The difference between market takers and market makers isn’t product innovation, it’s business model innovation. ~Vala Afshar, Salesforce
A business model describes how your company creates, delivers, and captures value. ~ Steve Blank, Stanford
Your business could fail without a business model. So why don’t people want to talk about it? Me, I can talk about them all night. It’s one of my favorite topics. But let’s be honest, it’s definitely not everyone’s thing. No, that would be marketing or branding. And that brings me to one of the biggest mistakes I see in business. People start or focus on the so-called “fun stuff” and never or barely attend to things like business models.
The quickest way to fail your company is to do the marketing first.
Marketing and branding is an early activity, but not the first thing you should do. Why build a website if you don’t even know who your ideal buyer is?
The good news is, business model creation has come a long way and it’s far from a boring task. Business experts no longer endorse the long, unwieldy 20+ page business plan anymore. We can get everything we need on one page. That’s right, the one-page business model (or canvas in some circles), is how the best new companies create their businesses.
One Page To Rule Them All
The idea is simple. Create one page to document all the major parts of a business. As you learn more about the business and market, you keep updating that one-pager. This model evolves over time as the business does.
I was completely on deck with this for years until I, like many others, I discovered that the most popular model was flawed. It seemed to cater to one type of business better than others. It also had a few components that only made sense to bigger companies, but not to those just starting out.
That’s when Ash Mauyra stepped in and improved upon The Business Model Canvas to create his own Lean Canvas. It’s great for tech startups. Other authors created different types of models that work well too, so there has not been one universal business model template that serves every business, industry, or company phase.
Learning From Failure
To me, the thing that was missing in business model templates was most were based on components that made companies succeed. That made complete sense, but it also dawned on me that we should learn from startups who satisfied all these vital components but still failed. Studying CB Insight‘s research on 101 startup failures made it quite clear what was missing in most business models.
Armed with that information, I created my own business model template that included the top components any business needs to succeed (especially startups) and the top components that would lead to failure if they weren’t satisfied.
I call this The Business Model Worksheet, or BMW for short. Below is the basic idea of this model. Also, I’ll include a link to an article unpacking some of the BMW’s ideas and more on why it was needed in business education. This article was featured in Medium’s #1 business periodical, The Startup.
Prevent Business Failure: Get The BMW
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