Not Without a Business Model: Why “Just Do It” is Not a Good Advice
Customer benefit, profit model, available resources: these are not the only important aspects that are often neglected when you and your friends come up with the new Facebook. Nonetheless, social media accounts with the new company names are set up first. Often, there's a lack of a larger perspective - a business model can help with that.
The AftermathTwo new domains were secured, Facebook and Twitter profiles, as well as a YouTube channel, were created. The search for license-free images for the future website had already started. What happened? In the evening, after the workout, a group of friends drank some beer together, and came up with "the best idea ever"! Sadly, most of the time, it stays an idea, and the hot flame of motivation turns into a cold lump of disappointment.
Risk: Having an Idea and Just Doing itOften, between a good idea and getting started, there's only one intermediate step missing - but it's an important one. If the action is not taken, there's a risk of the entire project freezing up. An example: the idea "online shop for t-shirts with cute cats" via a ready to use t-shirt order form template may seem like a way to make money off of the cat video hype. And friend 1 watches a lot of YouTube videos so that he can start an own channel tomorrow - a compilation of the best videos. Friend 2 was pretty good at drawing in college, so he'll do the graphics. There's also a ton of cat images on the internet so that you could print these. Friend 3 is a social media connoisseur and knows that cat content does great. Visitors will get to the online shop via Facebook and Youtube, and the t-shirts will sell like hot cakes! But is all of that enough for three people to at least make some decent money on the side? Were the resources evaluated properly, was the market observed, the unique added value underlined? No. Chances of this project getting stuck and given up are very high. The decisive step before starting is missing: the idea has to be turned into a sustainable business model.
Necessary: Viable Business ModelA good idea has to be embedded in a good business model. That's the ideal. A common witticism on the topic goes like this: "It's easier to realize a bad idea with a good business model than the best idea without one." Unfortunately, the author is unknown but deserves a flower bouquet.
Four Main Elements of Business Models According to StählerPatrick Stähler, author of "Founding the Right Thing. Toolbox for Entrepreneurs.", says that a good business model addresses four key elements. Here, all of them are equally important and closely connected to each other.
- The value proposition, the promise to the customer, to solve an individual problem. Also: what impresses the client? This is where the added value is.
- The business structure – here's where the product comes in, but marketing channels, production, and advertisement belong to this element.
- The profit model that shows, how exactly money is made, as well as
- the entrepreneurship.
- It helps people achieve their goals because they can't do it alone
- It helps them achieve their goals faster
- It positions you as an expert who's been there done that.