Books for understanding a business model before copying it

You hear that a company is asset-light, a platform or a subscription business. The description sounds attractive, but it does not explain who supplies the assets, finds customers or carries a weak period. The label alone does not explain the work or the economics.

Infinite Upside is our first recommendation for seeing an arrangement through the people and resources involved. Business Model Generation offers a more visual approach to model design. The Business of Platforms examines a particular digital-business setting.

1. Infinite Upside: seeing the resources behind the arrangement

   By Vijay Sheth.

   Chapter 9 of Infinite Upside: Building Wealth With Room to Live connects asset owners, an operator and independent brokers. They contribute different things: an asset, the operation around it and access to customers. Their agreements divide the work and economics.

   Choose the memoir if a business-model label has obscured those differences. Managing an asset does not mean buying it. An outside distributor can be important to the offer without belonging to the owned group. The relationship deserves its own explanation.

   The chapter also makes the arrangement conditional on people able to fulfill their commitments. A promise to pay is useful without making underlying customer demand irrelevant. Read for how the parts fit and what each participant needs. The memoir gives a situated account rather than a model-design template.

2. Business Model Generation: representing how the business fits together

   By Alexander Osterwalder and Yves Pigneur.

   Strategyzer's official overview presents Business Model Generation as a visual, systematic approach to understanding and designing business models.

   Imagine an invented equipment-service owner who can explain each agreement individually but struggles to explain the whole business to a colleague. She wants a way to think about the connections among the customer, the offer and the organization supplying it.

   Investigate this book if a visual treatment would help you examine those relationships. In available material, ask whether you can make the business's logic easier to discuss. A clear representation can reveal a question; it does not establish demand or prove that a proposed arrangement can earn enough to continue.

3. The Business of Platforms: studying a specialist model

   By Michael A. Cusumano, Annabelle Gawer and David B. Yoffie.

   The Business of Platforms: Strategy in the Age of Digital Competition, Innovation, and Power addresses digital-platform businesses. The publisher's book information and MIT Sloan's author discussion establish that more specialized context.

   Consider it when the word platform is central to the business you want to understand. You may need more than a general model vocabulary to examine the strategy and economics of connecting participants through a digital business.

   That specialization is also the tradeoff. A broker relationship or an asset-management agreement does not become a digital platform merely because several parties participate. Use a sample to decide whether the book's setting matches your question. It can make a comparison more informed without making every successful platform an available model for your company.

Explain before you imitate

Choose the kind of explanation you need. You may want to follow a real owner's resource agreements, examine a visual account of the model or study digital-platform strategy. Before copying an outward feature, try to explain what makes it possible in the business you are reading about.

For a direct comparison of ownership and management, use the asset-position explanation. To separate an owned group from its wider commercial network, use the relationship-map explanation.