90's Business Models Remain the Best
Is it true that the 90’s business model remains the best?
The business model, according to Timmers (1998), is “an architecture of the product, service, and information flows, including a description of the various business actors and their roles, a description of the potential benefits for the various business actors, and a description of the sources of revenues.” A business model is a simplified representation of a profit-oriented venture that encompasses all of its major features in relationships.
The business model, on the other hand, which been defined by Chesbrough and Rosenblom (2002) known as “the heuristic logic that connects technical potential with the achievement of economic value.” Their opinions emphasized the business model that creates a logical framework that takes technological qualities and potentials as inputs and translates them into economic outputs through consumers and markets.
But is it true that the 90’s business model to be proclaimed as the best of all time? According to the research conducted by Zott in an article entitled The Business Model: Recent Developments and Future Research, the business model notion gained traction during the dot-com boom of the 1990s, and there has been a flurry of recent research on it. During the late 1990s bull market, investments in Internet-based companies supported the dot-com bubble, which saw a rapid rise in U.S. technology stock equity prices. Between 1995 and 2000, the value of equity markets grew at an exponential rate, with the technology-dominated Nasdaq index rising from under 1,000 to over 5,000. The dot-com boom implies that people are starting to utilize in using technology for their market sustainability.
However, things began to shift in 2000, and the bubble burst between 2001 and 2002, resulting in a bear market for stocks. In the corporate world, the Internet induced exhilaration and sparked many aspirations for the future of online trade during the late ninetieth century. As a result, many Internet companies (also known as “dot-coms”) were founded, with investors expecting a company that ran online to be worth millions of dollars.
In general, society’s expectations of what the Internet could bring in the mid-to-late-’90s were unrealistic. Internet entrepreneurs, from individual dreamers to huge organizations, were captivated by the prospect of becoming dot-com millionaires (or billionaires). Amazon, eBay, and Kozmo have all influenced these startups. Of course, for every multi-million-dollar company that succeeds, there are hundreds more that fail. “Unlike the dotcom in the late 1990s, where both small-cap and large-cap equities greatly outperformed the average company, that is not happening in the small-cap universe,” Jim Paulsen said in an interview with CNBC.
With all the historical tell-tale on the 90’s business model, it is not right to proclaim it as entirely the best or entirely the worst. The positive aspects of the 1990s business model can be re-created or adjusted, resulting in a subtle shift and paving the way for a more sustainable business model approach.