4.1 Archetypal ways to benefit from anti-rivalry in business models
In the ATARCA project, we have conducted research that addresses the topic of anti-rival business model design to help overcome the paradox of anti-rivalry–and benefit from it. In our systematic reviews of existing business model innovation literature, we have been able to find four prevalent approaches to anti-rival business.
1. Building community network effects and decentralizing rival costs
The approach of building community network effects and decentralizing rival costs refers to increasing the size of the community using anti-rival goods and spreading out the costs associated with producing and distributing the goods. The latter, in particular, can be achieved through various mechanisms, such as decentralized production, open-source technology, or shared infrastructure.
Example: Seed&Spark–a crowdsourced film & TV studio–helps creators build audiences through crowdfunding and crowdsourced innovation. Audiences can watch movies & shows through on-demand streaming. Seed & Spark maximizes sharing of movie ideas and experiences, while decentralizing production and maintenance costs.
2. Subsidizing sharing-related costs
The approach “subsidizing sharing-related costs” points to leveraging anti-rival goods by sponsoring the costs associated with sharing the good and encouraging more people to share it.
In many cases, the total costs associated with sharing anti-rival goods can be significant, such as the cost of sharing infrastructure. By subsidizing these costs, businesses can make it easier and more attractive for people to share the good, which then helps company’s business model, e.g., through gathering data about sharing or monetizing the (social) networks that sharing creates.
Example: Linkedin–the world’s most prominent work-related social media–provides infrastructure for professionals to connect. Linkedin monetizes the system through recruitment, advertising, and other services. Linkedin maximizes the sharing of work-related content, links, and memes. The costs are subsidized with revenue coming from services offered based on the intelligence gathered from the network.
3. Shifting the revenue focus from rival resource usage to anti-rival results
Shifting the revenue focus from rival resource usage to anti-rival results -approach takes benefit of anti-rival goods by focusing on the outcomes and results that are achieved through the increased using and sharing of the good, rather than the focusing on transactional relationships.
In traditional business models for rival goods, the revenue is generated by charging for the usage of the good, such as selling access to software, music, or other digital content. By shifting the focus to the results achieved through the use of the good, businesses can create new revenue streams that are more fairly divided among all the stakeholders, and more aligned with the nature of anti-rival goods.
Example: Mixcloud is an online music streaming service that allows for the listening and distributing radio shows, DJ mixes, and podcasts, which the registered users crowdsource. The business model is based on revenue sharing. Sharing of mixtapes is maximized to create optimal revenue for everyone.
4. Creating parallel offerings
Creating parallel offerings refers to creating new revenue streams by providing complementary products and services to anti-rival goods without artificially limiting their sharing. This builds also positive brand image and foster a sense of community among the user community. Such an approach is widespread in open-source software context, but also appears elsewhere.
Example: The Guardian is a reader-funded news organization, which relies on the reader’s generosity. In 2020, more than 1.5 million readers-supported Guardian financially. The outlet is available for everyone for free, but as a paid customer, you get certain unique features.
