Startup quiz: Spot the innovation!
Designing an innovative business model is the subject of a new course at the University of Toronto’s School of Continuing Studies, in partnership with MaRS.
Facebook, Airbnb, Uber, Lending Club. What do they have in common?
A lot of things actually. But I’d like to focus on three commonalities:
- They are young companies. Founded in 2004, Facebook is the oldest of the bunch
- Despite their young age, they are all known as “unicorns”*—impactful startups valued at more than US$1 billion. This is all the more impressive given commonality #3, which is that
- They don’t own any assets in the industry in which they operate. Consider:
- Facebook is the world’s largest media company, but doesn’t own content
- Airbnb is the world’s largest hotel chain, but doesn’t own any hotels
- Uber is the world’s largest taxi company, but doesn’t own any taxis
- Lending Club is a very successful loan provider, but doesn’t actually have any money
These are not the only companies that share these characteristics, and perhaps we shouldn’t be surprised that these network companies have emerged in the decade after the dot-com boom, when the promise of internet-enabled businesses got a lot of people a bit too excited.
The reason this new generation of companies is successful is that they have been able to design and scale profitable and sustainable business models that are superior to those of possible competitors.
The success of these companies shows that innovation at a business-model level can be just as powerful as inventing a new technology product.
Do you have an innovative business model?
Designing an innovative business model is the subject of a course I’ll be teaching starting January 13 and running for five weeks at the University of Toronto’s School of Continuing Studies, in partnership with MaRS.
The course, SCS 2929 Building a Business Model and Plan, which is part of the Certificate in Entrepreneurship, is created to help entrepreneurs find the best way to scale and grow their business. Participating entrepreneurs will spend significant parts of the course learning about innovative business models and applying those concepts to their own business idea. The goal is that participants will leave the course with both a solid business model and a process for implementing it in the market.
*In startup circles, the word “unicorn” refers to startup ventures valued at more than US$ 1 billion. It was originally coined by Aileen Lee, founder of Cowboy Ventures, to describe a set of startups that had a big impact and achieved something that was difficult, rare and unstudied.
In her latest blog on unicorns, Lee’s analysis yielded 84 such unicorns founded after 2003. Among those unicorns are a number of companies I find fascinating, not just for what they have achieved, but for how they have achieved it.