asymmetric-business-models

Asymmetric Business Models In A Nutshell

In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users‘ data, combined with its algorithms sold to advertisers for visibility.

Asymmetric business models explained

googles-business-model
facebook-business-model
Facebook is an attention-based business model. As such, its algorithms condense the attention of over 2.4 billion users as of June 2019. Facebook advertising revenues accounted for $31.9 billion or 98.66% of its total revenues. Facebook Inc. has a product portfolio made of Instagram, Messenger, WhatsApp, and Oculus.

A couple of core examples of asymmetric business models that are easier to understand as those are companies we all know are Google and Facebook.

Both are attention-based models, where users‘ data get sold to advertisers. It’s important to highlight that it isn’t necessarily the data which is sold directly but rather how the data is refined by those companies search algorithms (for Google) and social graph algorithms (for Facebook), repackaged and sold to advertisers.

The key point is not about the advertising business model but rather how monetization happens. In an asymmetric model user and customers are two different people.

The user is the most valuable stakeholder as it provides the data which gets used to refine the core asset of the company. Combined with technology that is how the core asset is sold to a key customer.

To go back to Google’s example, users search through Google providing valuable search intent data, but also behavioral data. When this gets refined by Google’s algorithms that is when the core asset becomes monetizable, as it gets sustained by the advertising revenues paid by customers paying for visibility on the platform.

Other asymmetric business models examples

In general, business models where the user and customer are not the same people can be classified as asymmetric.

Therefore the attention generated by the free service or product gets monetized indirectly. Google and Facebook are classic examples. Other platforms like Netflix simply monetize their users‘ data by providing them with a subscription service, thus this is an asymmetric model where user/customer matches.

Asymmetric business models if used properly can scale quickly, however, those are also usually built on large numbers.

Examples of asymmetric business models:

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here