One good news that eased the tension amongst Nigerian youth during the #EndSars protest was the acquisition of Paystack by Stripe for a whooping sum of $200 million. Converting it to naira is very scary so let’s not do that.
Paystack is a 5-year old Nigerian payments startup that serves as a middle man between service/product providers and their clients.
An article by Techpoint.Africa shows that over 60,000 businesses in Nigeria and Ghana use this payment platform. Paystack’s business model is something I feel should we should study in order to learn from them.
I saw a tweet by one of the #techtwitter community members about people wanting to start a fintech company upon hearing the success of Paystack. Well, it is normal for people, particularly Nigerians, to want to copy any successful business. That is why a woman will start a snacks business in a small stand by the road and in a few months, several other snacks outlets will emerge to compete with her.
Several business models can be used to develop and kick start your business idea. These models have been used by several businesses and have proven to be profitable. Do you have an existing business idea or are you still thinking of what to do? Take a look at these business models to see how you can fit it, build a profitable business and maybe become the next most talked about and celebrated startup/company.
Peer-to-peer business model
This is a model deployed by Paystack, Airbnb, Uber and Upwork. These companies act as middlemen between two individual parties. They create value for both the demand and supply side of the business relationship and make their money via commissions.
Affiliate marketing business model
Popularly known as referral business, this model is currently putting money into the pockets of people. Companies that use this model make money by featuring, reviewing, and recommending other company’s products or services. Examples are product review websites that are paid based on sales opportunities that they bring to their vendor companies.
eBay Partner Network, Amazon Associates and ClickBank are some of the companies using this model.
E-Commerce business model
There is a noise about e-commerce that will soon become louder. This is a simple yet most promising business model as it allows buyers and sellers to connect and transact using an online platform otherwise called online shop. Small businesses are also leveraging on this model to make more sales (SalesCabal is doing this for SMEs).
It can be deployed in catergories such as Business to Business (B2B), Business to Customer(B2C), Customer to Customer (C2C), and Customer to Business (C2B).
Jumia, Alibaba, eBay, Amazon etc are using this model.
Blockchain-based business model
Blockchain is believed to be the future of technology. It has changed the entire landscape of transactions, involving decentralized network system on a global scale.
Many cryptocurrencies like Bitcoin and Ethereum use this business model.
Consulting business model
You do not need a product to start a business or a company. Therefore, if you are an expert in any subject, you can offer consulting services to brands. This is one business model that can generate revenue for you to even start another business. You can decide to charge on an hourly basis or certain percentage on completion of the project. McKinsey and Boston Consulting Group are multi-billion-dollar businesses that are based on this model.
Online educational business model
Covid-19 pandemic has made people appreciate online education more than ever. This method can take over the relevance of the four walls of the physical classrooms. If you have a skill that you can teach, you can use this business model to give out educational resources to teachers and students.
Khan Academy, FutureLearn, LinkedIn learning, Coursera, Udemy and edX are some of the common learning platforms that are using this model.
Freemium/Premium business model
Evernote, Canva, Zoom, Mailchimp and some other software have made life easy for us. They allow the use of their software for free although users have limited access to some of the features. To unlock these features, users are expected to pay. This is where the Premium Business Model comes in.
The Freemium Business Model is a good way to encourage customers to use a software or application.
Subscription business model
Did you pay to watch Citation? King of Boys? And some Netflix Series? Maybe you get to download them somewhere else but some people actually pay to see movies on Netflix. Netflix uses a Subscription Business Model which allows the customer to watch movies by paying a fixed amount every month or year depending on the customer’s preferred and chosen plan. In this type of model, the company has to provide enough value to its customer, so they can visit the website over and over again.
Some online educational sites also run on this model.
This model is useful for content or service-based websites.
One-for-one business model
The one-for-one business model can be referred to as a social entrepreneurship business model. It combines both profit and not-for-profit services. An example is TOMS shoes. The best example is TOMS Shoes that provides shoes to underprivileged children globally for every pair of shoes sold.
Annually, HultPrize is an annual, year-long competition that crowd-sources ideas from MBA and college students after challenging them to solve a pressing social issue around topics such as food security, water access, energy, and education. If you are looking to participating. You might want to adopt this model and/or combine it with other business models.
The sustainability of business built using a one-for-one business model is usually questioned as it is not majorly profit-oriented.
Razor and blade business model
You buy a printer once but you keep buying a new ink cartridge (an ongoing expenses as a user). This is a model, that sells an item (Razor) at a low price while another associated item (blade) is sold at a premium price. It allows for continuous generation of revenue.
User-generated content business model
Content creators now find a place to display their art via videos, pictures and writing because of this particular model. This model is fast-growing and creates value for the content creators, platforms and users. Content is compiled and sold to companies who want to exploit consumers’ ideas and get content to promote their brands as well. YouTube, Quora, Reddit are few platforms using this model.
There are over 50 business models but these 11 have been carefully sourced out to give you a nudge that you can explore several business models to build your business.
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