6.2 Quiz: Business Models on the Web (EN&NL)

Question 1

Most crowdfunding platforms work on the basis of a transaction fee revenue model.

Answer 1

True

Funding your projects by a multitude of people contributing a
small amount in order to attain a certain monetary goal
 Examples:
 Kickstarter  IndieGoGo

Question 2

There will never be more than 21 million bitcoins.

Answer 2

True; The cap on the total supply is intended to create scarcity and prevent inflation, similar to the way precious metals like gold have a limited supply.

in 2033 expected bitcoin amount 21 mill (bitcoin started in 2009)

Question 3

The manufacturer-direct model entails that a company sells products directly to end customers through online sales channels such as eg. a webshop or app.

Answer 3

True
Manufacturer-direct: Manufacturer using online channel to sell
directly to customers  Dell

Question 4

Amazon Mechanical Turk is a good example of a social-cause crowdfunding platform.

Answer 4

False

Amazon Mechanical Turk is a marketplace for tasks that require human intelligence
Social-cause crowdfunding platforms, on the other hand, are websites or platforms that allow individuals, nonprofits, or other organizations to raise funds for specific social causes or projects.

Question 5

Regulation is a major issue in equity crowdfunding. Fortunately, the JOBS Act was quickly voted in Europe so that equity crowdfunding became better regulated.

Answer 5

False; US

The JOBS Act (Jumpstart Our Business Startups Act) is a U.S. legislation that was signed into law in 2012. It primarily aimed to ease regulations on securities offerings to facilitate capital formation for small businesses, including provisions related to crowdfunding.

In Europe, the regulatory landscape for crowdfunding, including equity crowdfunding, varies from country to country.
in belgium; Since 2014, a federal law made it possible to raise up to 300k€ per project via crowdfunding as long as crowd investors’ individual investments remained below €1000, without prospectus

Question 6

Proof-of-work means that you can approve transactions as soon as you have enough bitcoins.

Answer 6

False; A node needs to proof that it has put enough computing resources to solve the

having bitcoins may be related to participating in transactions on the network, the approval or validation of transactions in a PoW system is tied to the computational work performed by miners, not the possession of bitcoins.

Question 7

The technology that PayPal uses is largely similar to the technology behind Bitcoin. A network of nodes will verify transactions.

Answer 7

False; while both PayPal and Bitcoin involve digital transactions, PayPal is a centralized system that uses its internal servers for transaction verification, while Bitcoin operates on a decentralized blockchain network with a consensus mechanism involving a network of nodes.

Question 8

The main difference between a Private Industrial Network (PIN) and B2B e-marketplaces is the openness of the system. Typically, PINs involve a limited number of partners to set up highly efficient supply chains.

Answer 8

True
Degreeofopenness
 Public markets: anyone can enter as a supplier or buyer
 Private markets: entry by invitation

Question 9

In surge pricing, an automatic system determines the price of a product or service. Based on data analysis, this technology will estimate supply and demand and thus determine the price in real-time in order to generate maximum return.

Answer 9

True

Question 10

Nowadays, almost all Belgian retailers such as Colruyt, Delhaize, etc., are virtual merchants. After all, they sell some of their products completely online, in addition to their traditional physical stores.

Answer 10

False;

1) E-tailer

 Virtual merchants: online version of a retail store: Amazon, iTunes, etc.
 Clicks-and-mortar: online distribution channel for a company with physical stores
Delhaize, Colruyt, Zara, …
 Catalog merchants: Online version of a direct mail catalog
Argos (UK)
 Manufacturer-direct: Manufacturer using online channel to sell
directly to customers Dell

Question 11

The market maker business model is not very popular in B2C because such companies typically have difficulties in setting up a suitable revenue model.

Answer 11

False

Overview of B2C business models
1) E-tailer: online retail store selling products
2) Service provider: Offers services online (instead of products)
3) Community provider: creator of an online environment where people can share interests, communicate, and transact (buy and sell goods)
4) Content provider: distributor of information content, e.g. news, music, video, art, etc.
5) Portal: offering search tools and integrated package of services (e.g. e-mail, calendar, news, etc.)
6) Transaction broker: online service that processes transactions for consumers that are normally handled in person or by mail
7) Market maker: builder of a digital environment where buyers and sellers can meet and do business

Question 12

The underlying data structure of the Bitcoin system is based on blockchain. A blockchain is a database that consists of blocks of data connected to each other. In addition to transactions, each block also contains a hash of the previous block, the nonce, and a timestamp.

Answer 12

True

Question 13

We use the term “bitcoin mining” because miners are rewarded with bitcoins when they are able to confirm a block of transactions and add them to the blockchain.

Answer 13

True

Question 14

An e-distributor differs from an e-procurement company in that e-distributors typically sell direct inputs, while e-procurement focuses on indirect materials.

Answer 14

False;

1) E-distributor  One seller, many buyers
* Sell-sideB2B

2) E-procurement
* Buy-sideB2B
 One buyer, many sellers

Question 15

With equity crowdfunding, you as an investor become co-owner of a start-up.

Answer 15

True

3. Equity crowdfunding
   * Funders become co-owners, long term investors
   * Higher potential gains, greater risks * Regulationproblem

Question 16

The total amount of bitcoins has increased exponentially because the number is directly proportional to the price of a bitcoin.

Answer 16

False;
The issuance of new bitcoins is controlled by the process of mining, where miners solve complex mathematical problems to add new blocks to the blockchain and, in turn, receive newly created bitcoins as a reward.

The price of a bitcoin, on the other hand, is determined by market forces such as supply and demand dynamics, investor sentiment, market adoption, and various economic factors. While there can be a relationship between the total supply of bitcoins and their price, it is not a direct and simple proportionality. The market price of bitcoin is influenced by a wide range of factors beyond its fixed supply.

Question 17

With a freemium revenue model, a company will offer a product or service for free, but at the same time have some of its customers pay a subscription fee to gain access to additional features of the product or service.

Answer 17

True

Freemium strategy
* Special type of subscription model
* Company offers a certain level of product or services for free, but charges a subscription fee for premium levels of the product or service
* Examples: Dropbox, LinkedIn, Spotify, …

Question 18

Intrinsically you only need a private key to spend bitcoins.

Answer 18

True

the private key is crucial for spending bitcoins, the corresponding public key and Bitcoin address are also involved in the transaction process. The public key and address are shared publicly, allowing others to send bitcoins to that address. However, spending bitcoins requires the private key to sign transactions securely. Keeping the private key secure is essential to maintaining ownership and control over your bitcoins.

Question 19

A reverse auction has one buyer and multiple sellers.

Answer 19

True ;
Forward vs. reverse auctions
 Forward auctions: auctions that sellers use as a selling channel to many potential buyers; items are placed at sites for auction and buyers bid continuously for the items.
 Reverse auctions: have one buyer, usually an organisation, that wants to buy a product/service; suppliers are invited to submit bids.

Question 20

Companies will always use business models based on one type of revenue model. Revenue model combinations are rare, and certainly not online.

Answer 20

False; there are common models

Many companies employ a variety of revenue models, and revenue model combinations are not uncommon, both online and offline.

Question 21

Synonyms for debt crowdfunding are Peer-to-Peer lending and Peer-to-Business lending.

Answer 21

True

Question 22

In the Bitcoin system, everyone can know how much bitcoin each individual address has because everyone has access to the full transaction history.

Answer 22

True

Question 22

The Keep-it-All investment allocation model (or funding allocation model) used by crowdfunding platforms generally leads to greater success of projects than the All or Nothing model because there is more certainty for the entrepreneur that he or she can start effectively.

Answer 22

False; Two basic funding allocation models * AllorNothing(AoN)
 When the fund-raising period is over, money is only collected from the contributors if a pre-determined minimum amount of money has been pledged. If the goal is not met, no money is collected.
* Keep it All (KiA)
 Whether the project goal is met or not, all of the funds collected (minus commission) are handed over to the entrepreneur.
* Research has indicated that AoN-projects are more successful than KiA-projects

Question 23

Exchanges as a business model in B2B are very successful. These market makers typically provide strategic benefits to both buyers and sellers.

Answer 23

False;
* Typically biased towards the buyer

Question 24

EDI technology is still used today, but companies are increasingly switching to XML-based technology, especially web services.

Answer 24

True

Question 25

E-procurement is also often referred to as sell-side B2B because one buyer interacts with different sellers.

Answer 25

False;
e-procurement is associated with buy-side B2B, where a buyer interacts with different sellers or suppliers to fulfill their procurement needs.

Question 26

In donation-based crowdfunding, as a donor you expect to receive a small gadget or the first version of the product that will be developed.

Answer 26

False;
1. Donation crowdfunding * Social projects, non-profit
* Contributors:philantropistprofiles,intrinsicmotivation to do something good
* GoFundMe,YouCaring,etc.
* Typically smaller projects, up to €25.000

Question 27

B2B e-marketplaces are typically subdivided based on the type of transactions that are performed (spot buying vs. long term sourcing) and the type of products that are traded (direct vs. indirect / MRO).

Answer 27

True;

Types of B2B e-Marketplaces
* Types of transactions:
 Spot buying: the purchase of goods and services as they are needed, usually at prevailing market prices
 Longterm sourcing: purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers, with agreed upon terms and quality
* Types of materials traded:
 Direct materials: materials used in the production of a product
(e.g., steel in a car or paper in a book)
 Indirect materials: materials used to support production (e.g. office supplies or light bulbs)
 MRO (maintenance, repair, and operation): indirect materials used in activities that support production

Question 28

A big advantage of EDI is vendor lock-in. In particular, partners create a strategic advantage by binding themselves to each other in the long term.

Answer 28

False; disadvantage
Risk of EDI vendor lock-in
Shift away from using private communication networks and proprietary hardware/software towards using Internet technologies

one of the advantages of EDI is its ability to foster interoperability and standardization, allowing businesses to exchange documents with various partners regardless of the specific EDI software or systems they use. This interoperability promotes flexibility and the ability to work with multiple trading partners without being tied to a single vendor.