Startup Business Models

Most of the startups start by doing some sort of viability studies to asses if the adventure is worth to take. I wrote extensive material on this, but is in Portuguese. If it happens you can read Portuguese or can translate it, here it is.

From these analyses the startup founders may have some elements to start designing a business model.

One of these elements is the competitor list. They can use competitors to reverse engineering a business model.

About business model transparency, for example, Buffer is the best I known in keeping transparency about their business model. See it here. There is also something interesting about Buffer and other companies that want to maintain a transparency culture, and they are using Bare Metrics to achieve that beacuse they use Stripe as they payments partner. For the Buffer example, click here to see their Bare Metrics Dashboard

Of course, this transparency depends on the company culture and not all startups are willing to do this, or is not a priority or even possible. However, having a business model well defined is important for every stakeholder (product manager, developers, customer experience, growth team, etc). 

Having the business model shared amongst the stakeholders is important to maintain focus and provide guidance how to run the business. It helps also communicate KPIs between teams. Every person must contribute to some part of the business and people like to see how they are adding value to the business. In my experience I worked with teams of developers that had no clue about the business model. This can hinder the startup because not everyone is working according to the same blueprint.

I like the concept of the Business Canvas as introduced by Alexander Osterwalder.

Screen Shot 2016-05-17 at 11.16.00

….so would be great to see the business model canvas to understand all the startup business. Ideally, it would hang out this on a wall, as I like the visual management approach.

Business Model Canvas on the wall

I own that book since 2013, because I was learning about business models. Interesting to see the startup scene here in London using these techniques. Forward Partners, for example, help entrepreneurs understand their business by doing a Business Model Canvas as a first thing. I understand, because is a really simple way to design and visualize a business.

Business Model Generation book

Bottom line, why I would like to see a business model for the startups I work for?

  • They help everyone to understand the business and create KPIs for the activities, revenue stream, etc that will definitely help making better decisions and improve communication.
  • It shows that the founders have gone through the work of defining their business and are committed to it, by sharing the business model.
  • For the development teams, having a clear view on the business model, help them to independently decide what is best for the business.
  • If something changes on the business model (as isn’t written in stone), everyone will be aware about it, thus contributing to better communication

Please, let me know if there is something I could help here.