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Kind of Meta: The meaning of "business model," in a software/startup context is somewhat quaint: “All it really meant was how you planned to make money.” "Mod
by dalbasal 6y ago
Kind of Meta: The meaning of "business model," in a software/startup context is somewhat quaint:
“All it really meant was how you planned to make money.”
"Model" seems grandiose for a word that could be simplified to "income source." Comparisons to restaurants tend to be strained. Restaurant "business models" are not generally that complicated: People pay restaurants for food. Some deliver. The reason software people contemplate business models and restaurateurs don't is that "software," regardless of licensing, doesn't come with a standard business model. Every one is a snowflake.
In software, "business model" is a wide range of possibilities. Most of them failing. Many quitely succeeding. A few explosively winning. Is AirBnB a software business model? Is Adwords? Even MSFT, which does literally exchange software for money... MSFT's "business model" is a complicated, impossible to replicate thing.
The majority of software that's literally exchanged for money is done with some sort of services/support bundled in... and the customer is a business.
If I give it away then why do people buy it?" is not even a sensible question. What does that question mean for Google, Apple or Amazon? There are plenty of exceptions: Photoshop, MS office... but even these are becoming online services and the "business model" is less directly "software for cash."
TLDR, software doesn't have a standard business model regardless. Weighted by revenue share, the vast majority of software revenue comes from advertising, luxury electronics, web services or some other "business model" that isn't contradicted by OS in any way. "Selling software" in a sandwich-4-cash comparable way is surprisingly rare, regardless of license.
- deleted 6y ago[deleted]
- Judgmentality 6y ago> Every [software business] is a snowflake. As much as I appreciate this comment, it's less limited to software than you paint it to be. When you start digging into how businesses actually make money, you quickly realize it's rarely what it seems. Many gas stations that are wildly successful, such as Sheetz and Wawa, don't make their money selling gas, they make it selling food using gas as a commodity to get the customer in the door. Likewise, McDonald's doesn't really make its money selling food either, although this is a lot more complicated and heavily involves real estate and franchising. In other words, nothing is really as it seems when you peel back the veneer. Software just happens to be relatively new and is poorly understood by most people.
- iamacyborg 6y agoIKEA is another great example of a business that uses food to get people through the door.
- gizmodo59 6y agoI have never been to IKEA to get food and then bought furniture as an afterthought. It kept me in once I’m there but it did not get me in the first time. Granted I live 40 mins away from IKEA.
- AussieWog93 6y agoI don't think it's meant as a primary attraction, but given the choice of going to the furniture store with a hot dog at the end, or a furniture store with nothing, you'll choose the hot dog one every time.
- SanFranManDan 6y agoBut that is significantly different from the gas station example. The parent said that the gas stations primary income is selling food not gas. Ikea primary income is selling furniture. It would be much more interesting if they actually made more money selling food than gas.
- AussieWog93 6y agoI think his comment was about the food in IKEA being a loss leader, like petrol at the petrol station.
- ekianjo 6y agoCertainly not sold at loss based on how much they charge.
- 6y ago
- xbar 6y agoThis does not consider b2b at all, where selling software in a sandwich-4-cash comparable way happens on the orders of many, many billions of dollars per year.
- notretarded 6y agoIs it that hard to type Microsoft instead of the ticker name?