Business models, in depth

When thinking about starting a business, entrepreneurs are typically faced with the imperative of a groundbreaking idea đź’Ąđź’ˇ. Then comes the hype about the imagined product or service and only after that does the customer come into the picture, often in an abstract, narrow consideration focused on their purchasing power.

The more experienced entrepreneurs, as well as leading authors in the field, focus instead on the product-customer fit. This is an undoubtedly necessary but not sufficient consideration.

You could have the best product-market fit and yet set out on a project which has no chance to succeed because you failed in selecting the right channels, client relationships, revenue model, cost structure, resource allocation, or because you incurred unnecessary risks.

The business model is more important than the idea or the product/service – even though the entrepreneur usually falls in love with the latter 🤷.

The focus should be put on satisfying a need at lower cost or with improved performance to beat existing market alternatives – or both, as is the case of the “blue ocean” strategy.

Let's take a look at Netflix and Blockbuster, two clarifying examples of disruption achieved by implementing changes in the business model or rolling out a new one.

In the future, companies will only thrive if they are focused on a dynamic business model, unconstrained by the limits of a certain industry, product or service.

Hit the “Next Unit” button below to move forward to the next step of our methodology, where we get down to the nitty-gritty of model testing and validation.

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Purpose and strategy

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Business models

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Find your customers

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Your customer as co-creator

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Find your customers

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