The article “Can One Business Unit Have Two Revenue Models” evaluates how one business has been impacted by holding two revenue models at the same time after company merging. Isolde heads Siiquent, a DNA-sequencing start-up that services Germany’s hospitals with customer-focused support, and responded flippantly to the idea of having a structured revenue model. Isolde’s analogy to a razor blade model where the company makes money on the blade after someone has purchased the shaver is similar to the chemical consumables that her company is selling. Emanuel heads Teomik, which makes advanced research equipment machines, and has a complex revenue model outlined with pricing adapted to environmental and demand influences. Emanuel prides himself in Teomik’s flexibility, in alignment with his revenue model that has evolved to adapt to market changes. Shortly before the merge, Teomik was gaining the support from research labs, as their chemical compounds were becoming more attractive than Siiquent’s.
When the companies were merged into one, and the consideration of keeping both revenue models was brought up, the focus on customers, competitors, and employees is especially prevalent. While imposing the structure of a single revenue model creates order and clarity on what the company is targeting, one of the advantages that a flexible revenue model holds is that it is able to target its customers more directly, making them feel valued and leading to stronger revenue. Additionally, as Isolde mentions in the group meeting, having a flexible revenue model allows the business to adapt to market changes easily. A single revenue model causes a business to hone their attention on one market area or customer base, which may allow them to harness a significant part of that base. Yet, when the base changes, the company would likely struggle, where a flexible revenue model would prevail quickly.
In this situation, Peter was swayed by Isolde and Emanuel’s united front to maintain both revenue models. If I were in the situation to mediate this interaction, I would focus on both of the heads’ desires and motivations for their sides of the company. I believe that the most meaningful way to mediate the merge is to focus on the interests of the heads, as it will empower them to continue with motivation for the joint company mission. Leading the conversation with clear intention to tailor the business around their interests makes the heads feel valued and motivated, as they are not being counted out of the decision.
