Business model Archives – Richard Brisebois PhD

iPad not alone

Just as Apple’s iPhone shook up a complacent cellphone industry, the company’s iPad is provoking PC makers — and non-PC makers — to fight back with new devices.

Google — a search and advertising company — is soon expected to begin selling its version of a slate computer, like Apple’s iPad, while Nokia — the world’s biggest cellphone maker — is planning to enter the digital book market through a slate-cum-e-reader as well.

Microsoft, the maker of computer software, is flirting with the idea of selling its own version of a slate, joining traditional computer companies like Hewlett-Packard that have already committed to such products.

In part, these companies are feeling the pressure to respond to the iPad, which went on sale April 3. But their decisions to develop the hybrid products also demonstrate their desire to expand their core businesses, and to experiment with varying kinds of business models and technologies.

via NYTimes.com.

2010-04-21

Somali pirates’ business model

A basic piracy operation requires a minimum eight to twelve militia prepared to stay at sea for extended periods of time, in the hopes of hijacking a passing vessel. Each team requires a minimum of two attack skiffs, weapons, equipment, provisions, fuel and preferably a supply boat. The costs of the operation are usually borne by investors, some of whom may also be pirates.

To be eligible for employment as a pirate, a volunteer should already possess a firearm for use in the operation. For this ‘contribution’, he receives a ‘class A’ share of any profit. Pirates who provide a skiff or a heavier firearm, like an RPG or a general purpose machine gun, may be entitled to an additional A-share. The first pirate to board a vessel may also be entitled to an extra A-share.

At least 12 other volunteers are recruited as militiamen to provide protection on land of a ship is hijacked, In addition, each member of the pirate team may bring a partner or relative to be part of this land-based force. Militiamen must possess their own weapon, and receive a ‘class B’ share — usually a fixed amount equivalent to approximately US$15,000.

If a ship is successfully hijacked and brought to anchor, the pirates and the militiamen require food, drink, qaad, fresh clothes, cell phones, air time, etc. The captured crew must also be cared for. In most cases, these services are provided by one or more suppliers, who advance the costs in anticipation of reimbursement, with a significant margin of profit, when ransom is eventually paid.

When ransom is received, fixed costs are the first to be paid out. These are typically:

Reimbursement of supplier(s)

Financier(s) and/or investor(s): 30% of the ransom

Local elders: 5 to 10 %of the ransom (anchoring rights)

Class B shares (approx. $15,000 each): militiamen, interpreters etc.

The remaining sum — the profit — is divided between class-A shareholders.

via UN Dispatch, as per report to the United Nations Security Council.

2010-03-31

Print media: driving forces meet business model

The Christian Science Monitor will cease publishing a weekday paper. Time Inc. is was cutting 600 jobs and reorganizing its staff. The largest newspaper publisher in the country is laying off up to 3,000 people. The Los Angeles Times‘ newsroom is half the size it was just seven years ago. The 15th-largest paper in the country is reducing its editorial staff by 40 percent.

The paradox of all these announcements is that newspapers and magazines do not have an audience problem — newspaper Web sites are a vital source of news, and growing — but they do have a consumer problem.

Stop and think about where you are reading this column. If you are one of the million or so people who are reading it in a newspaper that landed on your doorstop or that you picked up at the corner, you are in the minority. This same information is available to many more millions on this paper’s Web site, in RSS feeds, on hand-held devices, linked and summarized all over the Web.

Historically, people took an interest in the daily paper about the time they bought a home. Now they are checking their BlackBerrys for alerts about mortgage rates.

“The auto industry and the print industry have essentially the same problem,” said Clay Shirky, the author of “Here Comes Everybody.” “The older customers like the older products and the new customers like the new ones.”

For readers, the drastic diminishment of print raises an obvious question: if more people are reading newspapers and magazines, why should we care whether they are printed on paper?

The answer is that paper is not just how news is delivered; it is how it is paid for.

More than 90 percent of the newspaper industry’s revenue still derives from the print product, a legacy technology that attracts fewer consumers and advertisers every single day. A single newspaper ad might cost many thousands of dollars while an online ad might only bring in $20 for each 1,000 customers who see it.

2008-10-29