February 22, 2007
Many successful innovations today that spread like wild fire are ones that have helped people get out of their boring cubicle lives and become “mini-entrepreneurs” or more appropriately according to trendwatching.com, “mini-entrepreneurs“.
Just today I read a very well-thought and well-researched post on Web Worker’s Daily blog that talks about “10 new ways to make money online”. If you notice the innovations that led to the creation of this post, they are essentially leveraging the power of the internet to connect disjoint masses of people and help them transact with each other online. I think this type of “platform model” is a very well-proven and successful business model for innovations today.
The value of a company in a platform business model mainly comes from its active userbase and so does it competitiveness, as opposed to old school companies where the corporation’s competitiveness was valued looking at its technology or patents. Look at the following companies that are using the internet as a platform and how they make money:
- Google.com acts as the platform between advertisers and content publishers and charges a cut in the process.
- Ebay.com acts as the platform between sellers and buyers and charges a cut in the process.
- Kayak.com acts as the platform that aggregates sellers and helps buyers compare and find the best deals, of course getting an affiliate commission in the process.
- Elance.com, mturk.com, exchangehut.com, facebook.com … the list goes on and on
As the smart and successful young entrepreneur, Fabrice Grinda will tell you also as his criteria #2 for selecting a business, it helps to stick with a business model that is well understood and proven (not that you cannot create new business models, but few people and fewer corporations are willing to take that risk).
So, next time you’re brainstorming business ideas, think of how you can use the internet as a platform for connecting people and generating value in the process.
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