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The perfect business model

We’ve been doing a lot of thinking around digital and social ecosystems lately, which led me to the connection between a company’s digital ecosystem and its business model – which is also an ecosystem of sorts (or at least it should be).

I won’t go into detail about my definition of an ecosystem as it’s been covered elsewhere but the basic idea is to:

  • Create a stable and self-sustaining relationship between all assets and parties where everyone benefits.
  • Ensure there is an elegance or natural beauty around the structure of one’s ecosystem so that energy is conserved (e.g. a minimum of additional effort or money is required to fuel it)
  • Ensure the energy expended creates something that other parties in the ecosystem will value and use.

For these reasons and many more, I’ve always considered okcupid to be the best example of perfection when it comes to their business model.

  • Users look for dates on their platform and data gleaned from usage is served up to help improve their performance
  • These data are aggregated and compiled into dating reports which are published on their blog and widely syndicated helping to grow usage
  • The platform (and data) are sold to advertisers which funds ongoing development (or did until bought them)

The simplicity and elegance of okcupid’s model is made possible by their business and by the fact that they are digital. However, the same principles can be applied to physical product (and service) businesses as well.

In the case of a product business a number of additional steps need to be considered:

  • Users participate in a platform which inspires consumption or usage of the product while also generating content (Burberry’s Art Of The Trench is a good example)
  • The platform serves as a canvas for co-creators to collaborate with the brand and deliver richer content (Mountain Dew’s Deweezy project is an interesting example of this)
  • Content generated through collaboration and participation can be placed in advertising or even better, can be used to fuel content partnerships which cost nothing or even generate revenue for the brand (Redbull is the master of this).

Of course this is incomplete as it does not consider the supply and distribution chain of the physical product itself, but it does establish a much more efficient and sustainable model for marketing and establishes the brand in the role of content platform rather than publisher. While some brands like Redbull may migrate towards a publishing model, I’d guess that’s not the smartest move for every brand and a model something along the lines of the one above would be much better suited.

I also think suppliers and distributors within the physical product chain could play a role within this content ecosystem but that’s another post. I’d love to hear your thoughts.

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