October 18, 2016

Once an entrepreneur thinks of a product and its value proposition, business model comes into play to determine the “how” of the future business endeavour. E-businesses and online commerce platforms are no different. As soon as an innovative product or service is introduced to the online market, the competition influx prompts managers to not only think about how good the product is but also how to set up the entire business around it to generate revenue and stay alive.

Less-is-more or less-is-best is one of such business models. This business model emphasises stripping off distracting features of a product, keeping it minimalistic and useful to the customer. The article on Harvard Business Review gives an example of Instagram, which first saw the world as a part of a complex “feature-laden” application Burbn. Yet, as a separate app, Instagram took off and conquered the world of social media.

The problem with less-is-more business model is satisfying the shareholders, who constantly monitor the growth of the business and, hence, want more and more innovation from a firm for that sake. Consecutively, a simple product stripped off complex features starts to grow additional features. It is especially in the tech-driven e-business environment where the rapid pace of new developments usually far outruns consumer demands.

Are there any solutions to this problem? Product segregation is one of them. This is the term I coined recently, realising how detrimental for me but valuable overall social media is. I personally do not like Facebook and the way people share their lives on the newsfeed for the sake of sharing. However, a separate but related product “Messenger” helps me to stay in touch with a lot of friends and colleagues while skipping the unpleasant part. Facebook’s app “Groups” allows me to keep on doing group projects. Since Facebook groups are one of the most popular platforms to collaborate with university mates in North America, apparently, Facebook deconstructing its product offers from facebook.com website into separate products heavily benefits me.

Just launched, Workspace by Facebook will be yet another way Facebook deconstructs the value it has on the main website into smaller pieces. This way FB integrates a few business models and uses the same product to multiply the value for and/or capture different types of markets.


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