360° Coverage : WhatsApp Valuation - New Business Model of "Value for Many...

2 Updates

WhatsApp Valuation - New Business Model of "Value for Many"

Feb 24 2014, 3:45pm CST | by

There is an interesting correlation between wars and business models. As we have seen in history, an invention of a new weapon can provide unique competitive advantage in the battlefield and can be...

Filed under: news


34 weeks ago

WhatsApp Valuation - New Business Model of "Value for Many"

Feb 24 2014, 3:45pm CST | by

There is an interesting correlation between wars and business models. As we have seen in history, an invention of a new weapon can provide unique competitive advantage in the battlefield and can be the difference between victory and loss for a nation. Similarly new, unique and sustainable business models can guarantee success for corporations over their rivals. One can also segment warfare broadly into five generations – linear (i.e. Napoleonic column formation), trenches and mass sieges (World War I and II), blitzkrieg (infantry and armour working together), guerrilla/insurgency (Vietnam War, Afghanistan) and now cyber warfare – one can also generally segment business models into five similar generations: conventional (Industrial Revolution era), convenience (McDonald’s), magnitude (hypermarkets and Wal-Mart), dot-com (eBay, Amazon.com, Netflix) and now Web 2.0 (apps). Notice the convergence that is taking place between the two, especially within the fifth generation.

A business model that I believe will rule the world in the coming decade is what I call the “value for many” business model. Not “value for money,” but “value for many.” With the  middle class expected to touch 3.9 billion globally, Internet penetration to increase to 5 billion, and with more mobile subscriptions on the planet than humans today, it has become important to “make one, sell and connect many,” more than ever before. The ‘make one, sell and connect many’ concept implies to produce and sell the same product or service to the masses in developing as well as developed countries or connect the market globally using a platform like the Internet or a mobile device.

Facebook’s market capitalisation of $104 billion with over 900 million  users at the time of its IPO in 2012 confirmed this business model and same is the case with its purchase of WhatsApp for $19 billion. You might even argue, comparatively, WhatsApp valuation is low with 450 million customers, but it trumps Twitter’s valuation. Furthermore, WhatsApp’s current business model is not to make money, but to connect people.

A “value for many” business model of connecting people on mobile devices can make a person a millionaire from day one. Yet it is not only meant solely for software based businesses, this business model also works very well for a hardware or service-driven model. Aravind Eye Care Hospital in India charges an average cost of $25 per cataract operation compared to costs of $2,000 to $4,000 in the West, and is able to do by applying techniques from the automotive industry to healthcare in order to achieve a profitable business. Their eye surgery is conducted similar to a car production assembly line operation with standardisation of equipment, staff and training across the surgery chain. It keeps its surgical equipment in operation 24-hours a day, and doctors focus only on performing surgery, while nurses handle pre-op and post-op care, thus increasing doctor productivity and keeps costs per surgery low.

Companies like Siemens and GE are now also applying the “value for many” business model by developing low-cost products in the developing world and selling them globally. Also, Ford’s survival strategy during the recession in 2009 was to make a limited number of models on global platforms and sell the same vehicles in all markets of the world. It reduced its platforms that produced its 90 different models of cars from 27 to 14 platforms producing only 50 models of vehicles.  The success reflects in its share price today. So if you are thinking of what business model to focus on in your organisation or your own business, think of the simple “value for many” business model. Do simple math of how many people you can sell to and connect with and if the numbers are in millions, you have the framework for success.

Source: Forbes Business


7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of 20,000 by 3 ...
Source: Business Times Singapore   Full article at: Business Times Singapore


7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double ...
Source: Business Times Singapore   Full article at: Business Times Singapore


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed Tuesday that she no longer had the virus in her blood.
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development.
Colombia to launch world's first floating gas liquefaction plant
Bogota, Oct 21 (IANS/EFE) The world's first floating gas liquefaction plant is due to begin operating next year off the coast of northern Colombia under a pact between Canada-based Pacific Rubiales Energy and Belgian shipbuilder Exmar.
Paralysed man walks again after pioneering cell therapy
London, Oct 21 (IANS/EFE) A paralysed man has been able to walk again after therapy that involved transplanting cells from his nasal cavity into his spinal cord, the BBC reported Tuesday.

Latest from the Network

European Champions League standings
Paris, Oct 22 (IANS) Following are the European Champions League standings for Groups E to H after Tuesday's matches (tabulated under matches played, won, drawn, lost, goals for, against, points), according to Xinhua...
Read more on Sport Balla
Rogerio set to break Giggs world record
Rio de Janeiro, Oct 22 (IANS) Sao Paulo goalkeeper Rogerio Ceni is one victory away from earning his fourth Guinness World Record by eclipsing a mark held by Manchester United legend Ryan Giggs. The 41-year-old will...
Read more on Sport Balla
Ryan Reynolds can't keep his hands off Blake Lively
Ryan Reynolds was ''really sweet'' to Blake Lively at the Angel City Ball. The couple, who got married in September 2012, made their first red carpet appearance together in New York City on Monday night (10.20.14) since...
Read more on Celebrity Balla
Kris Jenner doesn't know who Bruce Jenner is dating
Kris Jenner has ''no idea'' whether Bruce Jenner is dating her best friend. The 58-year-old reality TV star, who split from the Olympic gold medallist last October after 23 years of marriage, claims she doesn't know if...
Read more on Celebrity Balla
When Rihanna dressed like 'Harry Potter'
New York, Oct 22 (IANS) Singer Rihanna was spotted here in a Harry Potter style costume. She wore the wizard-like get-up while heading for a business meal here Monday, reports mirror.co.uk. The 26-year-old combined a...
Read more on Celebrity Balla
Germany raises humanitarian aid to Iraq
Berlin, Oct 22 (IANS) Germany has pledged a further 20 million euros (about 25.5 million dollars) in humanitarian aid to Iraq, the foreign ministry said in a statement Tuesday. The additional funds are immediately...
Read more on Politics Balla
India calls on Israel, Palestine to resume peace process
United Nations, Oct 22 (IANS) India has called upon Israelis and Palestinians to resume the peace process as "dialogue remains the only viable option" to address the issues confronting the region. In a brief statement...
Read more on Politics Balla
Airstrikes help ground forces fight IS: Pentagon
Washington, Oct 22 (IANS) Kurdish forces are in control of the majority of the Syrian city of Kobane despite efforts by the Islamic State (IS) to take the town, a spokesperson for US defence department said Tuesday....
Read more on Politics Balla
Palestine, Israel urged at UN to halt unilateral initiatives
United Nations, Oct 22 (IANS) UN Secretary-General Ban Ki- moon Tuesday called on Palestine and Israel to overcome differences and halt unilateral initiatives that fuel mistrust, so as to pursue long-term stability in...
Read more on Politics Balla
China urges Israel to create conditions for peace
United Nations, Oct 22 (IANS) Chinese government has called on Israel to create necessary conditions for the resumption of peace talks with Palestine. At an open debate of the Security Council on the situation of the...
Read more on Politics Balla