supply chain. The sharing typically happens by means of two-sided online marketplaces that unlock value for both sides: I get money from renting my spare room, and you get a cheaper and perhaps nicer place to stay. Sharing also reduces entry barriers to many industries, because an entrant need not own the assets in question; it can merely act as an intermediary.

 Asset Sharing

Some models charge customers when they use the product or service, rather than requiring them to buy something outright. The customers benefit because they incur costs only as offerings generate value; the company benefits because the number of customers is likely to grow.

Usage-Based Pricing

Some innovations are successful because a new technology improves collaboration with supply chain partners and helps allocate business risks more appropriately, making cost reductions possible.

A More Collaborative Ecosystem

Innovators sometimes use technology to move away from traditional hierarchical models of decision making in order to make decisions that better reflect market needs and allow real-time adaptation to changes in those needs. The result is often greater value for the customer at less cost to the company.

An Agile and Adaptive Organization

Stashed ideas

The 6 Elements of Truly Transformative Business Models

What makes a product great is not the idea of it or what it can do, but the way it is positioned. Business positioning is not about the competitive pursuit of a niche; it's about finding the right business model.
A business model describes the rationale for the way the company creates, delivers, and captures value. Simply put, it is the way a business makes money. This includes figuring out what the product is, who your end customer is, and what the business value proposition is.

The business model

<ol><li>Who can I serve? The real boss in your startup is your client because they are the ones who decide if they buy from you or not. </li><li>How can I serve you? This means designing and developing a product that corresponds exactly to what customers would value having. </li><li>What is the value? Value is not a monetary amount, but the satisfaction someone feels using your product. Yes, this implies that the value is merely subjective. </li><li>Are you doing it for them? Unless you already know who your customer is and the type of product they might value, there is no way to answer this question.</li></ol>

Questions you need to solve to perfect your business model

How are you creating and capturing value?

The 6 Elements of Truly Transformative Business Models

4 ways to perfect your business model

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