Taxonomy of Business Models
Shift from Pipes to Platforms
Sangeet Paul Choudary (2013) distinguishes between two broad families of business models in an article on Wired Magazine. Choudary, of Platform Thinking, contrasts Pipes, linear business models, with Platforms, networked business models. In the case of Pipes, firms create stuff, push them out and sell them to customers. Value is produced upstream and consumed downstream. There is a linear flow, much like water flowing through a pipe. Unlike pipes, platforms do not just create and push stuff out. They allow users to create and consume value.