Today we will be discussing about Tim O’Reillys 8th pattern Lightweight models and cost effective scalability. Lightweight models means easy integration with other systems and cost effective scalability means the delivery of services, not packaged software.
To illustrate this pattern, I will be talking about Instagram.
In short Instagram is a popular photo capturing app which allows you to apply filters and enhance your photos to certain extent. Instagrams lightweight model example is shown by its capability to integrate with popular social networks such as Facebook, Twitter, Tumblr, Flickr and Foursquare.
As with any software and application you want to able to scale your business model and the technology at the same time. With over 200 million active users permonth Instagram has definitely had to scale their technology to meet this business model.
Syndicate business models:
Instagram was bought by Facebook for $1Billion US Dollars in mid 2012 and does not have any type of premium services. Instagram also leverages on the network effect this is done by integration with popular social networks and next is by word of mouth. Due to its ever increasing user base, Instagram has become a very valuable application.
Scale your pricing and revenue models:
Instagram has been a free service since its launch and does not yet have a revenue model.Instagrams attempt to make revenue by selling users photo was not successful in 2013. But there are few ways how Instagram can make revenue as told by Dan Frommer from Business Insider:
- Charge for “pro” or “premium” features, either as one-time sales or subscriptions.
- Display advertising or sponsored photos.
- Charge developers to use its APIs.
- Charge consumers to download the Instagram app or use the service.
Craig Smith (2014). Interesting Instagram facts. Retrieved from http://expandedramblings.com/index.php/important-instagram-stats/#.U4HjcZSSz-g
Dan Frommer (2014). Instagrams growth is amazing: Heres how it can make money. Retrieved from: http://www.businessinsider.com.au/instagram-revenue-2011-6
Peter Nowak (2013) 100 Million user yet no revenue. Retrieved from https://ca.finance.yahoo.com/blogs/dashboard/instagram-100-million-users-yet-no-revenue-193855273.html