When I meet with young startups there is one thing that often springs to mind on the commercial side:
The tendency towards picking a business model on the shelf, often inspired by what others are doing, and settle on that as the model going forward without much further thought than that.
The reasoning seems to be that since others have chosen it (and some perhaps even succeeded with it) it will probably also be good enough for this startup. Plus you get the feeling that you have achieved something and can cross off a to do-item from your long list.
I think this approach is premature and may actually be damaging for the prospects of the startup in the long run.
Because what if the model doesn’t work? Do you just pick another then and repeat the same process? And what if the model, you have chosen, puts investors off because it’s too complex, hard and time consuming to succeed?
Forget about just picking a more or less random business model (I know, it’s not entirely random, but I am sure you get my point, ed.).
Map your go-to-market options out instead, as they relate very closely to a viable business model going forward.
Do a mind map. Put your end user/customer in the center. And then start mapping the various ways you can close a sale with that customer using different models, approaches and value propositions.
Figure out what needs to be true – the key assumptions – for each of the avenues and test the assumptions with customers, experts etc.
With a bit of luck and quite a lot of work you will be able to define the path of least resistance to the customer and notably to the customers wallet.
And that’s exactly what you need. That’s your future business model. Developed and understood by you, so you can effectively go and execute on it. Not something just taken from a shelf that you actually may have very little idea about how to make work for you and your startup.
(Photo by Tom Ramalho on Unsplash)