Matteus

The business model is the way you charge for your products and services - when, how, for what, in what, where, of whom, why and how often.

The business model corresponds to people’s ideas, behaviours and response patterns.

Now, what is truly interesting is that on the one hand, people are always people - we’re predictable - but on the other hand, there are rapid changes going on in services, products and in technology, in concepts, in attitudes, perspectives. All of these things change the experiences available to us, as well as the different kinds of “good” we’re willing to pay for. And sometimes, the changes suddenly mean that the business priorities of financing the existence of a particular good become skewed, compared to what conventional wisdom says, and the way we’re accustomed to doing things. And when this happens, the conventional business model becomes untenable - simply ineffective and expensive.

An obvious example is the music industry, where the conventional business model tied the payment to production of physical media like CD:s. But of course, CD:s are no longer necessary for the distribution.

Because many people prefer to not see what really is, but rather see what they want, what they are used to, or just plainly what somebody tells them to see, we get reactions like:

“Let’s make downloading music criminal” or
“All music should be free” or
“Let’s create ways to sell music and other files via the Internet, and block the ability to share it for free.”

This is all a consequence of the idea that distribution of music should be paid for. The same old idea! It’s stupid.
So Itunes is a success? Well - not because of the business model for selling music. It’s the same old same old. And it’s not music that’s being sold. I think Itunes is a success because it tapped into another value that we want to pay for on the web - the user experience. The feeling of having an Ipod. The feeling of being legal. This is what we pay for! Not the music. And certainly not it’s distribution.

By mentally mapping the way people always are, being people, with the real, factual constitution and qualities and functions of the new attitudes, technologies, concepts, perspectives experiences and types of good people are willing to pay for, we can discover new ways to charge for goods, ways that are much more appreciated by the customer and much more profitable for the supplier.

And this is exceptionally valuable, because whenever this happens, we are able to either (1) enjoy an enormous increase of the good in question, or (2) free an amazing amount of talent and resources to create some other good (or just enjoy life). Or both.

This is the deal with new business models.