Products are awesome. We love everything about them – looking at them, touching them, experiencing them and using them to make our lives more enjoyable, meaningful and productive. But, regardless of how perfect a product may appear, it only becomes truly great when it’s married to an exceptional business model.
Take Apple’s iPod for example. The market was littered with digital music players of all kinds at the time of its arrival. What set the iPod apart and made it a runaway hit was its integration with iTunes. iTunes was, in a sense, the business model. With it, Apple created a simple and enjoyable system for filling a music player with thousands of your favorite songs. Not only was the model great for customers, it was great for Apple too. Instead of just selling a piece of hardware, Apple’s made billions delivering digital music one song at a time.
I have a friend named Ray. His company, Refresh Glass, makes drinking glasses. They look nice, feel good and are enjoyable to sip from, but they’re much more than that. You see, Ray gets his glass by rescuing wine bottles from the trash bins of bars and restaurants. He then cleans them, cuts them, reshapes them and turns them into functional pieces of art. Each and every glass is unique and its purchase completes a loop that’s as good for Ray’s customers as it is for our community and environment.
Both Apple and Ray have more than a product – they have better business models (Hotwire does too). What makes them better? They’ve constructed a more complete way to serve, align and integrate their business’ interests with that of their customers, employees, vendors, shareholders and the communities in which they operate. The result is a better product, a more fulfilling consumer experience and not surprisingly, sustained and improved profits.
Better business models are based on prioritizing long-term results benefiting all stakeholders vs. a short-term transactional product sale. As a result, they produce intangible experiences that transcend the products themselves – they in effect become the product’s soul.
When developing your product be sure to spend as much, if not more time, contemplating and implementing a business model capable of serving your highest dreams and aspirations. Your customers, employees, investors, vendors, and the communities in which you operate will be glad you did.