Open Your Business Model

How valuable is an open business model, with an open API and an entrepreneurial mindset? Take a look at this Twitterverse graphic by Brian Solis. There are hundreds of companies that have built startups around Twitter, in 19 different categories spanning mobile applications to social CRM to search to geolocation. Suffice it to say, there is a significant halo around open products like Twitter and Facebook, growing the value of the service exponentially. This allows the core company to focus on platform, what it does best.I’ve worked with some clients who would benefit from this kind of thinking. It’s not unlike outsourcing certain functions where it doesn’t make sense to develop the capability if there’s no value add. It also works in reverse; some of the best products have become even more valuable than the platform. Take Mint.com as an example. Using Yodlee’s financial platform aggregation technology, they built a presentation layer that far exceeded what was available — and still does. It sold to Intuit for a cool $170M, a huge multiple more than the Yodlee license that powers Mint. How’s that for value creation?

Comment [1]

  • Earl Alderete
    June 1, 2012 at 10:16 am

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