The best business models align all stakeholders needs

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Introduction

Business success is often closely tied to how well a company aligns incentives across various stakeholders. The most effective business models are those that create a symbiotic relationship, ensuring that the interests of customers, employees, investors, and other stakeholders are aligned. This article explores the significance of incentive alignment in business models and showcases examples of companies that have mastered the art of aligning incentives for mutual benefit.

What is alignment?

A business model is aligned when all stakeholders benefit from it. For instance, Google search was aligned as it provided value both for search users and advertisers. This does not mean that a business cannot get unaligned after some time, as Google search did.

Another good case of alignment is fintech which only makes money when their customers make money. This is the case for Woovi, we only make money when our customers receive a new payment.

Study Case of QuintoAndar

QuintoAndar is a marketplace that connects landlords with tenants. Before QuintoAndar, other platforms only focused their business model on landlords. They make money selling ads for landlord’s properties to rent them faster. The problem with this business model is that the platforms do not have any incentive to make the renting process easy or faster, because they earn money if someone rents or does not rent the property.

QuintoAndar took a different approach and decided to earn money only when the tenant rented a property. This aligned both landlords’ and tenants’ objectives and enabled QuintoAndar to provide the best experience and renting process for both landlords and tenants. QuintoAndar provides the best and most powerful search experience to find the exact property you are looking for. The renting process and contract are all digital and easy to do. The process of adding a new property is easy for the landlords. They also aligned with brokers to make the process better.

A better alignment business model enabled QuintoAndar to earn money from both parties.

To sum up

When designing your business model make sure to align it with all important stakeholders of your product.

You should earn money only when you generate value for your customers:

• when you reduce costs

• when you increase revenue

• when you save time

• when you reduce operational work