So in the last few videos, we had a discussion about these different types of platform business.
So in those videos we had a discussion about marketplace business model that is used by companies like
Amazon and eBay.
And we had a discussion about aggregator business model like Airbnb or Uber.
Now let me give you a problem solving assignment so that you can implement your learning.
So let's say your family is running a traditional beauty salon and now you have to reinvent this traditional
beauty salon in a platform business.
Now, in a beauty salon business, you have three important parties.
The number one is the beauty salon itself.
Then we have a hairdresser that provide you all these different types of services you need.
And in the end, you have your user who is availing these services.
So if you are reinventing your traditional salon business into a platform, then obviously you have
to make a website or a mobile app.
And in that case you can use all of these different types of business model.
Now there is a slight difference between all these different business model, and by the end of this
assignment, I'm going to tell you which business model is good for you.
So let's start with our first business model, that is pipeline model.
Now, in the pipeline model, you will simply connect your user with the hairdresser.
And this is super simple, but the second kind of business model is listing fees model where you take
a small fees, so called a platform fees from the hairdresser so that you can list them on your platform.
For that, you may charge, let's say, $100 or one $50 so that you can make the profile of a hairdresser
visible on your platform.
And that's your listing fees model where you charge a platform fees so that you can list those hairdresser.
Third is the two sided platform model where you take a small cut from the hairdressers amount.
So let's say if the hairdresser is owning hundred dollars, you can take a 5% or let's say a 10% cut
because you are giving them the customer.
That's your two sided platform model.
The fourth one is multi sided platform model where you take a small cut both from the hairdresser and
from the user.
So let's say to book a hairdresser, a user have to pay, let's say maybe $5 or $10, and you will take,
let's say 5% or 10% commission from the user and let's say maybe 5 to 10% commission by the end of the
month from the hairdresser as well.
Then in the end, we have a subscription business model where you charge a subscription amount to the
user so that you can avail these different services on your platform.
So all these different types of business model have some advantage and some disadvantage, but you have
to figure out which business model is best for your business.
And we will do that by the end of this assignment.
Now, in this assignment, you have these three important parties, your hairdresser, your mobile app
or website and your end user.
You can show all these different types of business model using this diagram.
So please take out a pen and a piece of paper and you can spend 10 to 15 minutes completing this assignment.
And after that we'll talk about the solution.
So I assume that you have spent some time solving this problem by yourself using all these different
types of business model.
So now let's solve this problem with the help of linear or pipeline model.
Now, this is the simplest form of business model that you can use.
So you have your website or let's say mobile app.
So you are the intermediary of this business model.
And let's say you have hairdresser on one side and a user on another side.
So as an intermediary, your role is to make sure that you're connecting the hairdresser with the user.
So in the linear or pipeline model, the beauty salon will hire these independent hairdresser and they
will rent them out to these end user.
And if you look at this business model, they have some major risk of bypassing.
So let's say if a hairdresser is reaching out to these customer, then they can make a strong bonding
or connection with these user and they don't really need these platform anymore.
I mean, they can directly reach out to these user and they can give them the service.
So there is a major risk of bypassing the platform.
And in technical term, we call this as a disintermediation or platform leakage.
And let's fix this problem with the help of one more business model that is a listing fees model.
So in listing fees model, a platform or a beauty salon will charge a flat fee to these hairdresser
so that they can list their profile on their platform.
So let's say you will normally charge $50 or let's say $100 so that you can list these hairdresser on
your platform.
So you have your beauty salon, your mobile app or your website in the middle, and you have hairdresser
on one side and user on another side.
And let's say you are taking a listing fees from these hairdresser so that you can provide a market
access because you have the access to these many customer and these hairdresser need the access and
that's why they are paying you the platform fees or listing fees.
And then these user can talk to these hairdresser and they can tell them about the requirement, the
kind of budget they have, and then these hairdresser can provide them a service by giving an offer.
And that's your listing fees model.
So if the platform is connecting these hairdresser with the end user, then they still have the bypassing
risk or platform leakage.
So let's talk about the third type of business model that is the two sided platform model.
Now, in two sided platform model, you will try to take a small cut, maybe around 10 to 15% from the
hairdresser every time he gets a booking on your platform.
So let's say any time a hairdresser get a booking of a user, they will pay a platform fees.
This can be 10 to 15%, and for that a platform will provide them the market access and they will also
help them in accepting the payment from the end user.
So they will have all of these payment integration payment settlement and they are giving market access
for these customer.
Now, this two sided platform model is used by almost all the different types of aggregators like Airbnb
or Uber.
Now, another advantage of using a two sided platform model is network effect.
Now I'm skipping network effect for a while because we have a dedicated video on network effect.
Let's say after thinking about these three different types of business model, you started talking to
these different hairdresser and user so that you can understand what kind of problem these people are
facing and how exactly you can solve this problem.
And after talking to your user, or let's say a hairdresser, you came up with this multi sided platform
model.
So after talking to these different hairdresser, you will realize that these people don't really have
a lot of money to buy these expensive equipment.
So you will take a small commission of around 15 to 20% from these hairdresser because you are giving
them the market access and you are accepting and settling payment from the customer.
And in return of that, these hairdresser are getting a booking.
But the best way you are doing now in the multi sided platform model is that you are lending your equipment
to these hairdresser and you're giving them the proper training so that they can perform their role.
And this is also considered as one of the best business model in this case.
The fifth one is the subscription fees model, which may not work well in this business, but we are
still discussing about it.
So in subscription business, you will take a subscription fees from your user and then you will release
the money directly to the hairdresser without any commission.
And these users can avail these different types of services on your platform.
So hairdresser is getting market access from you and these users are paying you the monthly fees.
And in return of that, these hairdresser are providing services to these user.
So one of the best business model you should implement in this case is multi sided platform model.
And let me explain why I am interested in choosing this business model.
So in a platform business, you have to make sure that you are maintaining a strict quality control.
You also need to make sure that your service provider are giving you the right kind of service at the
right time.
And then you also need to make sure that you are taking a small cut from both the side so that you can
provide these services.
So you are taking a 15% commission from hairdresser or let's say a 10% commission from user, and you
are getting money from both the end and return of this money.
You are providing proper training to these hairdresser and lending equipment so that they can perform
their service.
And that's why multi sided platform is considered as the best business model.