In our upcoming book, The Invincible Company, we investigate a series of business model mechanics that have propelled companies to success.
In this post, we take a look at one means of disrupting the profit formula of a traditional business model. Reducing the overall cost structure of a business by harnessing the power of idle assets - we call these Cost Differentiators: Resource Dodgers.
Communities have shared assets and collaborated for centuries, yet the creation of the internet has made it much easier for asset owners and users to find it each other. New online communities and platforms facilitate the sharing of access to goods or services - aka 'the sharing economy'.
Prior to the rise of the sharing economy, traditional business models maintained assets and infrastructure to sell products and services to customers.
On the other hand, customers were “burdened” with ownership after they purchased a good or service. Today, consumers have a choice. They can either own goods and share them with others via online platforms or drop ownership altogether and just go for access to goods and services.
Businesses now also have a choice. They can either own all of the most important assets to produce products and services or leverage the (shared idle) assets of others. We call this business model pattern - Cost Differentiators: Resource Dodgers.
These new business models strategically reduce the most costly assets and capital intensive resources. Some of these new businesses have leveraged the idle assets owned by their partners (and often their customers).
For example, managing the heavy assets (such as a hotel chain) is replaced by the partner assets (empty housing) coupled with an online platform, and you get the business model for Airbnb.
Here are some other idle assets that have been transformed into Resource Dodger business models:
What idle assets might you leverage to reduce the cost structure of your business model? How could you create a resource-light business model and get rid of the most costly and capital intensive resources?
This is just a sampling of one of our new business model patterns from our upcoming book Invincible Company. We’ll provide updates as we get closer to the publication date.
If you’d like to keep up to date on our book, please sign up here.