This long weekend provided a lot of time for reading and more thinking on entrepreneurship. One interesting example of entrepreneurship revolves around the history of the automobile. As we know the car industry started with this famous quip from Henry Ford.
"If I had listened to the customers I would have produced faster horses."
Overcoming the doubters and a bankruptcy Henry persevered and produced the Model T. Along the way he changed the traditional distribution strategy and created franchised auto dealers. (Note: for business model enthusiasts this is why we include distribution as part of a business model, as described in my book Billion Dollar Company.)
What is interesting to me is the new business opportunities that came from the automobile. First came taxis (very, very short car rentals) and then came rental car companies (longer term rentals). Essentially both of these new businesses just applied the time share pricing model to an existing business (1 of 15 pricing models in my book). This ends the book advertising portion of this post :) and brings us hopefully to the substance.
One of the methods I like to find new business concepts is the abundance-scarcity paradigm (first discussed here). This model says look for what is abundant and then look for the related scarcity. As we all know, information is now abundant and the scarcity is finding what we need or organizing the information in a useful way. This recognition of the scarcity has lead to a zillion IT startups, but where I think the auto story can help us is in looking for different pricing models for information. For example:
- Why can I buy just one article from Harvard Business Review (HBR) but not more magazines
- Why can I not buy access to a database for just one search instead of having to pay an annual subscription
- Why can I not get a cheaper rate on a data subscription if I only have access between 2-4 am EST
If you have other new business ideas related to pricing models for information, show them in the comments.
Image credit: probertencyclopaedia.com
My new book, Billion Dollar Company: An Entrepreneur's guide to business models for high growth companies, is available on Amazon. See the fourth strategy Porter should have added, determine if the market opportunity is large enough to interest venture capital and learn the 5-step process to really develop a business model. Book website.
