Business model shifts are fast, unpredictable and numerous, and if you have missed the ones I set out below, you have no time left to waste, because they have been in the air for a while now.
For two years I have been collecting, synthesising and analysing every business model I can find, with the aim of turning them into a directory. From BMW to Tesla, from Arianespace to SpaceX, from a metered taxi fleet to Uber, I have identified 160 main models so far, free access being one of them, and they break down into 250 sub-categories such as freemium, premium and donation.
Time to face something. Like company values, which need re-evaluating every three years to check they still line up with what society expects, business models now have a shorter and shorter working life. There is nothing accidental about the fact that the VUCA approach opens on volatility.
A company can no longer rest on its business model without pivoting after a few years, and after a few months in the case of small businesses, whose economic model gets copied exactly as often as that of large ones. I think of Scour, the first consumer peer-to-peer download software, copied and improved by Napster, as I tell in my podcast on Uber.
Digitalisation is accelerating these changes. Some people call them disruptions or ruptures. I would speak instead of displacements, of value moving from one place to another, or of the shift.
Let me stay on the Uber case for an easy and well-known example. Their first business model rested on a simple value proposition, giving well-off passengers easy access to premium vehicles for a few dollars more than a taxi. That model and that market lasted until 2012, the year Logan Green and John Zimmer, the founders of Lyft, built their offer for a market Uber was not in, the people who could not afford Uber at all. Sitting in another market, they assumed Travis Kalanick, then CEO of Uber, would leave them alone in that niche.
Not a chance. Within days Kalanick launched UberX, opening the service to every licensed driver at a price at or below the taxi fare. He renamed the premium service Uber Black, and Uber became UberX. That single change of market is precisely why Uber became an exponential company.
Over the long run, these shifts create blind spots for leaders who never sit down to work out what they mean, for value creation, for the customer relationship and for the capture of data, which is becoming the battlefield between brands.
Here is the entry almost nobody writes down. Every shift moves a cost or a risk off your books and onto somebody else: the customer, a partner, a worker, a regulator or the planet. Read this way, the list below becomes a ledger, and the question stops being which shift to adopt. It becomes who is now carrying what you stopped carrying.
| The inherited reflex | What it produces | The shift that transforms |
|---|---|---|
| Business model shifts read as a trend listBusiness model shifts are durable displacements in the way value is created, delivered and captured, from subscription and platform models to circular and data-driven ones. Most leadership teams treat them as trends to adopt before a competitor gets there first. | A transfer nobody pricedEach shift relocates a cost or a risk that used to sit inside the company. Inventory, financing, quality control, safety and privacy exposure end up with a customer, a contractor, a partner or a regulator, often without anyone putting a figure against the move. | The ledger readingThe useful question is who now carries the load and whether they can hold it. A shift holds when the receiving party genuinely gains from it, and it breaks when that party cancels, disputes or ends up protected by regulation. |
Where to look inside your own business model
Time to examine every element of your business model and identify the large movements now setting in, all of them tied directly to digitalisation. Some of them are far from recent, and plenty of companies have still done nothing about them. The exercise starts with your own model.
What a business model shift actually moves
A business model shift is a lasting displacement in how an industry creates, delivers and captures value, well beyond a single product change. Every shift redistributes a load that used to sit in one identifiable place. Inventory risk, financing, quality control, safety and privacy exposure all have to live on somebody’s books.
None of this makes the models wrong. It makes them accountable. A shift holds when the party receiving the load can carry it, and it breaks when that party refuses, cancels, organises or brings in a regulator.
From the 4Ps to the SAVE model
The 4Ps have been challenged for some years by the SAVE model, presented as the marketing mix of digitalisation. Each of its four letters describes a transfer, which is why marketing saw this movement coming before strategy did.
- Solution, which illustrates the product to service shift.
- Access, which illustrates the paid to free shift.
- Value, which illustrates the shareholder to stakeholder shift.
- Education, which illustrates the loyalty to responsibility shift.
Education is the clearest of the four. Teaching customers to use a product properly hands them part of the responsibility for the result, and that is a transfer with a price attached.
The ten main shifts that come out of this transformation
Ten displacements now carry most of the movement in business models, with an eleventh worth watching more closely than the rest. Each one is described here with what it changes for the customer and with the load it hands to somebody else, so the entry can be written down before the model is costed.
The subscription shift, from purchase to recurrence
The subscription shift is like moving from selling a novel to selling a gripping series. Nothing about it is an innovation in itself, and its growing popularity is redefining what consumers expect. A customer who never buys anything outright also never stops evaluating you.
Consider Dropbox, a service that turned file storage from a one-off purchase of hard drives into a cloud service on subscription. That is the freemium model, where basic access costs nothing and the real magic starts when the customer wants more features, more space and more collaboration. Canva runs the same logic out of Sydney. Then there is Netflix, whose all you can eat offer opens the whole catalogue for a fixed monthly price.
The subscription shift is a change of mindset, where immediate satisfaction gives way to continuous satisfaction. The company gains predictable revenue and takes on the obligation to justify itself every single month. Subscription fatigue is the receipt for that trade.
The digital shift, from physical to dematerialised
The digital shift works like the move from a dusty library to an e-reader, a change in the way we consume information. It is not new, and its relevance holds. The buyer stops owning the asset and starts accessing it, which puts control of that asset back with the vendor.
Atlassian, one of Australia’s largest technology companies, ended sales of its self-hosted products and set a firm timetable for moving every customer to the cloud. Software you once bought and installed has become software you rent, as Adobe did with Creative Cloud. The model is agile and fast, it removes intermediaries and it ignores borders.
The customer inherits the migration project, the integration rework and the loss of the option to stay put. Vendors who make this move without funding the transition find out how expensive an irritated installed base can be.
The network shift, from pipe to platform
The network shift is the move from linear distribution to an interactive ecosystem, a change of paradigm where the platform takes precedence over the product. The platform owns the rules, the matching and the data. Everybody else owns the work.
Consider YouTube, a giant whose value sits in the interaction between users, against a broadcaster that depends on the transaction of content. Airtasker runs the same logic in Australia with no workforce of its own. With a platform business model, every user becomes a potential creator or seller, a node in a live network.
Australia is where this ledger now gets audited. A decade of moving vehicle costs, waiting time and injury risk onto contractors ended with the Fair Work Commission gaining power to set minimum standards for employee-like workers. Part of the transferred load came back with a price on it.
The offer shift, from product to service
This one turns a proposition built on a product into a solution built on a service. The focus moves from the object to the need it fills, and ownership of the asset stays upstream with the maker, along with the maintenance risk.
Brambles, headquartered in Sydney, runs the world’s largest pool of reusable pallets, crates and containers through CHEP, and describes its own model as share and reuse. Customers hire the pool, use it and hand it back. Philips did the same with lighting sold by the lux, where the client pays for light and never buys a globe.
This displacement is one of the few that pulls load back onto the seller. Quality, repair and recovery become your problem again, which is exactly why the margin can be defended.
The value shift, from cost of manufacture to value delivered
In the value shift, pricing slides away from production cost and settles on the value the customer perceives. The price of a product gets calculated on what it brings to the buyer, and no longer on what it cost to make or on how much of it gets used.
Australian professional services firms have been living this for years as they move from hourly rates to fixed-price scopes and outcome-based fees. The client stops paying for time and starts paying for a result. Whoever carries the risk of a job running long becomes very easy to identify.
The value shift is the recognition that price should reflect the value added for the customer. Misjudge that value and you have absorbed a cost you cannot bill.
The ecological shift, from single use to circular
The ecological shift is the move from a linear consumption model to a circular one, where reuse becomes the key to value creation. Every other displacement on this list pushes load outward. This one pulls it back in.
The Productivity Commission found that reuse, repair and product design that cuts input and disposal costs can deliver real economic and environmental benefits, while noting that Australian progress has been slow and that product stewardship obligations are one of the main levers. Reusing materials is an environmental necessity and a value proposition customers will pay for.
The ecological shift is a commitment where each product has several lives and each company an environmental conscience. It is the hardest to adopt and the most defensible once you have.
The lean shift, selling the product before making it
The lean shift is a bold strategy that sells a product before it has been manufactured, which cuts financial risk and tests the market at the same time. Crowdfunding platforms made it available to anybody with a prototype and a decent video.
Dell was a pioneer, selling computers before assembling them. Flow Hive, invented by a father and son near Byron Bay, ran what IP Australia records as Australia’s most successful crowdfunding campaign, raising around twelve million US dollars in pre-orders against a seventy thousand dollar target. Tesla pushed the concept further with deposits on cars that were prototypes at the time and stayed that way for years.
The lean shift is a bet on the future and a demonstration of trust between maker and consumer. The backers carry the delivery risk, and early commitment is a loan that gets called in.
The experience shift, from product to emotion
The experience shift turns the value of a product into a whole experience, where emotion counts for more than simple ownership. The object stays identical, and everything around it does the selling.
An independent bookshop and an online marketplace sell the same paperback at different prices. The bookshop survives on the staff pick, the reading night and the conversation at the counter, all of which go well beyond making a product available with some advice attached.
The experience shift is an invitation to a journey where the product is only the beginning. The load lands on your people, which makes these models expensive to run and very hard to copy.
The partnership shift, from competition to collaboration
The partnership shift is the move from ferocious competition to a mutually beneficial strategy, where interests converge with a complementary competitor under what is called coopetition. It works where the customer never sees the shared part.
Renault and Mercedes-Benz co-developed a 1.3 litre turbo petrol engine used across both groups. The two companies chose synergy over rivalry and created added value for both brands, an approach some rivals never take, as the long standoff between Coca-Cola and PepsiCo shows.
The partnership shift is a game of chess where two kings decide to reign together. Both sides gain scale and give up a little sovereignty, and the dependency only becomes visible when the partnership ends.
The time shift, from permanent to ephemeral
The time shift is the art of capturing attention through urgency and exclusivity. It can be a temporary design, a temporary advantage or a pop-up store, all of them built to trigger urgency to buy or the instinct to collect.
In a world where everything sits within reach, the ephemeral becomes an art, the art of creating intense and immediate desire. Food businesses play this with rotating specials that reward whoever shows up now, while Adidas opens pop-up stores that turn buying into a treasure hunt for limited editions. The strategy pushes people to act now for fear of missing out.
The time shift is a dance with the clock, where every tick is a note pushing towards action. Run it too often and the mechanism inverts, because customers learn that another drop is coming.
The data shift, from tangible to intangible
Among all these displacements, one deserves closer attention than the others, the data shift. It compares to an economy moving off physical gold and onto digital oil, and it marks the passage from valuing tangible assets to valuing information.
Australian supermarkets show the full mechanism. Woolworths reports more than ten million active Everyday Rewards members and strong growth in its retail media business, Cartology, in its most recent full-year reporting. Groceries fund the data, and the data funds the advertising, in an exchange where the service gets monetised through access to information instead of a traditional payment.
Companies that master collection, analysis and monetisation of data are the new alchemists, turning bits and bytes into gold. They also hold a liability that grows every year, because a breach now costs more than the data ever earned.
Field note
The maintenance business that sold certainty and forgot to price it
A Victorian equipment maintenance business brought me in to help them move from selling call-out repairs to selling a monthly uptime subscription. The team had done the work on pricing, packaging and sales scripts, and the first quarter looked excellent. Recurring revenue climbed, churn sat near zero, and the sales cycle halved.
What nobody had written down was the transfer. Their customers used to carry the risk of a breakdown and budgeted for repairs as they happened. Under the new model that risk sat entirely with the maintenance business, priced on an average year instead of a bad one. In month seven, three major failures landed inside the same quarter, and the margin on the whole subscription book disappeared into parts and overtime. Nothing about the model was wrong. The ledger entry was missing, so the risk had been handed over for free.
Before you launch a shift, write down the load you are taking on or handing over, put a dollar figure against it, and build that figure into the price. A transfer you have not priced is a transfer you will pay for twice.
How do you integrate these shifts?
Four steps run with your team will do it, and the sequence matters more than the speed. Each step closes with a written entry naming what the new model moves and onto whom, so the decision arrives costed. Contact me if you want to go deeper than what follows.
Four steps to integrate business model shifts as a team
Work through these in order, and score honestly. The exercise only pays if the first step hurts a little.
- Start with an audit of your current models that spares nobody. Imagine you are a judge on The Voice, fair and merciless. Rank your business models from 1 to 5, where 1 is as dated as an audio cassette and 5 is as forward-looking as artificial intelligence in people management. Sitting at 1 means it is time to change the music.
- Then, like an explorer after unknown territory, go deep into your ecosystem. Question your team, your loyal customers, the customers who turned their back on you, and the people who have never heard of you. Every interaction is a golden thread that can weave the carpet of your next success. Seek to understand, and leave the selling out of it.
- Armed with what you gathered, bring your team together for a brainstorm and ask the question that stings: which business model could sign our death warrant? Be the Sherlock Holmes of your own company and anticipate the fatal blow before it lands. Then invert the threat and turn it into an opportunity, the way Airbnb did with its internal group called What could kill us?
- Invest in your networks and take some risk. Experiment with your new business models inside that network, starting with the ones that would put you in danger. The network has to include your non-customers, meaning the people who judge you unsuited to their need, the people who do not know you, and the ones who were customers until you disappointed them.
What each step should produce on paper
Each step ends with one line in the ledger, naming the load, the party who will carry it and the price of that transfer. A model scored 2 with a load nobody can carry is more dangerous than a model scored 1, because the danger arrives later and with interest.
Teams that skip this line usually discover the transfer through churn, a dispute or a new compliance obligation. Writing it down at step one costs an afternoon.
Which business model shift should you commit to first?
The right shift is the one whose transferred load lands somewhere that can genuinely hold it, priced on purpose. Comparing your options against your own criteria beats copying whichever model a competitor announced last quarter, and two questions settle most of it: who carries the load, and how mature is your team.
Absorb, transfer or share, three ways to run a shift
Every shift can be executed three ways, and the choice sets your margin, your fragility and your defensibility. The table below compares them on the criteria that decide the outcome.
| Approach | What you do with the load | Best when | What it costs you | Signal you chose wrong |
|---|---|---|---|---|
| Absorb | You keep the risk and price it into the offer | Your balance sheet is solid and you understand the risk | Margin, and slower scaling | Volume grows and profit does not |
| Transfer | You move the risk to the customer, a partner or a contractor | The receiving party gains from it and can carry it | Fragility, and exposure to regulation | Churn, disputes or a new compliance obligation |
| Share | You split the risk through a contract with a partner or the customer | No single party can hold the whole load | Sovereignty and speed of decision | Neither side acts when something breaks |
The signals that should guide your investment
Three signals tell you a shift is worth funding now. Your customers already behave as though the shift has happened, the load you would hand over is one they are willing to carry, and your own team has run at least one experiment on a small scope without breaking anything.
A leadership team new to this work should absorb first, on a deliberately small scope. Absorbing teaches you what the risk actually costs before you hand it to anybody else.
Score your own models before the market does it for you
Want to run this audit on your own business this week? Open my business model portfolio tool and map every model you currently run, so you can see which ones carry a risk you never priced.
How I can help you master business model shifts
I work with executive teams, boards and manager communities on exactly this question, using the directory of models I have built over the last two years as working material. Three formats cover most needs, and each one ends with decisions written down instead of applause.
Keynotes that end in a decision
I speak on business model shifts at conferences, leadership offsites and industry summits, in English and in French. The talk works best when it closes with a live scoring of the audience’s own models. You can book me as a business model speaker for that format.
Workshops on your business model portfolio
Over half a day or two days we map your current models, score them from 1 to 5, and build the ledger for the three shifts most likely to reach you first. Teams keep the work going afterwards with my business model portfolio tool.
Diagnostics and manager communities
For organisations that already know a shift is coming, I run a shorter diagnostic on where your value and your risk currently sit, then support your manager community through the transition. That work usually begins with the opportunities your current model leaves on the table.
Conclusion
Integrating business model shifts is a little like learning the tango. It takes passion, technique and a partner you trust. Follow these steps with some determination and you could well be the next to lead the dance in your sector. And if you stumble, get back up with a smile, because even the greatest started with a hesitant step.
What I would keep from all this is the ledger. Every displacement moves value forward and moves risk sideways, and the companies that get caught are the ones that celebrated the first movement without pricing the second. Read your business model shifts as entries in a ledger and you will pick the right one far more often than the market does.
Frequently asked questions about business model shifts
What is a business model shift in simple terms?
A business model shift is a lasting change in how an industry creates, delivers and captures value, such as moving from one-off sales to subscriptions or from a pipeline to a platform. It changes who does the work and who carries the risk, well beyond what gets sold.
How often should a business review its business model?
Every three years suits most established businesses, and every twelve months suits small firms whose models are easy to copy. Evidence triggers the review ahead of the calendar, so a new entrant, a margin slide or a change in customer behaviour should bring it forward.
What is the difference between a business model shift and a pivot?
A shift happens across a whole market and affects every player in it, while a pivot is one company’s response to that movement. Uber opening UberX was a pivot. The wider move from owning vehicles to accessing them on demand was the business model shift underneath it.
Which business model shift should a small Australian business start with?
Start with the shift whose transferred risk you can already carry, which for most small firms means the offer shift from product to service. It builds recurring revenue without demanding platform-scale investment, and it keeps you close enough to customers to spot the next shift early.