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7 Business Models Startups Need to Embrace

Ninety percent of startups fail because they don’t have a growth strategy in place. This can cause these small businesses to crash and burn in the first few years of launch. Thankfully, these latest trends have made it possible for startups to adapt to a business model that works for them. It’s important for businesses to keep up with these models since they’re changing every day. 

Online Crowdfunding & Fundraising 

It’s imperative for small businesses to have some amount of capital before launch. They have incorporated the use of crowdfunding and fundraising websites that help them raise as much money as possible. Unfortunately, people who don’t own startups have abused this business model. The latest trends in this industry are putting an end to an all too common problem. 

Crowdfunding and fundraising websites need to verify users who use their services. Since these websites are mostly used for charitable products and services, startups and small businesses will use them to raise money to launch a product or service. These companies ask for recurring donations towards a product or a service that their customers need. This business model has turned many startups into successful corporations. 

Blockchain-Based Business Model 

Sometimes online payments made with a credit or debit card can take several days to process. This can become a problem for the consumer and the business. Cryptocurrency is a type of digital currency that’s been growing in popularity the past few years. It processes secure online transactions to verify payments 

That means online payments are made quickly and easily. Launching a blockchain-based business model allows startups to accept payments online, allowing them to focus on other aspects of their business. Startups that use this business model will see exponential growth. E-commerce sites and online retailers are turning to blockchain-based business models to process online transactions in real time. 

This ensures that they will get paid for their products and services. Since the transaction is immediately and safely transferred, there is little input from customers about receiving their products or services. 

Shared Economy Business Model 

The shared economy business model has boomed over the years. This popular business model includes a combination of real-life interaction and online interaction. The transactions take place online or via a mobile app. Some of the most popular companies in this business model include Airbnb, Lyft, Uber, and Zipcar. Thanks to this business model, startups can flourish and customers can get what they want. 

This business model works similarly to car rental services and hotel chains. Work at home opportunities is made available thanks to this business model. Outsourcing is expected to rise around the world. This business model is beneficial for most startups since they can offer products and services immediately to their customers. 

This is ideal for entrepreneurs and independent contractors who want to start a business from home. They have the option to work at home or outside the home if they prefer. Many websites have filled this niche, making it somewhat crowded. But there’s still room for a similar concept that fulfills the needs of customers while making it lucrative for aspiring entrepreneurs. 

On-Demand Service Dispatching 

On-demand service dispatching is a type of business model that sends out an independent contractor to a location where their expertise and skills are needed. This business model is scalable, which means businesses can hire as many independent contractors as long as there’s a demand. For example, Lyft and Uber have thousands of drivers who provide ride-sharing services through their app. 

This business model doesn’t work with the others on this list. It also doesn’t work for most industries. It’s up to other businesses to embrace this trend. 

Drop Shipping 

Drop shipping is a type of business model in which businesses request a paid list of merchandisers and wholesalers who provide them with the products they need. Due to the high costs, they’re flocking towards shipping directories without fees. This is especially popular with startups and small businesses with tight budgets that are interested in the drop shipping business model. These companies use a combination of website aggregators and bloggers who provide them information about the merchandising industry. 

Monetized Open-Source Software 

While most open-source software programs are free, these developers have found a way to make a feasible living. The monetized open-source software business model allows them to create open-source software for a small fee or a recurring monthly fee. This business model is changing the way that most tech startups are launching their businesses. Developers who don’t want to reveal their entire code on the Internet allows them to launch new programs while making a living. 

Subscription-Based Sales Models 

Subscription-based sales models allow small businesses with small businesses to offer versions of their products and services for a small subscription fee. The updates are also provided within that package. This business model has been successful for most startups since they get a larger amount of leads than they normally would if they offered a free version of their products and services. Startups that have game developers have been testing this idea. 

It’s imperative for startup founders to look to these trends. Determining the future of business models is difficult because of how quickly the e-commerce industry has been moving. These trends aren’t going away, they’re just going to quickly adapt to the industry. Startups and small businesses should look to these trends before launch without an end goal.

About the author


Philip Piletic

My primary focus is a fusion of technology, small business, and marketing. I’m an editor, writer, marketing consultant and guest author at several authority websites. In love with startups, latest tech trends and helping others get their ideas off the ground. You can reach over over LinkedIn.