A playbook for Generating Business Ideas

Business Model
Here are four examples of business models that after achieving success solving
one problem were successfully applied to different problems.
a. “Netflix for X”
Netflix is an entertainment company. Similar to movie theaters, cable
companies, and what’s left of physical retail movie rental stores, Netflix supplies
movies and TV shows. What’s different about Netflix is their business model.
Instead of charging on a per movie basis, similar to the aforementioned
companies, Netflix charges a monthly subscription fee and gives their customers
unlimited access to movies.
This may seem like a somewhat risky value proposition to some people. For
example, if you only watched one movie every few months, it might not be
worth it to pay a fee every month. However, Netflix has grown into a very
successful public company, thus validating that people want to pay a monthly
subscription fee for unlimited access to movies and TV shows. Netflix took the
risk of testing this business model - you don’t have to!
Several companies are now applying the Netflix business model to solve
different problems. For example, Amazon recently announced the launch of
Kindle Unlimited, which gives customers access to an unlimited number of
Kindle books for a monthly subscription fee. Similar to the movie business,
customers previously had to buy each Kindle book.
Skillfeed
offers customers unlimited access to the educational video courses on
its platform in exchange for a monthly subscription fee. This was a problem that
was previously solved by Udemy through a pay per course business model.
What this means for you as an entrepreneur is that you might find success in
supplying your product(s) using a “Netflix,” or subscription based, business
model. Seeing companies like Netflix become successful with this business

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model validates that customers want it. Supplying something where there is
some data to prove that customers want it may be more likely to be wanted than
something without data to prove that customers want it.
b. “Airbnb for X”
Airbnb is an online marketplace where people can rent out spare rooms in their
house or apartment to travelers. Renters use it as a cheaper alternative to a hotel.
This business model is actually “disrupting” several major industries. What’s so
disruptive about this business model is that it allows individuals to supply a
service that was previously only supplied by big hotel companies. The result is a
massive increase in the supply of places to rent. Per basic economics, this
drastically lowers the price of the product or service.
The Internet has made it possible for people to connect to rent rooms. Before the
Internet and Airbnb, it was more difficult to find someone to rent out their room.
You almost had to go to a hotel. Airbnb has also created a quality assurance
system that allows the two sides of the marketplace to rate each other and insure
that the respective parties are worthy of doing business with. This quality
assurance service has been provided by the government. Airbnb makes that
service unnecessary.
There are several other examples where the high cost structures, intermediaries,
and/or regulations are no longer needed. Where suppliers were previously
required to go through an expensive and profit-reducing employer or
intermediary in order to get access to demand, but can now use a low cost online
marketplace. Entrepreneurs are beginning to apply this peer to peer business
model to other industries. Here are three examples: ●
Udemy connects teachers
and students, replacing high cost brick and mortar schools.
●
Lyft connects drivers and ride seekers, replacing taxi dispatchers who
keep a large share of the drivers’ earnings in exchange for a service that
can now be provided for Lyft at very little cost via it’s mobile app.
●
Amazon Kindle Direct Publishing allows authors to publish books
directly on to the Amazon platform without having to go through selective
and high priced publishers.

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How can this can be applied to your next venture? Think of something that is
only being supplied by companies with high cost structures, that can now be
provided by a greater population. It used to cost a lot to be a journalist because it
costs so much to print a newspaper, but now people can write online. Twitter
took advantage of this redundancy, enabling anyone with a message to be heard.

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