Hi, everyone. Welcome to the Daily Dose podcast. This is the podcast where we pick out things from the news and social media that’s interesting to us as entrepreneurs and as business nerds. I’m James and I’m joined by my co-host, Marcella. Hi, James. Hi, myself. So I have seen quite a few things flyback offers on Twitter this week. So I picked up a couple of these that caught my eye. First up was a tweet from a guy called Sam Shetler, and he was talking about the pros and cons of different business models and how you can actually combine business models to help mitigate some of those problems. So his tweet says. He was replying to a different tweet that says digital products suffer from piracy and unpredictable revenue agencies have high marginal costs. Most sites, businesses have no might pick your pain. And then Sam replies with every business model, has its pros and cons. Combine them when possible. So what he’s talking about here is that. The delivery mode or the service or the thing that you’re offering can have a big impact on. What competition there is in that model and also what some of the other pros and cons are with, i.e. what your customers are gonna be doing, how you acquire your customers in the first place and things like that. So he particularly mentions digital products. Now, obviously, in today’s modern age, starting with Napster and then going onto BitTorrent and all these other various things, Megaupload, Kim Dotcom. You are very susceptible to having whatever it is that you produce can be grabbed by someone else I just distributed through one of these other sort of black markets, inverted commas. And so you really have to try hard to find ways of adding value and otherwise other than just the thing that’s being downloaded. So that you move as a music of really struggle with this in recently is. And. You know, the way that they’ve tried to approach doing that is through the aggregation of value add side of things. So the people who are really going great guns on video, digital content and who are doing music really well have doubled down on convenience. So, for example, Spotify, you pay one relatively low monthly costs and you get all the music, which is great for convenience. You just you can go away. It just goes on your credit card or debit card, whatever it might be. And, you know, you can have the music, same thing like Netflix or Apple TV. Again, it’s like a pretty painless monthly payment. And you get all of your TV, all of your films, all of your kind of stuff. So as a smaller business, obviously, we are not Spotfire and we are not Netflix. You know, if if we have a digital product or if we’re running an agency so that people with agent agencies as high marginal costs are going to pay for people, you got to there’s a relatively high price sales process, things like that. If you’re operating a software as a service. The big problem is, is that it’s relatively easy to replicate your product. So if you come up with some cunning new software as a service software product, all it needs is someone with a bit of cash and some access to some reasonable developers, and they can quite quickly clone and copy your product to the way you go. So these aren’t SAS, but the classic example of this is Facebook basically just stealing every single thing that SNAP ever did on their products. They just integrate that straight into Instagram and then that becomes, you know, copycat essentially. And so what he’s saying here is, is like can you find ways of combining these different business models so that they, the pros and cons like balance each other out as you go around the size? Have you got any thoughts on this?
Yeah, sure. So I think the best prediction for any company is to create the brand or in other way build an audience. But they’re both correlated, so are intertwined. So creating a brand, I mean, people that just stand for your brand is the most important thing. Then you can try out yet different business models. So, for instance, Apple has a very strong brand and that’s highly valued. And then they can go try out. They do hardware, they sell the iPhone on iPods and so on. But they also in the software business because of that of the App Store or Apple TV, also for bodies of service. And yet so much more. They also produce their own so far. So, yeah, they have a subscription, business models, hardware, services. So but bedding down. It’s the Apple brand. And on any lie, anyone you follow on YouTube or or elsewhere, it’s important what they say or what they stand for and what they recommend or rather done is more important, the brand and the people behind the brand than the business model itself. So if you are on business as well, if it’s a B2B business, for example, they will buy you how you treat them, your responsiveness, your price, maybe whatever it is. So. So they like to work with you. So saying if you are a B2C business to consumer brand, your audience will value your messages. You know, your way of thinking, your stance on being critical of things and maybe, maybe, hopefully your products and services. So because yeah. Combining the different business models is. Yeah. I want to go but it’s difficult. Also you will. It’s not that simple and they’re very different actually. So something that walks us by now further it may not work as a subscription. So usually subscription to offer a subscription you need especially on the Internet. You need to produce vast content. Or or give some access to certain. Yeah. Could be a community or or some added value, as you said. So add more value, either convenience, YouTube, you know, vast resources or quality resources.
Yeah. Concentrated into one subscription or logging. Plus access. Yeah. To maybe a network for instance. Also Disney. They face this competition from Netflix, but they have a strong brand because they produce quality content. So they stand for that. They always kept that high standard of content. You know, we called Marvel as well. It’s like they keep doing every year or so great movies, but with these same themes. But it’s a brand legitimately. Yeah.
They create havoc and they’re quite happy to invest quite heavily in proven IP and brand. So, you know, so they bought Pixar and they bought Marvel. So, you know, they never lost Star Wars. So they’re stacking those intangibles on top of each other.
Exactly. Yes. So it’s so you can double down on brands because it’s safer, Don, trying different business models. And it’s easier for you as entrepreneur to create the brand or, you know, a person brand than trying out too many brothertown services. So broadly that that my recommendation would be build a brand.
And then if you have an audience on a proven business model, then try out alternatives just to mitigate your risk. Yeah. But yeah. Prioritise your audience. Listen to them. Learn from them. Yeah. Go for it.