Self-Motivation
David Goggins
Former Navy Seal
Career Development
Bryan Cranston
Actor
Critical Thinking
Liv Boeree
International Poker Champion
Emotional Intelligence
Amaryllis Fox
Former CIA Clandestine Operative
Management
Chris Hadfield
Retired Canadian Astronaut & Author
Learn
from the world's big
thinkers
Start Learning

Business revolution: What is the membership economy?

The membership economy is upending how businesses are structured and how they deliver value to customers.

ROBBIE KELLMAN BAXTER: The membership economy is a term that I coined to describe what I was seeing, starting about 15 years ago when I was working with Netflix and continuing into this massive transformational trend where companies of all types were moving from a model that focuses on ownership to access, from the transactional to the relational, from anonymous to known, from one payment to many smaller payments and from the organization talking at the customer and hoping they're listening to multidirectional communication among customers and back and forth between the customers and the organization under the brand umbrella of the organization. So when you put all of those things together you have this kind of painter's palette to reinvent your business model and that's what's driving this membership economy.

So membership isn't a new concept. We have been joining things for as long as there have been humans. We joined clans or tribes. We've had professional societies and trade guilds for centuries. Charles Dickens sold his novels in subscription format so people subscribed to have access and as he had the chapters done he would deliver them to his subscribers. So this is not a new concept, but what has changed is the ability to build a business model around it that transcends time and space. So Charles Dickens actually had to know the people he was delivering to, had to print it out, had to bring it to them. Today we can deliver it to strangers digitally and we can do it with time lapse. So that has created so many possibilities for organizations to build this ongoing relationship, which is what people want.

One example of the difference between a membership economy company and a non-membership economy company is the comparison between Blockbuster and Netflix. So when people, you know, way back when people used to have to go to the corner store to the Blockbuster on a Friday night to see what movies were available to rent, bring them home and it was never the movie that you really wanted. it was whatever happened to be available. And then if you forgot that you had it and you kept it for a few extra days the cost would end up being like triple what you thought it was going to be. And compare that to Netflix where they sent you three DVDs at a time, so three movies that you had on your long list, your queue. You didn't have to leave your home. You always had three movies at home. And, best of all no late fees. So it's a very different way of thinking about the model that starts with a forever promise. A promise of what it is that you really want to achieve.

So in the case of Netflix versus Blockbuster, which was what really inspired me, what I wanted was to always have movies, professionally created content delivered in the most efficient way possible because I had little babies, with cost certainty—no late fees. And that's what Netflix delivered on 15 years ago that pretty much put Blockbuster out of business. And today even though they have streaming, even though they create their own content, even though a lot has changed at Netflix they still deliver everyday on that promise of professionally created content delivered with cost certainty in the most efficient way possible.

I think that the membership economy is having as big an impact on business as the industrial revolution. What I see is a new way of engaging with the customer, a new set of skills that are required for the professional and a new way for entrepreneurs and business leaders to design the entire model from the ground up. It's creating new businesses everywhere. There are literally hundreds, if not thousands, of new companies that are built in this model. Subscription box businesses, digital content. The reason is that you can start as a solopreneur, as a one-person shop, and you can expand very, very rapidly in many cases because of the ability to share your digital assets widely and the ability to send content or physical products directly to the customer, taking out the middleman. So it's really a rethinking of how businesses are structured and how they deliver value.

  • "I think that the membership economy is having as big an impact on business as the industrial revolution," says Silicon Valley consultant Robbie Kellman Baxter.
  • Memberships or subscriptions fundamentally change the relationship between the consumer and the brand by delivering what Baxter calls a "forever promise." The famous example of Blockbuster vs. Netflix illustrates this perfectly.
  • Subscriptions are not a new idea. Charles Dickens released his books to subscribers one chapter at a time, as he wrote them. What's different today is technology and the speed at which even a one-person business can reach a huge number of customers.


The “new normal” paradox: What COVID-19 has revealed about higher education

Higher education faces challenges that are unlike any other industry. What path will ASU, and universities like ASU, take in a post-COVID world?

Photo: Luis Robayo/AFP via Getty Images
Sponsored by Charles Koch Foundation
  • Everywhere you turn, the idea that coronavirus has brought on a "new normal" is present and true. But for higher education, COVID-19 exposes a long list of pernicious old problems more than it presents new problems.
  • It was widely known, yet ignored, that digital instruction must be embraced. When combined with traditional, in-person teaching, it can enhance student learning outcomes at scale.
  • COVID-19 has forced institutions to understand that far too many higher education outcomes are determined by a student's family income, and in the context of COVID-19 this means that lower-income students, first-generation students and students of color will be disproportionately afflicted.
Keep reading Show less

Dinosaur bone? Meteorite? These men's wedding bands are a real break from boredom.

Manly Bands wanted to improve on mens' wedding bands. Mission accomplished.

Sex & Relationships
  • Manly Bands was founded in 2016 to provide better options and customer service in men's wedding bands.
  • Unique materials include antler, dinosaur bones, meteorite, tungsten, and whiskey barrels.
  • The company donates a portion of profits to charity every month.
Keep reading Show less

What if Middle-earth was in Pakistan?

Iranian Tolkien scholar finds intriguing parallels between subcontinental geography and famous map of Middle-earth.

Image: Mohammad Reza Kamali, reproduced with kind permission
Strange Maps
  • J.R.R. Tolkien hinted that his stories are set in a really ancient version of Europe.
  • But a fantasy realm can be inspired by a variety of places; and perhaps so is Tolkien's world.
  • These intriguing similarities with Asian topography show that it may be time to 'decolonise' Middle-earth.
Keep reading Show less

NASA releases first sounds ever captured on Mars

On Friday, NASA's InSight Mars lander captured and transmitted historic audio from the red planet.

NASA
Surprising Science
  • The audio captured by the lander is of Martian winds blowing at an estimated 10 to 15 mph.
  • It was taken by the InSight Mars lander, which is designed to help scientists learn more about the formation of rocky planets, and possibly discover liquid water on Mars.
  • Microphones are essentially an "extra sense" that scientists can use during experiments on other planets.
Keep reading Show less

Giant whale sharks have teeth on their eyeballs

The ocean's largest shark relies on vision more than previously believed.

Photo by Koichi Kamoshida/Getty Images
Surprising Science
  • Japanese researchers discovered that the whale shark has "tiny teeth"—dermal denticles—protecting its eyes from abrasion.
  • They also found the shark is able to retract its eyeball into the eye socket.
  • Their research confirms that this giant fish relies on vision more than previously believed.
Keep reading Show less
Quantcast