Business Models

Business model types can act as blueprints for companies and quickly communicates what your core strategy of creating revenue is. There are some well known business model types but new ones are created constantly to describe new ways of doing business. Some companies will employ more than one business model (e.g. brick-and-mortar retailer).

Here we explain some of the common ones you might be asked to select during an Innoscout application:

Name	Description	Examples
Advertising	A free product or service is shown alongside advertisement to create revenue.	Free online video platforms
Crowdsourcing	A company's product or service is generated (or strongly supported) by the users of the product or services of the same company.	Wikipedia
Data Licensing	Collected, aggregated and processed data is sold for analysis, advertising and other purposes.	Weather prediction services
Decentralized	The product, service or data is not owned by a single entity	Blockchain
Pay-as-you-go	The product or service is paid for based on it's usage	Web infrastructure companies, most SaaS companies
Peer to Peer	The product or service facilitates the exchange of information, products or services between one or more users of the product or service	Classifieds platform, hobby forum
Social Enterprise	The primary stakeholder of the company is social/environmental impact before financial interests (but can still be for-profit)	Examples
Affiliate	Sells products and services on behalf of another partner company but does not hold inventory (partner company provides product or service directly to the end customer).	Dropshipping
Agency	Bundles own products and services, with products and services of partner companies to create a full package product or service for customers from a single provider	Web design agencies, App development agencies
Aggregator	Provides products or services from partner companies under a unified brand.	Taxi hailing apps, Flight search engines
Brick-and-Mortar	Face-to-face selling of products and services.	Hairdressers
Distributor	Does not make a product, but resells the finished product of another company to the end customer or to another company.	Car dealerships
eCommerce	Anonymous (Not face-to-face) selling of products and services (typically via the world wide web).	Web shop
Franchise	Licenses a business model/set of operating practices/branding for use (pays royalties for that usage).	International fast food chains
Freemium	A basic version of a product or services is provided free of charge (often as a marketing channel) and profit is generated from other (more valuable) versions of the product or service.	Web file sharing services
Low-cost	Basic product or service is provided as low as possible, but profit is generated through other optional and/or complementary products and service that are not included with the basic product and priced at market or above market rates.	Low-cost airlines
Manufacturer	Makes a finished product from raw materials, sold directly or through middlemen (e.g. wholesaler, dealer, broker).	Car makers
Online Marketplace	Provides references to products or services from partner companies under the partner's brand, but adds complementary services (e.g. rating, delivery, insurance, quality control).	One stop web shops (e.g. Amazon)
Retailer	Does not make a product, but resells the finished product of another company to the end customer.	Supermarkets
Subscription	A product or service is provided on a regular basis for a recurring fee.	Razor blades for shaving, Meal prep kits