New Internet Business Models: Find Your "Picks and Shovels" Opportunity in the Internet Gold Mine

11/16/2011 11:57 am ET | Updated Jan 16, 2012

Not long ago the term business model was not exactly on the tip of everyone's
tongue. Then, in the early to mid-1990s, business model became a catchphrase
that described how a company makes money or saves money.

For example, suppose a company needs a design for a logo or business card.
The company can create an online contest for graphic artists to compete for the
gig. The success of that business model means that graphic artists and other
service providers need to adapt or suffer serious consequences.

Is this a new business model or a very old one in a new medium and on a
different scale? Hundreds of years ago Renaissance artists competed for the
chance to paint the ceilings of cathedrals. Even today, there are contests among
architects for the design of major projects like the Vietnam War Memorial in
Washington, D.C.

The Internet produces new business models and also reinvents traditional business models.

With regard to "new" business models, the people supplying answers and
support are often the first to make money. That means you can Get Rich Click
by assisting other people in taking advantage of online opportunities. You
become a resource instead of looking for the next "big" idea yourself.

The Picks-and-Shovels Business Model

The standard business model of the 1849 Gold Rush was to mine gold and
then exchange it for currency. For most, the dream didn't pan out. The real
winning business model in the Gold Rush was selling picks and shovels to the

The same scenario exists today on the electronic frontier. Internet "prospectors"
need tools to make money. They need online support in every way, shape and
form. Providing that support can be a winning strategy on the Internet. Online
business models are still evolving. New and different products and services pop
up every day. This gives rise to supporting products and services. A business
can make substantial profit by helping others execute their plans for making

Whenever one or more components of a company's business model changes,
new business models are created for supporting companies. The changes might
involve niches served, new marketing angles or improved value propositions.
One business model can also combine with another to form a completely new
approach to business.

That's where you come in. Look at the services that supported the gold
miners, and the new opportunities you can access by supplying 21st-century
"picks and shovels."