People keep asking, “How do I figure out the best business model of my startup” Let’s qualify the question by replacing “best business model” with “towards a more appropriate business model”.
I always recommend targeting perpetual progression as the ultimate endgame, hence the use of the word “towards”.
The business may be a “never-ending” marathon, which we need to keep “disrupting” our primary business model.
Today, the competition is even more intense. Customers are getting smarter. We simply cannot afford to rest on our laurels.
Back to the Business Model
This is very much dependent on your company strategy/direction, management team, operating model, understanding of available business models, customer journey vs better customer journey etc. and ultimately what’s your “yardstick” for your “most appropriate business model”?
Here are just a few quick “yardsticks” :
- Brand equity (publicity value)
- Revenue-driven (profitability level %)
- Customer satisfaction (net promoter score)
- There are many more…
You probably have to do more heavy lifting to understand similar players and adjacent industries based on your business, to figure out your strengths and gaps to implement the “most appropriate business model” effectively.
Test out 2–3 business models which you think make sense for your business.
Study intently the outcomes from your customers and compare these different business models.
Evaluate based on your “yardstick” and a meaningful timeline.
Actually Angel Investors such as Lenny Rachitsky and early-stage venture capitalists are great sounding board on business models, by virtue of the vast number of businesses they met and assessed. Their feedback carry invaluable insights to the entrepreneurs/business owners.