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Two mainstream models in the future: Subscription & Cooperative

1. Intro: The mainstream models in the future

I believe that Subscription and Cooperative will be the keywords of business in the future. Both focus on"value" and "sustainability" which will be most considered when opening or managing a business.


A. Cooperative


A cooperative is basically an organization with the aim to provide protection for members and to accomplish common goals. Under a cooperative, the owner will have access to affordable capital and business know-how while running one's own business. So one has the opportunity to autonomously own an independent business while working for the joint interest of the cooperative.


The keyword for a cooperative is "protection". So there is an inherent entrance fee and/or commission so that the cooperative can operate. But because the "owners=members" each managerial decision will be eventually weighted with the benefit towards members. Any action countering the well-fare of members will be declined.


Essentially, running a cooperative is equal to running a pseudo-profit seeking company. The cooperative can seek for profit as long as it benefits its members.


Here are some links below:

Cooperative definition in Wikipedia

Cooperative definition in Learning Center


B. Subscription [model]


The subscription business model solves problems for both the customer and the company. The customer receives on-going services throughout the lifetime of use and the business is able to access a constant stream of cashflow.


Of course, there are constraints. First, the customer has to value a repetitive service that is cheaper than doing the task by one's self. For example, I would value a home visit by a car mechanic because I know nothing of cars and I do not wish to take the process of learning car maintenance. But I have no desire for air conditioning maintenance services because I am able to do it on my own.


Second, the business should be able to create a cost structure so that the cost of regular services are minuscule. For example, electronic devices maintenance is so costly most big companies are outsourcing this task because there are no profits to be made. However, Netflix and Amazon are able to provide subscription service because the cost of delivery is either small or customers are willing to pay a premium.


Here are some links:

Subscription business model definition in Wikipedia

Conclusion:

Either by cooperative or subscription, the future is businesses will be shaped in either direction. Both are profitable and sustainable, and both provide value to the customer and company.


Originally written at Wordpress on November 15, 2015.

Relocated and updated February 18, 2018. January 20, 2020.

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