Pay-What-You-Want (PWYW)

Example: Radiohead’s "In Rainbows" Album (2007)

• What’s Unusual: Instead of setting a fixed price for their album, Radiohead allowed fans to pay whatever they wanted, including nothing.

• Success: This approach defied conventional wisdom that consumers wouldn’t pay without a set price. It resulted in huge media buzz, millions of downloads, and loyal fan support. Despite many choosing to download it for free, the band still made more money than from traditional album sales.

Negative Operating Cycle

Example: Amazon and Costco

• What’s Unusual: Traditional retail operates on paying suppliers before selling to customers. However, Amazon and Costco often sell products and receive cash from customers before paying suppliers, essentially using customers' money to fund operations.

• Success: This model allows them to run with negative working capital, improving liquidity and reducing dependency on external financing.

Scarcity Model

Example: Supreme (Streetwear Brand)

• What’s Unusual: Supreme creates a limited quantity of products and releases them in small "drops," building massive hype and demand through perceived scarcity.

• Success: Despite offering products with very limited availability, or perhaps because of it, Supreme built a cult following. The resale market for their products often far exceeds the original price, creating an unusual form of value amplification for the brand.

Loss Leader with Ecosystem Play

Example: PlayStation and Xbox

• What’s Unusual: The gaming console industry often sells its hardware at a loss or minimal profit, but makes significant profits through software (games), in-game purchases, and subscriptions to online services.

• Success: The loss-leader strategy works because the ecosystem of games and add-ons creates long-term revenue. Console makers often focus on locking users into their ecosystem, where the real profits lie.

Luxury for Rent and Subscription Model

Example: Bag Borrow or Steal

• What’s Unusual: Instead of buying luxury goods, consumers can rent expensive designer handbags and accessories for a fraction of their retail price. This goes against the conventional belief that luxury goods are lifetime purchases.

• Success: This model works well with millennial and Gen Z consumers who value experiences over ownership and prefer variety.

Crowdsourcing Content and Revenue Sharing

Example: YouTube

• What’s Unusual: Instead of producing its own content like traditional media companies, YouTube relies on user-generated content. Creators make the content, and YouTube monetizes through ads, sharing part of the revenue with creators.

• Success: This model revolutionized the entertainment industry by empowering individuals to create content while providing YouTube with endless, low-cost video content.

Open Source Business Model

Example: Red Hat

• What’s Unusual: Red Hat built its business on free, open-source software (Linux). Instead of charging for the software itself, they made money through support services, training, and customizations.

• Success: Red Hat showed that you could monetize something that was free to download by creating value in service and expertise. This disrupted traditional software sales and licensing models.

Pay-for-Results Model

Example: Duolingo

• What’s Unusual: Duolingo provides a free platform to learn languages but offers businesses the ability to translate content as part of its crowdsourcing approach. The free users get to practice languages, while companies receive professional translations.

• Success: This model gave Duolingo an edge in both consumer language learning and B2B translations. The innovative pricing—where businesses pay for results, not just a service—was highly scalable.

Flat Rate for Unlimited Service

Example: MoviePass

• What’s Unusual: MoviePass offered customers unlimited access to movie theaters for a flat monthly fee, which was significantly lower than the price of seeing multiple movies.

• Success and Failure: While this model gained massive attention and customers, it was ultimately unsustainable. However, it demonstrated the appeal of flat-rate, all-you-can-use models in other industries, such as digital services like Spotify and Netflix.

Gifting Economy

Example: Craigslist

• What’s Unusual: Craigslist operates largely as a gifting economy in many categories where goods and services are exchanged for free or low cost, without traditional transactions. It earns revenue primarily from a few paid job listings and real estate ads.

• Success: Despite its simplicity and lack of monetization in many areas, Craigslist remains one of the most visited sites for classified ads, thriving on a community-driven model that goes against the revenue-first approach of most platforms.

Benevolent Decoy (Anchoring)

Example: The Economist Subscription

• What’s Unusual: The Economist famously offered three pricing tiers: (1) digital only, (2) print only, and (3) print + digital, with the second and third options priced nearly the same. The middle "decoy" option pushed most customers to choose the print + digital option, which seemed like a better deal.

• Success: This use of anchoring psychology helped drive higher sales for the most profitable option, by making it appear to be the best value.

"Free Forever" Freemium Model

Example: Mailchimp

• What’s Unusual: Mailchimp offers a "forever free" plan for small users, giving them access to powerful email marketing tools for free until they hit a certain subscriber threshold.

• Success: This free access model allowed Mailchimp to onboard millions of small businesses and entrepreneurs, converting many into paying users over time as their needs grew.

Members-Only Private Sales

Example: Gilt Groupe

• What’s Unusual: Gilt Groupe pioneered the online flash sale model, where exclusive, time-sensitive discounts were offered to members only. This members-only model created a sense of exclusivity and urgency that drove sales.

• Success: The high-end, luxury nature of the products combined with the limited-time discounts attracted a large number of affluent shoppers, allowing Gilt Groupe to carve out a niche in the e-commerce space.

All-Remote Workforce

Example: Automattic (WordPress)

• What’s Unusual: Automattic, the parent company of WordPress, built its entire workforce to operate remotely, even before the remote work trend took off. Their global, distributed team works from anywhere, with no central office.

• Success: This model allowed them to access talent worldwide, reduce overhead costs, and create a highly flexible, innovative company culture that challenged the traditional office-based structure of tech companies.

Buy One, Give One

Example: TOMS Shoes

• What’s Unusual: TOMS built its business on a social enterprise model, where for every pair of shoes sold, another pair is donated to a child in need. This "one-for-one" model was more about impact than profit maximization.

• Success: The social mission behind the model attracted a loyal customer base, and while it started with shoes, TOMS has expanded into eyewear and coffee, all while maintaining the charitable giving aspect.

Free Hardware, Pay for Software

Example: Oculus (early days)

• What’s Unusual: Oculus initially provided their virtual reality hardware at a loss or near-cost, focusing on developers and early adopters, with the goal of monetizing through software sales, content partnerships, and a larger ecosystem.

• Success: This strategy helped Oculus build a loyal developer community and fuel early VR content creation. The focus on creating a software ecosystem eventually contributed to Oculus’ acquisition by Facebook for $2 billion.

Personalized Mass Customization

Example: Nike ID

• What’s Unusual: Nike’s Nike ID service allows customers to design their own customized shoes. The brand mass-produces goods but gives consumers the ability to personalize key elements (color, material, style), blending mass production with individual customization.

• Success: Nike ID catered to consumers’ desire for unique, personalized products while maintaining economies of scale through mass production. It allowed Nike to charge a premium for the service while deepening brand loyalty.

User-Powered Data Exchange

Example: Waze

• What’s Unusual: Waze relies on crowdsourced data from its users to update real-time traffic information, road hazards, and route suggestions. Users actively contribute to improving the app for the entire community, creating a data exchange model that didn’t require traditional data collection infrastructure.

• Success: This crowdsourcing model led Waze to develop one of the most accurate and widely-used navigation apps, which Google later acquired for over $1 billion.

Buy-Now, Pay-Later (BNPL)

Example: Afterpay

• What’s Unusual: Afterpay allows customers to buy products immediately and pay in interest-free installments. The company charges retailers a fee for offering this service rather than relying on consumer interest payments, flipping the conventional credit card model.

• Success: Afterpay’s BNPL model grew rapidly as consumers sought flexible payment options without the burden of high-interest debt. It transformed the retail payment industry, especially among younger consumers.

"Pay With Your Data"

Example: Google Services

• What’s Unusual: Instead of charging users directly, Google offers its services (search, email, maps, etc.) for free in exchange for user data. This data is then used to target advertising, which is Google’s main revenue stream.

• Success: Google’s data-based business model allows them to provide highly personalized services at no direct cost to users, while creating immense value for advertisers. This has become a dominant model in the tech industry, employed by Facebook and others.

Dark Kitchens

Example: Deliveroo

• What’s Unusual: Deliveroo set up "dark kitchens" that don’t have a physical restaurant presence. These kitchens are solely for preparing food for delivery, and they don’t need a front-of-house staff or physical storefront avoiding high costs of a conventional restaurant or fast food outlet.

• Success: This allowed Deliveroo to create a highly efficient, cost-effective operation to service food delivery demands, cutting out many traditional restaurant overheads.

Instant-Return Products

Example: Warby Parker

• What’s Unusual: Warby Parker disrupted the eyewear industry by offering customers a "Home Try-On" program. They send several pairs of glasses to customers for free, allowing them to try them on before purchasing. Unwanted pairs can be sent back at no cost.

• Success: This model gave consumers the confidence to buy eyewear online, traditionally something people prefer to try in-store. It built trust and removed the risk from the purchase process, fueling the company's rapid growth.

Time-Limited Product Life

Example: Seasonal Collections in Fashion (Fast Fashion)

• What’s Unusual: Fast fashion brands like Zara introduced time-limited product lines that mimic high-end runway trends but at a much lower price point. The products are only available for a short period, creating a sense of urgency.

• Success: By pushing out new trends quickly and frequently, fast fashion companies reduce inventory waste and encourage repeat purchases, driving growth in a way traditional fashion houses couldn’t replicate.

Experiential Retail

Example: Glossier

• What’s Unusual: Glossier built a brand that focused heavily on the customer experience in both online and physical spaces. Their retail stores are designed as immersive, Instagram-worthy spaces rather than conventional shops. Customers visit stores to interact with the brand, not just to buy products.

• Success: This experiential approach blurred the lines between e-commerce and brick-and-mortar, creating a loyal community that treats retail spaces as destinations. It turned shopping into a social experience, especially resonating with millennial and Gen Z consumers.

Open Market Lending

Example: LendingClub

• What’s Unusual: LendingClub introduced peer-to-peer lending, where individuals could borrow money directly from other individuals or small institutions, bypassing traditional banks. Lenders earn interest on their investments, while borrowers often receive better rates than from banks.

• Success: This democratized lending and investing, giving both borrowers and investors new opportunities. It also disrupted traditional banking by creating a lower-cost, user-driven alternative.

Hyper-Targeted Micro-Niches

Example: OnlyFans

• What’s Unusual: OnlyFans created a platform where creators could monetize content for a niche audience through subscriptions. Unlike most social media platforms, creators on OnlyFans charge directly for access to their content, often appealing to specific micro-niches.

• Success: This model gave content creators more control over their income, with fans paying directly for access. It disrupted traditional media models by allowing creators to cater to niche markets, bypassing ad-driven revenue streams.

Free Services, Paid Customization

Example: WordPress

• What’s Unusual: WordPress offers its core platform as open-source software, free for anyone to use. However, it monetizes through premium themes, plugins, and hosting services, allowing users to customize their sites for a fee.

• Success: By offering the basic product for free, WordPress captured a massive share of the market and generated revenue from users who wanted advanced features, without alienating those looking for a free solution.

Unlimited Vacation

Example: Netflix

• What’s Unusual: Netflix adopted an "unlimited vacation" policy, where employees could take time off as needed without a formal vacation cap.

• Success: This unconventional HR model gives employees the freedom to manage their work-life balance while focusing on results. By trusting employees to manage their time, Netflix created a high-performance culture, attracting top talent.

Volunteer-Powered Services

Example: Wikipedia

• What’s Unusual: Instead of using paid editors or professional content creators, Wikipedia is entirely driven by volunteers who write, edit, and update content for free.

• Success: Despite being free and volunteer-driven, Wikipedia became the world’s largest online

The "Freemium" Hardware Model

Example: Peloton

• What’s Unusual: Peloton sells high-end exercise bikes and treadmills, but the real value lies in its subscription model, where users pay monthly for live and on-demand fitness classes. The hardware serves as a gateway to lock customers into recurring subscription fees.

• Success: By blending hardware and subscription-based content, Peloton created a lifestyle brand. The high upfront cost of equipment is justified by ongoing engagement and community building through subscriptions, transforming exercise equipment into a media platform.

"Flash Sale" Model

Example: Woot!

• What’s Unusual: Woot! introduced the flash sale model where a single item is offered each day at a steep discount until it sells out. Once sold out, the deal is gone for good, driving impulse buying.

• Success: This model creates urgency, excitement, and a sense of exclusivity. Woot! grew rapidly due to the simplicity of the concept, and was later acquired by Amazon, where it continues to operate.

Bundled Subscriptions

Example: Amazon Prime

• What’s Unusual: Amazon Prime started as a subscription for fast, free shipping, but has since bundled various unrelated services—like streaming video, music, and cloud storage—into the same package. The idea is to offer so much value in different areas that it becomes a no-brainer to subscribe.

• Success: This model keeps customers locked into Amazon’s ecosystem by making the overall subscription too valuable to give up, even if customers only use some of the benefits. This bundling approach has been replicated by others, including Apple One.

Paid-Only Community Access

Example: Patreon

• What’s Unusual: Patreon allows creators to monetize their content by offering exclusive access to paying subscribers, often for niche content that might not thrive on larger platforms.

• Success: This model empowers creators by providing a steady income stream from their most dedicated fans, creating a sustainable model for content creation beyond ad-based revenue. It has enabled many small creators to thrive with a dedicated audience.

Secondhand Resale as a Service

Example: ThredUp

• What’s Unusual: ThredUp offers a platform for buying and selling secondhand clothing. Unlike peer-to-peer marketplaces like eBay, ThredUp acts as a middleman, managing the sale, pricing, and listing process for users.

• Success: This model taps into the growing demand for sustainable fashion, making it easier for consumers to buy and sell used clothing with minimal effort. It simplifies secondhand sales, turning a traditionally cumbersome process into a service.

Gaming as a Platform

Example: Roblox

• What’s Unusual: Instead of being just a gaming company, Roblox is a platform where users create their own games. The company takes a share of in-game transactions, empowering creators to build and profit from their own creations.

• Success: This model democratizes game development, allowing users to become both creators and consumers. It has led to massive user engagement and a thriving ecosystem where Roblox generates revenue from user-generated content.

Hyper-Local Delivery with a Platform Approach

Example: Instacart

• What’s Unusual: Instacart doesn’t own any grocery stores or warehouses. Instead, it relies on local stores for inventory and uses gig workers to fulfill and deliver customer orders, acting purely as a middleman between consumers and retailers.

• Success: Instacart’s platform model allows it to scale quickly without the cost of owning physical stores or logistics infrastructure. This approach disrupted traditional grocery shopping, making home delivery convenient and fast.

Subscription Box with a Curation Twist

Example: Birchbox

• What’s Unusual: Birchbox sends customers a curated selection of beauty samples each month. Subscribers get to try different products before committing to full-size versions, while brands gain direct access to a highly targeted audience.

• Success: This subscription box model gave rise to an entirely new e-commerce category, creating a low-risk way for consumers to discover new products while providing valuable data and exposure for brands.

User Data as Currency

Example: Foursquare

• What’s Unusual: Foursquare provides users with location-based recommendations and allows them to "check-in" to places. While the service is free for consumers, Foursquare collects valuable location data, which is sold to businesses for insights.

• Success: This model created a two-sided marketplace where users benefited from personalized recommendations, and businesses gained access to location data and trends, helping Foursquare thrive despite being free for users.

Rent a Crowd

Example: CrowdFlower (now Figure Eight)

• What’s Unusual: CrowdFlower offers a platform for outsourcing small tasks (such as data labeling or content moderation) to a distributed workforce. Instead of relying on traditional employees, companies "rent" a temporary crowd to complete tasks.

• Success: This model allows businesses to scale their labor needs on demand without the overhead of full-time employees. It disrupted traditional staffing models by providing access to a flexible, global workforce.

Energy Sharing

Example: SonnenCommunity

• What’s Unusual: Sonnen allows homeowners with solar panels to share excess energy with their neighbors through a decentralized network, bypassing traditional energy companies.

• Success: This peer-to-peer energy sharing model disrupted traditional utility companies by creating a more efficient, localized energy system. It also tapped into the sustainability trend, offering consumers a way to reduce their carbon footprint.

Jobs as a Service

Example: Fiverr

• What’s Unusual: Fiverr offers a marketplace where freelancers can sell services starting at just $5, allowing businesses to access low-cost talent for small tasks.

• Success: Fiverr's micro-task model disrupts traditional freelance hiring by offering short-term services in an easy-to-purchase, a la carte format. This made it easier for small businesses and startups to access affordable freelance services.

Data-Driven Tailored Education

Example: Khan Academy

• What’s Unusual: Khan Academy offers free, personalized education through an online platform, using data from user interactions to tailor learning paths. Instead of charging for education, it relies on donations and partnerships to fund its operations.

• Success: This non-profit model flipped the traditional for-profit education system by providing high-quality education for free, disrupting how people think about access to learning and creating new opportunities for students worldwide.