Lead on Purpose

Promoting Leadership Principles in Product Management

How a cow describes your business model

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Today I wanted to have a little bit of fun. Long-time readers probably know that I grew up on a cattle ranch, and despite my 20+ year career in products and leadership, I still love cows, horses and the rural life.

When I found this comparison of cows and businesses, I couldn’t pass up the chance to share it. So, here’s my attempt to use a bit of ‘cow-sense’ to describe eight models that will hopefully shed some light on ways to run your business.

cows-business models-2

Business-Models-Header

The Direct Sales Model

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A direct sales business operates through a network of salespeople. Typically there is no fixed retail location.

Examples: Mary Kay, Scentsy and Stella and Dot

The Freemium Model

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A business under a freemium model gives away a service at no cost before offering advanced services as add-ons.

Examples: Dropbox, Hootsuite, MailChimp

The Subscription Model

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The objective of a subscription business model is to retain customers under a long-term contract and secure recurring revenue.

Examples: Netflix, eHarmony, copyblogger.com

The Franchise Model

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Under a franchise business model, business owners purchase another organization’s business strategy.

Examples: Jimmy Johns, SportClips, Starbucks

The Loss Leader Model

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Loss leader model is a strategy in which a store sells selected goods below cost in order to attract customers who will make up for the losses on more expensive products.

Examples: Samsung, Amazon.com, Apple

The On Demand Model

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Good or services are sold to customers that are typically centered around online platforms. They often offer delivery in a short timeframe.

Examples: Uber, Airbnb, Udemy

The Crowdsourcing Model

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Crowdsourcing is the practice of engaging a ‘crowd’ to contribute collectively to a project or cause.

Examples: 99designs, HitRecord, Upwork

The “Ziferblat” Model

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A unique business model where customers pay for the time in a location and not for extra items such as coffee.

Examples: Ziferblat

Isn’t it amazing how the simplicity of a humble cow helps you learn the operations of many businesses today?

Special thanks to my friends at NeoMam Studios for their bovine-inspired designs and creative comparisons.

Questions: What model fits your business best? Why does your business model matter? Please leave a comment in the space below.


The Product Management Perspective: Understanding the details of the business model your company has chosen will inspire the products you create, and especially the approach you take to understand the market. Study up on this important topic.

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