The fundamental strategy and framework that defines how a company creates, delivers, and captures value from its products or services. It outlines the company's approach to generating revenue and sustaining profitability.
The term gained prominence in the 1990s during the dot-com era, though 'model' comes from Latin 'modulus' (small measure). As internet businesses challenged traditional commerce, entrepreneurs needed new language to describe innovative ways of creating and monetizing value.
The most disruptive companies often succeed by changing business models rather than just improving products - Uber didn't build better taxis, they created a new model for transportation services. Netflix transformed from DVD rental to streaming to content creation, reinventing their model multiple times.
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