UNIT III: Business Models and Strategies

• Business models for start-ups

• Business-to-Business: aggregator, marketplace and
subscription
• Business-to-Consumer – Software as Service (SaaS),
marketplace, services etc
• Peer-to-Peer – lending, crowd sourcing, exchange etc
• Key success factors for start-ups
• Strategies for scaling and growth
• A business model describes the rationale of how a business
creates, delivers, and captures value.
• Entrepreneurs were able to create a roadmap that captures
what the business is, how it works, and how it is financially
sustainable.
• The business model is a roadmap that helps entrepreneurs
to better understand how the pieces of their business fit
together in relation to what they are doing, how they are
doing it, for whom, and why.
• Business models are relevant to both startup and existing
businesses.
• For startups, thinking about the overall business model is
a way to test the feasibility of a new opportunity.
• For existing businesses, it’s a way to articulate how you
are doing business as well as think about new spaces for
innovation or growth.
• Business models are constantly evolving to reflect
changing business environments and customer needs.
• The very idea of calling it a “model” shows that it’s
temporary, subject to change, adjustable, and flexible.
Companies need to ensure and continuously reassess
that their products and services both offer
 BUSINESS MODELS FOR START-UPS
1. Freemium business model
2. Subscription business model
3. Pay-as-you-go business model
4. Ad-based business model
5. Transactional business model
6. Direct-to-consumer business model
7. Marketplace business model
8. Razor and blade business model
9. Private label business model
10. Franchise business model
1. FREEMIUM BUSINESS MODEL
• The freemium model lets the users to access the base application or
service for “free” before inviting them to upgrade to a “premium”
license to unlock advanced (often necessary) features.
• The basic features work as a standalone product, but the user
interface (UI) constantly reminds users what they could utilize if they
upgraded.
• Upgrades could require a monthly subscription or a one-time
payment. For example, Uber suggest lets users upgrade to a
$29/month plan or a lifetime business plan for $290.
Examples of the freemium business model:
•Google Drive
•Zoom
•Canva
 2. SUBSCRIPTION BUSINESS MODEL
• The subscription model requires users to pay a monthly (or annual)
subscription to access your products and services.
• Some businesses use a combination of freemium and subscription
models to bait and hook customers, while others make themselves
more premium by offering no free alternatives.
• The trick with a subscription-based business model is to provide
continual value.
• You can’t just earn a customer one month and lose them the next you
need to keep them satisfied and paying for your service.
Examples of the subscription business model:
Netflix
Amazon Prime
 3. PAY-AS-YOU-GO BUSINESS MODEL

• The pay-as-you-go business model has users pay based

on their consumption.
• Electricity and water bills as pay-as-you-go models the
more you use, the more you pay.
• With pay-as-you-go pricing, consumers pay for what they
get.
• There’s no wasted subscription they might forget about
they trade value for value.
Examples of the pay-as-you-go business model:
•Amazon Web Service (AWS)
•Audible
 4. AD-BASED BUSINESS MODEL
• Advertising business models offer free services in exchange for ad views.
• Consumers get to use the product for free as much as they want, but the
more they use it, the more ads they’ll see (which is a win-win for businesses).
• This business model works perfectly for services that customers might not
be willing to pay to use, but they’d be happy to consume ads.
• Businesses collect behavioral data about customers and offer it to
advertisers to better reach their target audience.
• The better the advertisers do, the more money one make and the cycle
continues.
Examples of the ad-based business model:
•Instagram
•TikTok
•Google Search
•YouTube
 5. TRANSACTIONAL BUSINESS MODEL

• Transactional business models typically look like e-commerce

websites and brick-and-mortar stores.
• Customers buy specific items or services for a one-time cost, whether
that’s an e-book or an electric drill.
• The transactional business model is probably one of the most common
(and easy to adopt) revenue-making models.
• Business buys (or produces) goods at a discount or wholesale cost
and marks up those prices to buyers.
Examples of the transactional business model:
•Apple
•Nike
•Wendy’s
•Walmart
•Ford
 6. DIRECT-TO-CONSUMER BUSINESS MODEL

• Direct-to-consumer (D2C or DTC) business models eliminate the

middleman and sell directly to the customer.
• This eliminates the cost and profit sharing of being on marketplaces
like Amazon, eBay, or physical stores like Walmart and Target.
• The D2C business model works great when already have an
audience, but it can be hard to start from scratch.
• Building brand awareness and an initial customer base can be
difficult, especially when would-be buyers struggle to find specific
products.
• Loss of profits and the exclusivity of business, but will gain access to
a larger pool of buyers through a global marketplace.
 7. MARKETPLACE BUSINESS MODEL

• The marketplace business model operates as a platform to connect

sellers and buyers.
• Startups operating under this business model don’t sell their own
goods, Amazon is an example of a marketplace that also produces
and sells its own products (or does white labeling).
• Marketplace platforms make money from transactions on their
platform.
• They expose sellers to a broader audience but take a small portion
of their sales in exchange for the exposure.
Examples of the marketplace business model:
• Amazon
• eBay
 8. Razor and blade business model
• Razor and blade business models sell an entry level item at a low price (or
loss) but profit from add-ons and refills.
• It was made popular by men’s razor companies selling cheap razors but
requiring you to purchase expensive replacement blades.
• Sony sells their Play station console at a loss, but they profit from online
services, in-game purchases, and their online marketplace.
• This business model is great for budget minded customers that don’t want to
invest in a product they’re not sure they’ll love.
• It’s an inexpensive way for them to experiment with new items and if they like
it, they often become long-time buyers.
Examples of the razor and blade business model:
•Amazon Kindle
•3D printers
 9. PRIVATE LABEL BUSINESS MODEL

• Private-label (or white-label) business models create products or services

through a third-party provider but sell them under the brand’s name.
• You’ll see this commonly with educational content created using a
third-party platform but branded entirely with the startup or creator.
• Private labeling is a typical way for brands to sell their own supplements.
• Most of the ingredients might be the same, but their brand design differs.
Examples of the private label business model:
•Cosmetics
•Paper products
•Supplements
•Cleaning products
•Frozen foods
•Snacks
 10. FRANCHISE BUSINESS MODEL

• Franchise business models are businesses that operate using the

trademarked branding and products of the parent franchising company.
• They’re simple to startup and operate because most of
the marketing material and products have been created and loyal customers
to the brand exist.
• Franchise fee to operate under this model, which can eat into your profits.
• If there’s a market need and a franchise solution to solve it, it’s often easier
to open a franchise than to try and introduce the same solution (under a
brand-new brand) to the market.
Examples of the franchise business model:
•Subway
•7-Eleven
•The UPS Store
•Anytime Fitness
 11. DROPSHIPPING BUSINESS MODEL
• Drop shipping is a form of retail business in which the seller accepts
customer orders without keeping stock on hand.
• This means one don’t have to worry about storing goods in a store or
warehouse and not to worry about storage fees or expiring products.
• Instead, just sell and market the product, while third party
dropshipping supplier takes care of all the inventory, shipping,
returns, and customer service.
• It’s a low-investment way to do business, especially if you have a
small team but want to scale your customer base.
Examples of dropshipping suppliers:
• AliExpress
• Shopify
• IndiaMART
 12. AFFILIATE BUSINESS MODEL

• With the affiliate business model, you don’t sell or manufacture your own
products or services.
• Instead, get paid for recommending other businesses’ goods.
• When a customer uses your link (or coupon code) to make a purchase, you
get paid a percentage (or commission) of the sale.
• Affiliate business models are popular with influencers, bloggers, teachers, and
coaches.
• These individuals usually don’t have their own businesses, but they make
money by recommending trusted products and services.
Examples of the affiliate business model:
•Ajio
•Walmart
•Flipkart
•Skyscanner
 BUSINESS-TO-BUSINESS
In the startup ecosystem, "business-to-business" (B2B) refers to a type of
commerce or business model where a startup primarily sells its products or
services to other businesses rather than directly to consumers. In other words,
the customers of a B2B startup are other companies.
Here are some key characteristics and aspects of B2B startups in the business
ecosystem:
Target Audience:
B2B startups target other businesses as their customers, providing products or
services that cater to the needs and challenges faced by other companies.
Products and Services:
B2B startups often offer products or services that help improve the efficiency,
productivity, or operations of other businesses. This can include software
solutions, consulting services, specialized tools, or other business-oriented
offerings.
Sales Process:
The sales process in B2B startups is typically more
complex and involves building long-term relationships.
Sales cycles may be longer, and decisions may involve
multiple stakeholders within the purchasing organization.
Marketing Strategies:
B2B startups often focus on targeted marketing strategies,
content marketing, and networking to reach potential
business clients. Building trust and showcasing the value
of their offerings are crucial elements of B2B marketing.
Customization and Integration:
B2B products and services may require customization to meet the
specific needs of each business client. Integration with existing systems
and processes is often a consideration in the B2B space.
Relationship Building:
Building strong relationships with business clients is crucial for B2B
startups. This may involve personalized customer support, ongoing
communication, and a deep understanding of the client's business
challenges.
Revenue Model:
B2B startups often have subscription-based or contract-based revenue
models, where they provide ongoing services or support to their
business clients.
Business-to-Business: Aggregator, Marketplace and Subscription

AGGREGATOR BUSINESS MODEL:

•An aggregator business model refers to a type of business
that collects and organizes information, goods, or services
from multiple sources and presents them in a unified and
convenient manner to consumers.
•The aggregator model is like a big hub where different
suppliers or service providers come together to offer their
products or services in one convenient place.
• The aggregator business model is a relatively new form of
business model
•Companies like Uber and Airbnb can all be called
aggregators.
•Uber (bringing together drivers and passengers) or Airbnb
(bringing together hosts and guests).
•There is a dearth of other companies who are using this
model in their respective fields and marketing themselves as
being the “Uber of X industry”.
The aggregator is simply a website that creates a brand
and also creates partnerships with the actual service
providers.
The job of the aggregator is to collect information from various
service providers, display them on their websites and sell the
product.
•The actual job of providing the service is done by the service
providers.
•From the customer’s point of view, aggregators help them
avoid the hassle of due diligence.
•Any service provider listed on the aggregator’s website has
generally been vetted to ensure a basic level of service
quality.
•It is common for aggregators to try to standardize various
elements of service in order to provide a standardized
experience.
•Hence, customers can be assured of a good service
experience because of the brand association.
 How does the Aggregator Business Model work?
•Aggregator gets in contact with the provider, offering a
partnership plan.
•Providers and aggregator sign up contracts, becoming
partners.
•Aggregator creates a network of partnerships.
•Aggregator invest in a great marketing strategy to empower
its brand.
•Users attracted by aggregator’s promises buy through its
platform.
•Partners get their customers and aggregator, its
commission.
Uber operates on an aggregator business model, acting as a platform that
connects riders (consumers) with drivers (service providers). Here's how it
works:
Platform Creation: Uber has developed a mobile app that serves as a
centralized platform where riders can request rides and drivers can accept
those requests.
Driver On boarding: Uber recruits drivers who own or lease vehicles to
provide transportation services. These drivers sign up with Uber and undergo
a vetting process that includes background checks, vehicle inspections, and
sometimes training.
Rider Interaction: Riders download the Uber app and create an account.
They use the app to request rides by entering their pickup and drop-off
locations. They can also see information about available drivers, estimated
fares, and estimated arrival times.
Matching Algorithm: When a rider requests a ride, Uber's platform
uses a matching algorithm to pair them with an available driver
nearby. The algorithm takes into account factors such as distance,
driver rating, and driver availability.
Trip Management: Once a driver accepts a ride request, the Uber app
provides them with navigation instructions to reach the rider's location.
The app also handles fare calculation and payment processing.
Ride Experience: The driver picks up the rider and transports them to
their destination. Both the rider and the driver can track the trip's
progress through the app.
Payment Processing: After the trip is completed, Uber handles the
payment processing. Riders' credit cards or other payment methods are
charged automatically, and drivers receive their earnings through the
Uber app.
Rating System: Both riders and drivers have the opportunity to rate
each other after the trip. This two-way rating system helps maintain
quality and safety standards on the platform.
Revenue Generation: Uber earns revenue by taking a commission
from each ride fare. The commission percentage varies by market but
typically ranges from 20% to 30%.
Continuous Improvement: Uber continually works on improving its
platform, adding features, enhancing safety measures, and expanding
its services to meet the needs of both riders and drivers.
 Types of Aggregators
Content: they aggregate news and updates from
several online sources.
Job: they aggregate job postings from various
career sites and employer listings.
Poll: they aggregate poll results conducted by
different organizations to estimate public opinion.
Real estate: they aggregate real estate listings
from several sources, making property details and
prices available.
Review: they aggregate reviews of the entertainment
business, such as books, games, TV shows, or films.
Search: they are the meta search engines that
aggregate results from many search engines.
Social network: they are websites that aggregate
content from various networking websites.
Shopping: they aggregate results from different
shopping engines, displaying price and rating
comparisons.
Video: they aggregate video content from several
websites and categorize them into lists.
 How does an Aggregator make money?
• The revenue streams of the aggregator are the
commissions.
• As the aggregator provides the customers to the partners,
then the partners pay a percentage of their earnings.
• For that, the partners quote a minimum price and the
aggregator will quote the total price to the final consumer.
• The revenue can vary according to the industry, but also
to the season, the place, etc.
 What is the Marketplace Business Model?

• The marketplace business model is a virtual space where buyers

and sellers can connect in order to buy and sell goods and
services.
• The marketplace does not own any inventories or play any role in the
actual fulfillment of the order.
• Even though the marketplace does not participate in order fulfillment,
it sets the ground rules which need to be followed while fulfilling the
orders.
• For instance, the modes of payment, the delivery times, the refund
policies, and other such important factors are decided by the online
marketplace.
 Marketplaces can be of several types:
•One popular way of classifying marketplaces is based on the
number of product categories which are available on the platform.
For example, a company like Amazon sells several types of
products in its marketplace. Such business models are referred to
as being global marketplaces.
•On the other hand, there are some other online marketplaces
where products related to only a single category are sold. These
types of marketplaces are called vertical marketplaces.
•There is a third category of companies that sells many products
which are related to each other or belong to similar categories.
Such a marketplace is called a horizontal marketplace.
 How Does It Work?
1. Understanding the Marketplace Model:
- At its core, a marketplace connects buyers and sellers,
facilitating transactions. Unlike traditional retail, where a
single entity (the retailer) sells products directly to
consumers, a marketplace acts as an intermediary.
- Buyers visit the marketplace to find products or services
they need, while sellers list their offerings on the platform.
- The marketplace provides a common space where buyers
and sellers can discover each other, negotiate terms, and
complete transactions.
- Examples: Amazon, eBay, Airbnb.
2. Key Components of a Marketplace:
- Inventory: Sellers upload their products or services to the platform.
This diverse inventory attracts buyers.
- Search and Discovery: Buyers search for specific items using
keywords or filters. The platform's algorithms recommend relevant
listings.
- Trust and Reputation Systems: Trust is crucial. Reviews, ratings, and
seller profiles help buyers make informed decisions.
- Transaction Management: The platform handles payments, order
processing, and dispute resolution.
- Pricing and Fees: Sellers pay a fee (often a percentage of the
transaction) to the platform.
- User Experience: Intuitive interfaces enhance user engagement.
3. Types of Marketplace Models:
- Product Marketplaces: These focus on physical or digital
goods. Examples include Amazon, Etsy, and Alibaba.
- Service Marketplaces: These connect buyers with
service providers. Think of Uber, TaskRabbit, or Fiverr.
- Peer-to-Peer (P2P) Marketplaces: Individuals transact
directly. Airbnb (for lodging) and eBay (for used items) fall
into this category.
- B2B Marketplaces: Businesses buy and sell among
themselves. Alibaba's B2B platform is a prime example.
4. Challenges and Considerations:
- Balancing Supply and Demand: Ensuring a healthy ratio
of buyers to sellers is critical.
- Quality Control: Maintaining consistent quality across
listings.
- Trust: Building trust between strangers is essential.
Reviews and verification processes help.
- Monetization: Choosing the right fee structure without
discouraging participation.
- Regulations: Compliance with local laws and regulations.
5. Examples:
- Airbnb: A P2P marketplace connecting travelers with
hosts who offer accommodations. Trust is built through
reviews and verified profiles.
- Etsy: A product marketplace for handmade, vintage, and
unique items. Sellers create their shops, and buyers
explore a wide range of products.
 SUBSCRIPTION BUSINESS MODEL

• A subscription business model is a recurring revenue

model in which customers pay a weekly, monthly, or
yearly fee in exchange for your products or services.
• The key thing to understand about subscription models is
that they are focused on customer retention over
customer acquisition.
•Rather than battling to acquire new customers every
single time you launch a new product, with subscribers
you’re simply trying to retain them.
•This is more cost effective and better for nurturing
long-lasting customer relationships that give you a steady
income stream.
 How a Subscription Model Works?
• Customers are charged on a recurring basis for a product or
service.
• They choose how long and how often they want to receive
each offer, and most subscriptions provide the option to
renew or cancel at any time.
• Subscription can be considered as a contract between Seller
and the customer. The customer agrees to pay for a product
or service for a period of time and the business fulfills that
offer so long as the customer completes their recurring
payments.
•When the contract is up, the customer has the option to
renew or cancel their subscription.
 What is a Peer to Peer Business Model?

• The peer-to-peer business model is a type of

business model in which technology is used to
connect multiple individuals to each other.
• The idea is that technology is used to connect different
people who belong to the same homogenous group.
• Since people belonging to the same group are called
peers, the technology is called peer-to-peer technology.
• The buyer and the seller are generally private individuals
who sell goods and services on their own.
Group Projects: Collaborating on group projects is another example
of P2P interaction. Students work together to research, plan, and
execute projects without direct involvement from teachers or external
parties.
Peer Editing: In writing classes, students can engage in peer editing
where they review and provide feedback on each other's essays or
assignments. This allows students to improve their writing skills
through constructive criticism from their peers.
• P2P lending (peer-to-peer lending) is a type of platform that allows participants
to borrow and lend sums of money without having to rely on a conventional
financial institution to control transactions.
• Also known as crowd lending or social lending, such a system connects
borrowers and lenders directly, usually through a website or an app.
• Peer-to-peer lending offers an alternative way to access funds without involving
traditional banks or financial institutions.
• It operates through online platforms that directly connect lenders and
borrowers.
• This lending method is particularly advantageous for individuals with poor credit
scores who struggle to secure funds through conventional channels.
• On the flip side, lenders seeking higher returns find P2P lending attractive
compared to traditional savings accounts or other investment options, despite
the increased risk.
 How Does P2P Lending Work?
•P2P lending is done through a website that connects borrowers
and lenders directly.
• Those who want to lend money, open an account with a P2P
platform as a lender.
•And those who require a loan register themselves as a borrower.
•They perform their checks, including the borrower’s employment,
income, credit history, etc.
• Not just that, using technology extensively, these platforms also
capture borrowers’ habits through social media activities, app
usage, etc.
•It serves as the basis for how much interest rate a borrower needs
to pay.
•The better the credit worthiness of a borrower, the lower the interest
rate for him. And the poorer the credit worthiness, the higher the
interest rate a borrower has to pay.
• Lenders can check this assessment done by the platform for
various borrowers and pick whom they want to lend their money as
per the risk they want to take and the return they want to earn.
Similarly, borrowers can also see the profile of lenders and reach out
to them.
•The P2P platforms do not keep a margin from the monthly
installments or transactions between the lender and the borrower.
• Instead, they charge a fee from both for the services that they
provide.
• To make sure that the platforms don’t do anything fishy or fraudulent,
like holding on to money invested by the lenders or money paid back
by borrowers, RBI regulates these platforms.
 How Is P2P Lending Regulated In India?
•Since P2P lending is a form of well, lending, it comes
under the Reserve Bank of India (RBI). RBI has set
guidelines around how P2P lending platforms need to
work.
•For instance, any company which wants to offer P2P
lending services need to register for an NBFC-P2P
( Non-Banking Financial Company Peer-to-Peer Lending)
license from the RBI.
•As the regulator, RBI also ensures that there is no
significant systemic risk in these platforms.
• As per RBI regulations, if a P2P platform decides
to shut down, then the company’s board will act
according to a pre-decided Business Continuity
Plan.
• The plan has all the details to keep the information
of all lenders and borrowers safe.
• P2P lending investment is not entirely risk-free.
 Challenges
•Although P2P lending can be a boon to both borrowers and lenders, the
websites that offer it vary in their details, such as interest rates and
transaction fees.
• Investors and consumers are advised to comparison shop to find the
best P2P offering for their specific needs.
•P2P lending can also be unsafe if carried out poorly. Novice P2P
lenders should be conservative with their investments and diversify
amongst multiple borrowers.
•Critics of the model warn that it could potentially precipitate another
event like the subprime mortgage crisis, because data shows that the
P2P loans resemble the predatory loans of the mortgage crisis, showing
increased negative effects on borrower finances.
 Benefits
•The main benefit of using P2P lending is that it provides the potential
to get better rates than are possible when using a bank to distribute
or receive loans.
•P2P lending can make access to loans possible for people who
would not be able to get a loan from a traditional financial institution.
P2P lending websites help consumers consolidate debt for a lower
interest rate and often offer attractive interest rates for home and auto
loans.
•The model can also help entrepreneurs get
small-business startups off the ground, while making it possible for
lenders to invest in the company.
•Borrowing through a P2P platform also offers the user an efficient
online experience.
Popular Platforms
Loop – Offers small business loans.
Prosper – Offers personal loans.
Lending Club – Offers both personal and business loans.
Peerform – Offers personal loans.
Upstart – Offers personal loans.
StreetShares – Offers small business loans.
SoFi – Offers student loan refinancing and personal
loans.
 Crowdsourcing
Crowdsourcing is the practice of turning to a body of people
to obtain needed knowledge, goods or services.
The term crowdsourcing is a combination of crowds
and outsourcing and was coined in 2006 by Wired magazine
author Jeff Howe in his article "The Rise of Crowdsourcing.“
• Crowdsourcing is a practice that seeks knowledge, value,
goods or services from a crowd with skills suited for the
aim of the project.
• The crowd often works on a voluntary or paid basis.
• The companies invite participants irrespective of their
educational experience or background.
• The objective of any crowdsourcing project is to use the
wisdom of a large group to achieve a common goal.
• The practice helps organisations collect new insights, gain
monetary value, create a new product, streamline
elaborate processes or generate marketing content.
 How Does Crowdsourcing Work?
1. Define the objective
•It is essential to define the objective of the crowdsourcing
activity.
•Companies may crowdsource data collection, marketing
research or even develop a new product.
• Defining the tasks and objectives helps streamline the
process and increase its efficiency.
• The company sets up systems to track and monitor the
inflow of crowdsourced work.
 2. Identify the crowd to source it
•The people identified for the work are unaware of the tasks
performed by other members.
• Companies use several digital spaces such as social
media platforms, dedicated crowdsourcing platforms and
even their website to increase awareness about their
requirement and encourage the audience to take part.
Several industry-specific micro-labour sites attract
individuals with specialised skills.
• Companies with clearly defined crowdsourcing objectives
may use these platforms to complete tasks or resolve
issues.
 3. Delegate the microtasks
• Once an organisation identifies their audience to
crowdsource the work, they assign the project or
micro-tasks.
• The company monitors the delegated tasks.
• They check the quality and use the insights
derived from the activity to make business
decisions.
 TYPES OF CROWDSOURCING
1. Solution-focused crowdsourcing
•A company may often crowdsource to solve a complex problem.
• They may seek solutions from specialised groups or micro-labour
sites.
•Anyone from around the globe may attempt to resolve the issue.
• Sometimes, it starts a conversation on the internet and several
people get involved to find a solution.
•An advantage of such crowdsourcing is that it helps find an expert to
fix the issue.
•The company spends very little resources to use the knowledge of a
crowd.
For example, a company trying to find a sustainable solution to
apparel packaging may ask a crowd through social media or other
channels for solutions.
 Crowdsourcing for content
• The creativity of the audience to create a new logo,
packaging design or even create content for social media.
• The brand may or may not provide an incentive to the
audience.
• The content made by people may go through quality
checks to match the brand guidelines before being used.
For example, a food and beverage company introducing a
new line of products may use social media to encourage
its audience to design the packaging for the product. The
company may incentivise the process by offering a cash
price to ensure maximum participation.
 Crowd voting
• To improve products, companies often gain feedback from
their customers.
• It may be through emails, flyers or surveys.
• Many companies set up businesses that run solely on user
opinions.
• User experiences shared on websites help other users
make informed decisions or form opinions about a product
or service.
 Software crowdsourcing
• Software crowdsourcing is a process where a
company involves people in all stages of
software development, including documentation,
design, coding and testing.
• Companies may organise competitions to
encourage participation. Some may use this as
an opportunity to speed the development
process or even recruit new talent.
Crowdsourcing for product testing
•Helps collect audience feedback before the official launch.
• It helps companies identify bugs in usability and
understand how well a product may get accepted in the
market.
• Companies that develop mobile applications may release a
beta version to a restricted crowd to test it.
•Companies may examine a product in specific locations like
schools, corporate offices or even specific residential areas.
 Crowdsourcing for customer support
• Companies open moderated forums or groups to
address customer queries.
• It provides a platform for anyone to write a
question and answer them.
• Companies address all customer queries without
spending too many hours.
• Subject matter experts or brand advocates often
answer the queries in such forums, and
companies may validate it.
Crowdfunding
• Crowdfunding is a type of crowdsourcing that focuses on
raising funds.
• Startups with a product prototype or non-profit
organisations seeking funds for their cause often use
crowdfunding to raise money.
• The process collects small amounts of money from people
to serve a cause.
•For example, Kickstarter is a dedicated crowdfunding
platform for startups to raise funds for their products.
Similarly, Ketto helps raise funds for those who cannot
afford healthcare expenses.
Implicit crowdsourcing
• Implicit crowdsourcing happens when users unknowingly
contribute towards a cause.
• Companies collect data that benefits a different cause.
• For example, search engines use small image-based
puzzles to improve their image search results.
• They may track user location to improve the global
positioning system (GPS) used during navigation. Data
collected in this method is popular in machine learning
applications to improve efficiency.
 Benefits Of Crowdsourcing
Increased diversity
An organisation gains varied perspectives, knowledge, experience and
expertise. It helps take a holistic approach to the problem and devise a
solution.
Reduced costs
Crowdsourcing is a lucrative option for companies to collect data or
perform specialised tasks. Companies do not hire people but provide a
one-time reward to people in the crowdsourcing activity.
Increased brand engagement
Brands release marketing campaigns to increase brand engagement in
a crowdsourcing activity. They make the process competitive to
encourage participation.
Faster problem solving
Crowdsourcing enables companies to access the best ideas from
across the country or globe. The process is quick, and companies
can set their deadlines to receive the ideas.
Collect customer data
The audience submits their information to the company. It helps
businesses understand the audience demographic that interacts with
the brand, the suitable communication channels and deeper
behavioural insights.
Retain control
While crowdsourcing raises concerns over intellectual property rights
and confidentiality, it is a process that allows companies to retain as
much control as they wish.
LEGO
LEGO established the LEGO Ideas platform, where users can submit their ideas for new LEGO sets.
Consumers are also able to vote and offer feedback for ideas submitted. Any idea that has received
over 10,000 votes is reviewed by LEGO. If a submitter’s idea is selected, he gets to work with the
LEGO team to make his idea a reality and also gets royalties on sales. The platform not only supports
new idea generation, but it also enables LEGO to validate a demand for such ideas. One of the most
notable sets to date is the Beatles “Yellow Submarine” set.
PepsiCo
PepsiCo occasionally solicits input from consumers on varying products, such as the time they asked
customers to share their favorite new potato chip flavor for the company’s Lay’s brand. This ‘Do Us a
Flavor’ campaign debuted in 2012 after the market share started to decline among the millennial crowd.
An astonishing 14 million submissions were raked in. The winner? Cheesy Garlic Bread. An 8%
increase in sales followed this clever crowdsourcing innovation campaign.
 PEER-TO-PEER (P2P) EXCHANGES
•Imagine a world where you can trade, lend, and transact
directly with others without the need for big banks or
traditional financial middlemen. That’s the magic
of Peer-to-Peer (P2P) Exchanges!

•They’re like the superheroes of online platforms, bringing

people together to trade and do business without any
middlemen getting in the way.
•Like you want to swap or do a deal with someone directly.
•These platforms also cover a bunch of other money-related
activities.
Cryptocurrency is digital money that doesn't require a bank or financial institution
to verify transactions and can be used for purchases or as an investment.
Bitcoin (BTC) ...
Ethereum (ETH) ...
Tether (USDT) ...
Ripple (XRP) ...
US Dollar Coin (USDC) ...
Solana (SOL) ...
Cardano (ADA) ...
Tron (TRX)
Breaking Down P2P Exchanges and How They Roll:
Direct Transactions:
P2P exchanges are like matchmakers for buyers and sellers. Imagine
you want a specific crypto currency or some digital asset. With P2P,
you can connect directly with someone selling it. It’s like having full
control over your deals!
Decentralization:
Transactions are super safe, transparent, and resistant to anyone
trying to mess with them. Think of the block chain like an unbreakable
diary of everything that happens.
Regulatory Considerations:
Just a heads up – the rules for P2P exchanges change depending on
where you are. Some places love them, others have a few rules to
keep things in check. It’s a bit like each region having its own set of
trading cards.
Diverse Asset Trading:
These exchanges aren’t just for crypto. You can trade all sorts of stuff –
not just digital money but real things like houses, stocks, and even
digital treasures. It’s like a marketplace for everything!
P2P Lending:
Beyond trading, P2P exchanges are also lending hubs. You can lend
your money and earn interest or borrow from others, all without dealing
with those big, traditional lending hubs.
User Autonomy:
P2P exchanges are like giving you the keys to your financial kingdom.
You set the rules – your prices, your partners, and how you manage
your assets. No need for someone else to do it for you!
 THE KEY FACTORS FOR A SUCCESSFUL STARTUP

1. The idea
• The strength of the founder's idea might seem to be the
biggest factor responsible for a business's success, but
it's really only a small element of how things might turn
out. Consider Google, whose core idea of an interactive
web search was, at its start, already being implemented
by dozens of competitors.
• But because Google's founders' plan, execution and
timing were superior, their lack of originality didn't cripple
their chances of success.
 2. The leader(s)
• Leadership is important in startups.
• Leaders make the decisions, set the vision and inspire
people to work harder for a group's goals.
• Put an incompetent leader in place, and not only will
high-level decisions be made less effectively, but the
morale of the group could be put in jeopardy.
•On the other hand, a skilled and experienced leader
can turn even a weak idea into a successful one.
3. The team
Entrepreneurs are important, but they rarely
accomplish great things alone. Successful
businesses employ anywhere from a handful to
hundreds of people, and those people will be the
ones maintaining the business, driving innovation
and executing your high-level goals. Hire the right
people for the job, and you'll never have a
problem. Hire the wrong people and your best-laid
plans might be ruined.
4. The capital
Working capital is important; so are your early
stages of funding. Don't panic if you can't find an
investor -- personal and familial investments are
possibilities. And don't rule out the possibility of
opening a line of credit. Once credit is secured,
remember to keep an eye on your cash flow: One
wrong move here could put your cash into
negative territory.
5. The plan
The plan has to involve more than just your core
idea. It includes your goals, your targets, your
operations and more. Everything written down in
your business plan counts as part of your "plan,"
and the degree to which you researched and
fine-tuned your plan will greatly affect your chances
of eventual success. The more thorough you are
here, the better.
 6. The execution
• That being said, a plan is only as valuable as its
ability to be executed.
• If you have a great plan, but fail its execution, your
entire enterprise could be compromised.
• On the other hand, if you have an adequate plan
and execute it perfectly, you'll have a solid leg to
stand on and a key understanding of what did and
didn't work from your original concept.
 7. The timing
• Timing is important from a competitive perspective, and it's
led many businesses to prominence despite a chaotic and
busy market at their time of entry.
• When YouTube came on the scene, for example, there
were already dozens of video-streaming platforms.
• But because YouTube launched at a critical moment --
after high-speed Internet became the norm but before any
other streaming service had risen to prominence -- it
enjoyed radical early success.
8. The crisis response
No matter how well you plan or how hard you
work, something is going to go wrong. How you
respond to a crisis is far more important than how
likely you are to avoid one. One poorly treated
crisis is all it takes to put a company under, so
think carefully about your response plan.
9. The marketing
How you package and market your business
matters. An inferior product that's branded in a
more appealing, exciting, and unique way will
always outsell its superior product that happens to
have plain, non-memorable branding. This point
may seem superfluous, but it critically affects
customers' buying decisions.
 10. The growth
•Grow too fast and you'll stretch yourself thin.
• Grow too slowly and you'll never get anywhere. So, find a
balance, and treat your growth carefully.
•If you look at each of these factors objectively and can say
that your business meets or exceeds their demands,
chances are you're already primed for success.
• If you notice any one of these factors as being weaker
than the other, you'll have the cue you need to invest more
time and resources into that weakness, to overcome it.
 STRATEGIES FOR SCALING AND GROWTH

The terms “growth” and “scale” are often used interchangeably.

While the two are related, they have distinct differences.

Growth refers to increasing revenue at the same rate that a

business adds resources—such as new team members, technology,
and capital, to name a few. On the other hand, scaling is when an
organization identifies ways to grow more efficiently, resulting in
revenue growth at a substantially greater rate than increases in
resources and expenses.
Scaling a business requires thoughtful, strategic planning. According
to data from McKinsey, only 22% of new businesses launched in the
past decade have successfully scaled.
Move to the next round of funding
If your startup has followed the traditional series of funding thus
far, it may be time to move on and seek your next round of
funding. Prepare by creating a clear and concise pitch deck and
get your financial statements and other related documentation in
order. You can expect to face tough questions from investors
who are going to want a return on their money. However, don't
just tell investors what they want to hear. Make sure you are
honest about your plans for expansion, any current or future
profitability, and when investors can expect to get a return on
their investment.
Invest in technology
Improving current technology offering, or transitioning to a
more modern and scalable IT infrastructure you can serve
your customers more effectively.
If you scale successfully you can expect more users and
traffic, and with that comes more stress on your current IT
system. Having a robust and reliable infrastructure in
place will help retain existing customers and clients while
attracting new ones.
Deploy a new marketing strategy
One of the most effective strategies of how to scale up a startup is to
tell more people about it! Creating a fresh, bold, and impactful
marketing campaign can transform your business overnight. Thanks
to the viral nature of social media, one video can drastically impact
the number of sales and orders you receive. Do your own research
on what type of marketing strategy would be the best fit for your
startup. Some popular options are:
creating engaging and valuable content;
paid advertisement;
video blogs and guides;
email marketing;
direct marketing.
Launch an associated product and service
To facilitate the growth of startup, can launch a complimentary
product or service that will expand your business offerings, an
example. Imagine Startup has created a tool that accepts PDF files
and creates a dynamic interactive report based on the contents of
that PDF. To scale, decide to invest further in business and expand
the current tool to accept .doc (Microsoft Word) files. This sounds
obvious and simple, but you can be sure your team will face many
challenges in developing, testing, and supporting this new version
of the tool. Each challenge that arises will usually cost you some
time, money, or both. However, this investment means your tool will
now be of interest to many potential future customers.
Reflect on Current Processes
One innovative and cost-effective strategy you can use to scale is to
reflect on your current business processes and identify what
practices are inefficient and causing your business to stagnate.
When looking to scale your startup quickly, it is tempting to look to
external resources such as new hires or new clients that will cause
the output of your business to increase. It is estimated that having
inefficient processes can cost your business between 20-30% of its
revenue annually. Imagine if you had this money available to reinvest
into your startup, and the resulting growth you would experience. As
a modern, lean startup you should be obsessed with automation.
Consider Hiring experienced management
Seeking outside help in the form of an experienced, more objective
management professional can be beneficial for your startup.
The manager will be able to deal with a stressful situation more
calmly, as they have less of a personal stake in the business. Heavily
invested in startup may cause to make bad decisions. Having an
experienced manager in your corner, especially one with previous
experience in successfully scaling startups, can transform business
into a more robust and organized company.
Make the startup run without you
The ultimate goal of any startup is to become a reputable,
successful, and sustainable business for years to come. As the
leader of your business, you have a responsibility to ensure the
business can run smoothly in your absence. If you sold your
startup and were no longer in charge of the day-to-day
operations, would your startup survive without you? If you
answered “no” to this question, you should begin work
immediately on distributing your various roles and
responsibilities across your company. This will likely involve
hiring new talent to manage the increased workload.
This transition and relinquishment of control, no matter how
painful it may be at the time, will make your startup much more
agile and resilient to market changes. It also has the added
benefit of taking work off of your plate.