3 types of digital business model construction
A short post to structure your knowledge about business models in the digital world or to see them from a different perspective.
Attention
A business model where products capture the user's attention and encourage frequent interaction.
Examples: Messengers, social media, media outlets, music subscriptions, games, movie platforms.
Key metrics: The amount of time users spend on the product, and the number of active users.
For example, the revenue of music platforms can be calculated as follows: DAU (daily active users) X average listening time X revenue per listening minute.
Monetization method: On-screen advertising. It is crucial to keep users engaged as long as possible to show them the maximum number of ads. Therefore, there is competition for the attention of users who view the ads.
Aleksandr Kosenko
Transaction
A business model where value is exchanged: the customer pays money, and the business provides what the person has paid for.
Examples: E-commerce and offline sales.
Key metrics: Number of purchases per user, average receipt, total amount, and net profit per user.
Monetization method: Payment for the product and incentives for the user to return and make more purchases through discounts, promotions, and special offers.
Aleksandr Kosenko
Productivity
The product helps you solve problems more productively or on a new level.
Examples: Adobe Creative Cloud, Figma, Notion.
Key metrics: Action objective. For example, how many documents, projects, blocks, and other units the user creates and interacts with.
Monetization method: Subscriptions, version upgrades, enhanced features, additional features, and referral programs.
Aleksandr Kosenko