Which Business Model Is Better for Your Investment?

In the Igbo Nation, when a person dreams of fetching water or going to the stream to fetch water, it is a sign of something good coming. The road to the stream is never covered by weeds because in seasons and out of seasons, communities and villages need water, and they have to go to the stream. Fetching water in Igbo mythology is a sign of vitality and abundance.

But when a person dreams of going to fetch firewood on a farm, it is a sign of something bad. Yes, after the firewoods are gone, the weeds take over the road. So, you want to be fetching water over fetching firewood as it means there is a future.

Take this construct to business model and I have two cases:

A: Hire ten great movie producers to produce 200 short videos for your digital platform over 12 months (Quibi like). Quibi was a media company that developed media content (mainly short videos) designed for smartphones.

B: Allow tens of thousands of amateur creators, and use an AI to select the best videos daily and distribute them massively in your platform (TikTok like).

If you are an investor, which one would you invest in? And why?

How I see it: In 2000, Option A would have been a good business because the computing resources to run AI and crunch the numbers were not (commonly) available for Option B. But with cloud computing and the age of AI here, Option B wins. The probability of getting a hit video compounds in Option B while A is limited by the insights of just 10 people; virality is key for short movies. That is why TikTok will remain a better business than Quibi which has gone bankrupt.

Comment on Feed

Comment 1: @Ndubuisi Ekekwe, not just that but we live in the generation of social media and TikTok is more of a social media video site than a short Movie site(Quibi). Even with AI, I would argue quibi could have been successful however their timing was off(pandemic), their competition was free(Majorly YouTube) and worst of all, they are not even loaded!!!

Amazon Prime movies, Disney+ and lots of other Netflix competitors should have been out of the game by now but they are all flush with cash which keeps them in the competition.

If Quibi was cash flush, able to (or lucky to, whichever you prefer) hit a goldmine of 3 or 4 hit short series that goes mainstream and managed to convince a bigger startup to buy them out or go it alone(again cash flush), they could have turned into a short movie platform that produces 10-20 minute inspiring movies that gets people talking every time it comes out(go checkout some of the short movies that have won awards lately with incredibly moving messages).

My Response: ” If Quibi was cash flush,” You made it look like Quibi was that poor startup. This company raised $1.8 billion. What do you mean if it had cash? Every company you listed did not have that type of funding before launch. Simply, Quibi’s death was not a lack of cash but a business model problem. How many companies in the world raised $1.8billion before getting a dime from customers?

Comment 2: As an investor, I would consider the AI-selected contents created by amateurs for a number of reasons: 1. A higher scale of productivity as there will be a wider range of contents to choose from 2. These amateurs can bring lot of creativity because of the out-of-the-box, less traditional thinking 3. The AI trained based on the highest standard of acceptance criteria will filter the best out for distribution. 4. The AI-filtered generated contents can cater to diverse viewership which means wider reach and greater revenue 5. The Use of amateur is cheaper . We know of how remunerative models by existing models. 6. The speed to market is also achieved by AI unconstrained by time. That can confer both leverage and first-mover advantage. Overall, the investor’s goals achieving of sustainable profit, prolific contents, mass/wider appeal or spread, speed and cost efficiency are better served in the most dynamic ways. My perspective!

Comment 3: I will opt for B, because the amateurs of today will be more passionate and eager to be recognized in the line of business to make names and become known brands… The Nigerian teams constituted of amateurs won more trophies in 1985, 87, 93 etc than the professionals who have consistently brought us shame and disgrace in age group competitions and world cup…

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