Innovative Business Models Leveraging Local Factors

February 8, 2013 11:13 am

Innovative Business Models are interesting to spot. We’ll start with an example: In India, both receiving SMS, and all inbound calls are free for the consumer. Now this is a local factor, that many companies have leveraged. But this company called mGinger made a cool business out of it (and investments from DFJ and IndoUS as well). What is mGinger? Simply put, users register their mobile numbers with some details and ‘allow’ mGinger to send them advertisements, in exchange for monetary benefits. Since the carrier does not charge them for receiving SMS, it is effectively free money for them. And since mGinger gathers some information when you register, it is able to do ‘targeting’ on its ads – enough of a selling point for ‘spread-the-message’ advertisers. Add the capability to measure the effectiveness, and you got a new business model!

This innovation was clearly possible, due to a local factor, that receiving SMS was free. So the ‘What is in it for me’ was easy to solve – earn money by receiving SMS !

Do you know of other such innovative business models, that leverage any such local factor?

(We had written about India’s missed call economy, for example).

We also made this thought into a heuristic to solve the chicken-egg problems faced by startups – the ‘I wouldn’t mind heuristic’ – the basic idea being this: look for areas where the consumer is paying nothing, or is already paying for something, and tell him he can actually make money out of that activity. In the example we just described, the consumer was paying nothing for receiving SMS messages. So when you tell him he can make money for doing that, ‘he wouldn’t mind’ doing that, with a positive bend – the possibility of making money. Add that reaction up across an entire population, and you have a very feasible idea in your hands.

Such local factors should definitely exist in multiple places around the world – and smart people must have made nice businesses out of these factors (for example, in China, someone is making millions by selling CANNED AIR). Do you know of other such innovative business models, that leverage any such local factor?

For Interesting Statistics Everyday, Find Statspotting on Facebook and Follow Statspotting on Twitter

1 Comment for “Innovative Business Models Leveraging Local Factors”

  1. […] to your benefit, you will have figured out a way to solve the chicken-egg problem. Here is an example of […]

Leave a Reply