Understanding Business Model Archetypes

Business model archetypes were introduced to the market after discovering that a business needs more than a business model. While a business models seeks to describe concisely the functions of an organization, within its market landscape, product managers need something that is more compact so that they can get immediate results that can be used to make the business better. Nowadays there are numerous business models that companies use. These however do not articulate clearly the functions as well as the contact of their business in the overall market which led to the development of the model archetypes were introduced.

Business model archetypes are a concept that was derived from Carl Jung’s work a 20th century psychiatrist who suggested that there were some fundamental personality templates where attributes are inherited and combined to create an individual’s personalities. He believed that understanding the templates could help a person better understand their personality, as well as predicts some of their responses to a number of stimuli. He referred to this as personality archetypes. His concept was not only relevant to personality as it could also be used for business offering the ideal structural base that can be used to identify spectrum of the various possible templates.

Generally, business model archetypes work on the fact that there are 3 primary personalities that are normally uses to describe the fundamental business activities and interests. Just like the color wheel works, 3 secondary archetypes are also derived from the primary ones as seen below.

Primary

Product: One- time buying of an item.

Service-: Charging a fee or manually doing something.

Trade: Connecting sellers and buyers for the sake of commerce.

Secondary

Brokerage: Offering trade like a service.

Subscription: Semi-automating and productizing a certain service.

Marketplace: Using a self- service platform to productize trade.

Eco-system: Combines the above three as it platforms other build business that are around.

The 7 (primary +secondary) business model archetypes are considered high level abstractions that can be used to describe basic truths about the categories of a business. This comes in handy for a business that is looking to identify a generalized content that will be used to determine where its efforts should be focused on the spectrum of possibilities. This is usually not specific enough to warrant action. Keep in mind that for this to be possible 2 prototypes are added to the model archetypes. A prototype can be described as something that is more functional and specific, a demonstration of everything possible within an archetype.

The most important point here however is spend some time doing the analysis that will help you get to the bottom of what the primary function of the business is. At this point, the archetype are very useful as they helps to provide a conceptual framework that can help you identify all the possible opportunities that you may have not thought of. At the end of it all, product managers need to articulate clearly the foundational strategy of the business to understand their expansion, context and pivot options. This can be done using the business model archetypes to help achieve business goals.

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Mark Silver
Mark is the Lead Author & Editor of Spectechular Blog. Mark established the Spectechular blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to Product Management.
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