Resources consumed:
-Gil and Frank Discuss Business Models video
-Business models on the web article
-Business model history, both brick and mortar and virtual at: http://en.wikipedia.org/wiki/Business_model
This week I think that I will continue to enjoy the content of this course as it continues to give me a better perspective on internet marketing, and helps to frame my thoughts on my own small business idea that will be base on internet listing and advertising. As a first time entrepreneur in a couple of years, I plan to get a small business off the ground with myself alone (and some controller and accounting help from my wife) and each subject that I can apply towards that aim will only help give me a better reference for research. For now, it is just an idea that I toy with, but subjects like this on the subject of monetizing an internet business are interesting for me especially. While my idea does not base in internet dealings alone, it just uses the internet as a method to connect customers with my tangible products, I can see the challenge in any model related to a normally "free" information source like the internet.
The video discussion was a great overview of what, in my mind and most other business followers, is an issue that is constantly being debated: how to monetize a service or new web feature that is past the initial euphoric days of exponentially growing traffic and buzz. A lot of the ground-breaking types of businesses like YouTube and Facebook have been surprisingly hard to call profitable in the nuts and bolts sense, even amid wild valuations like Goldman Sach's recent private valuation of the company at a staggering $50 Billion dollars. So it seems that yes, some monolith companies can convince the investor world that their companies are ultra valuable, but what about the rest? I enjoyed the iTunes discussion about its interaction with the music industry and learned a couple of new things like certain artists have withheld their song licensing from iTunes. I also enjoyed hearing about the Radiohead example: I was one of the fans who chose to pay for the album in 2007 and I dug a little from the Wikipedia page about that album and found that "According to an Internet survey conducted by Record of the Day of 3,000 people, about one-third of people who downloaded the album paid nothing, with the average price paid being £4." Now, I didn't go so far as to back up the euro to dollar conversion rate at the time, but I think we can see that 4 Pounds is a bit less than the normal album. Interestingly, their latest album "The King of Limbs," they chose to charge a set price on their website and iTunes. Certainly was a newsworthy new business model for the "In Rainbows" album and I think we might see more things like that in the future as we shift ever towards a virtual market.
I was surprised somewhat at the depth and breadth of models present in the article, although I should have seen it coming given the diversity and growth of internet based businesses. I liked the layout of the pdf since it allowed me to quickly click on links to models of businesses that I had not heard of and learn about the model with a practical example. I learned about several models that I had not heard of before and got to learn a bit more about models that I had heard of, such as Priceline.com and the most surprising thing from the article is that some of these models are patentable. The idea of that had never really occurred to me but it seems that it really falls under the realm of intellectual property just like anything else. Any innovative person with enough gumption to get a business off the ground and make it work enough that others take notice should be able to also protect their proprietary model.
Finally, I did a quick recap of the Wikipedia site to see if I could learn any more about the model of my own business idea and picked up a few interesting ideas. It is hard to believe that a couple of years ago Wikipedia didn't exist but it sure is useful now!
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