You don’t have to live long in the Web world before you hear someone ask “What’s the business model for x?”, where x is any new technology or trend. An example that’s been doing the rounds for eternity is “What’s the business model for the Semantic Web?”. We saw a variation on this recently following the announcement that we (as in Talis) were winding down the Kasabi data marketplace and our generic Linked Data/Semantic Web consulting business. This prompted tweets along the lines of “just because Talis didn’t find the right business model for the Semantic Web doesn’t mean there isn’t one”.
While I sympathise with the sentiment, I find this kind of analysis, and the never-ending “what’s the business model for x?” questions, rather frustrating, for two reasons:
- The question is meaningless when it focuses on the wrong unit of analysis . Businesses have business models — arbitrary technologies, trends or concepts do not. Asking “What is the business model for the Semantic Web?” is like asking “What is the business model for football?” or “What is the business model for dogs?”.
Football is just a game — it doesn’t have a business model! Sure, clubs and professional associations do, as will the business empires of successful players with lucrative pay and sponsorship deals — the crucial factor here is that they’re all businesses. Similarly, dogs don’t have a business model. Yes, you could breed dogs or feed dogs and choose to base a business on either, but there is no business model around the species itself. Just contemplating the question sounds ridiculous.
- Asking the question reveals a certain naivete about the relationship between technology and business, and I think that’s bad for us as a community. As Jeni Tennison’s recent post on Open Data Business Models highlights, novel business models are rare — the fundamentals of making money don’t change very often (in Web-time at least). Jeni focuses her analysis on Open Data publishers (rather than Open Data in general, which is good), but lists various options for revenue streams rather than business models per se.
If we’re serious about building businesses that exploit new technologies then our discussion of business models needs both the right unit of analysis (the business, not the technology) and the right depth of analysis (the broader model, not just the revenue streams). If we don’t want to engage in this degree of analysis then let’s ask a simpler, and probably more honest, question: “How can I/you/anyone make money from x?”.