Every business model is a theory of who gets paid and who pays. But business models do not emerge from reason; they fall into fashion. They’re shaped by the capital structures that fund them, the investor expectations of the moment, and the particular pressures of the market in which they were born. Each teardown here looks at a model from the inside out: what’s in it for the investors, what’s in it for the operators, where those interests diverge over time, and why this model came into existence when it did. Because a business model without its capital context is half the story. The other half is in the Capital Library.
Software-as-a-Service:
Cloud-hosted software purchased as recurring revenue
Salesforce | Dropbox
Hardware-as-a-Service:
Giving access to hardware with maintenance and upgrades
Hilti | Vivint | Philips
Data-as-a-Service:
Data, data management, or analytics as a core or underlying asset
Bloomberg | Climate Corp
Use of a product is metered, customers are charged for total usage in a specific period
AWS | Magazino | BASF
Key features are made available for free with premium features made available after an upgrade
Linkedin | Slack
A platform for economic exchange between two user groups with or without a transaction fee
Didi | Airbnb | Etsy
A product, service, membership or experience is offered to a customer for periodic use
Netflix | Notion
Direct-to-Consumer:
A direct relationship with a customer through digital marketing
Warby Parker | Glossier
The core product (the razor) is priced for uptake, while more money is made on the consumable (the blade)
Nespresso | Gilette
A group of consultants or skilled experts that deliver advice, counsel, or solutions for clients
McKinsey | Cooley | Accenture
Companies attract an audience to predict or cultivate intent, then sell access to advertisers
Facebook | Google | Hearst
Firms charge a published predictable fixed price rather than by the hour or other variable pricing
FedEx | USPS
Infrastructure-as-a-Service:
Providers give users the ability to configure processing, storage, and networks through the cloud
AWS | Azure | Alibaba
Managed Services Providers:
Strategic partners take on, operationalize, transform, and optimize business operations
McKinsey | Cooley | Accenture
Platform-as-a-Service:
Providers give developers services to accelerate software deployment with reduced cost and complexity
AWS Elastic Beanstalk, Heroku
We have a long list of alternative capital types to explore, what do you think we should describe next?
Models-as-a-Service Providers: Pre-trained machine learning models over the internet for free or for a fee.
OpenAI | MSFT | Amazon
Outcomes-as-a-Service Providers: Selling products or services with payment tied to specific results for customers or public benefits.
Philips | Rolls Royce | Indigo Ag
Members pay dues to belong to an organization to produce and share infrastructure, get access to programs, or earn credentials.
SWIFT | Linux | AP
