Amazon & Business Model Design from Tim Kastelle on Vimeo.

To summarise my main point: the business model for amazon.com did not become profitable until they were doing all three functions necessary in an information-based industry: Aggregate, Filter & Connect. Yesterday I talked about the importance of filtering in scientific publishing business models – but for amazon, the key function is connecting. In particular, the killer app for amazon is their relational database – this allows them to connect related items for people. Amazon was always good at aggregating, and they’ve tried a few different filtering methods, which have all been reasonably effective. But it was only when they added connecting that their business model took off.