Business Thinking for Designers

Business models 
A business model is an outline of how a company intends to 
create and capture value. It describes what will be valuable 
to customers, how that value will be produced and delivered, 
and why it will generate revenue for the company. This outline 
is not only a foundation upon which business decisions are 
made, it’s also an effective description of the values designers 
are expected to help provide, so it’s important to understand 
the model you’re working in.
Selling products online—a.k.a. e-commerce—is a popular 
model in the digital world. They typically fall into one of 
three categories with matching acronyms. B2C businesses 
sell directly “2” Consumers. B2B indicates selling to other 
Businesses. And B2G is when you sell to Governments. In 
recent years, there’s also been the addition of C2C, in which 
consumers sell to one another via platforms like eBay or 
Indiegogo. 
Within these e-commerce categories, business models vary 
significantly, as entrepreneurs have adapted successful offline 
models to work online. Examples include:
• Freemium – Giving a product or service away for free, then 
charging later when customers need additional features or 

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Explore business concepts
services to get the most use out of the product. Examples 
include Mailchimp, Slack, or Skype.
• Marketplace – A platform where a fee or percentage of 
a sale is taken in without managing the inventory being 
exchanged in the sale. Airbnb and Etsy are e-commerce 
marketplaces that could be compared to a farmer’s market 
or flea market in the physical world.
• Subscription – In exchange for a regular fee, customers 
have ongoing access to a product or service. Think Netflix, 
Spotify, Orangetheory, or your local paper.