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Five Tech Startups Business Models Explained

A business model is a crucial part of the life of any business. In fact, although there are many ways of monetizing.

A business model isn’t only about monetization. Instead, that is more about the overall value unlocked by the business and how it affects several stakeholders.

In fact, if we look at most of the companies that have been wildly successful in the last decades (Microsoft, Apple, Google, and Facebook), those companies were able to involve several players before being able to scale up.

For instance, Google before becoming wildly profitable spent some time tinkering with several monetizations strategy before coming up with its advertising networks which involved three main players as explained here.

In this article, we’ll look at five companies’ business models:

Quora and the content value matrix

Quora recently started to monetize the platform by testing an advertising program that allows publisher and businesses to add their product or service to Quora’s feed with a text ad.

The company has been very successful in building a trusted platform where users post any question, asked by committed non-professional writers.

Besides, on Quora often famous writers and authors host Q&A sessions that make the platform even more engaging.

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Quora is among the most popular Q&A platforms, where people can post questions and get answers to any question. Quora is also a great content marketing platform, where it’s possible, with the right strategy to amplify your content and build a strong brand and convert traffic in potential customers.

Wolfram Alpha: the smartest engine around (so far)

Wolfram Alpha is the search engine created by a former physicist turned a successful entrepreneur: Stephen Wolfram.

Today, Wolfram Alpha, a computational engine is the smartest engine around. Its business model is based on subscriptions, APIs, and applications.

As Google is getting smarter and smarter from a computational standpoint, one might wonder whether Wolfram Alpha will lose competitiveness over time.

And by the way, if you thought you didn’t know Wolfram Alpha, most probably you’re wrong. In fact, Wolfram Alpha powers some queries of the iPhone’s voice assistant, Siri.

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Airbnb: disrupt modern hospitality to go back to the old days

When Airbnb came into the hospitality industry a few years back.

Few players realized how disruptive it was until it was too late for stopping its growth.

Today Airbnb is one of the wildest tech successes of the last decade, based on a simple business model, which relies on the trust between guests and hosts.

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In 2021, Airbnb generated enabled $46.9 Billion in Gross Booking Value, and it generated $6 Billion in service fee revenues. In 2021, there were $300.6 Million Nights and Experiences Booked, ad an average service fee of 12.78%, at an Average Value per Booking, of $155.94.

Also, over the year as quality pictures have become an essential aspect of Airbnb’s growth, the company started to work regularly with a freelance that would take photos of hosts’ accommodations for free so that the listing could be more appealing to guests.

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Airbnb is a platform business model making money by charging guests a service fee between 5% and 15% of the reservation, while the commission from hosts is generally 3%. For instance, on a $100 booking per night set by a host, Airbnb might make as much as $15, split between host and guest fees.

DuckDuckGo: where Google loses DuckDuckGo wins

DuckDuckGo is a search engine that doesn’t track its users. In short, it gathers the data that might be useful to offer a localized search, but it throws it away on the fly.

Thus, Google mainly monetizes thanks to the information, it gathered from users. DuckDuckGo does the opposite.

It allows its users to rely on a private navigation experience; while it monetizes mainly through localized keywords and affiliate earnings.

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DuckDuckGo makes money in two simple ways: Advertising and Affiliate Marketing. Advertising is shown based on the keywords typed into the search box. Affiliate revenues come from Amazon and eBay affiliate programs. When users buy after getting on those sites through DuckDuckGo the company collects a small commission.

LinkedIn: the multi-sided platform where hunters and hunted grow together

LinkedIn is the most significant professional network on earth and also one of the most engaging social networks as of the time of this writing.

The value of the platform comes from its multi-sided customer focus. In fact, LinkedIn, on the one hand, offers services to HR professionals that allow them to find the right fit for the open positions.

At the same time, LinkedIn offers its users a learning platform useful to bridge the gap with the professional world. Thus, making the platform more valuable for those HR professionals.

LinkedIn is part of Microsoft’s business model.

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Microsoft has a diversified business model, spanning from Office to gaming (with Xbox), LinkedIn, search (with Bing), and enterprise services (with GitHub). In 2021, Microsoft made over $168 billion in revenues, of which over $52 billion came from Server products and cloud services and $39.8 billion came from Office products and cloud services. Windows generated over $23 billion, Gaming generated over $15 billion, LinkedIn over $10 billion, and search advertising (through Bing) over $8.5 billion.

ReadBusiness Strategy: Definition, Examples, And Case Studies

More business models?

Tell us in the comments below which business models you’re curious to hear about! In the meanwhile the list of some of the business model types I identified throughout my research:

And those among the most successful companies:

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