Business Model Generation

If you have finally decided to launch the company that was going around in your head for so long, but you have no idea how to begin, in this article I will share a guide on how to build a startup in modern times. The objective is to apply some startup principles, thinking about design, business model generation canvas, customer development and other methodologies of the new wave of entrepreneurship.

Starting Your Own Business

Before entering in detail, it is important to get in our head some ideas that for years have tormented most entrepreneurs, and often represent the main stumbling blocks and obstacles when starting a business.

Product Development: The most important thing is to have a perfect product: the traditional methodologies of entrepreneurship are focused on product development, i.e. to invest much time in planning in order to anticipate every detail and create perfect products that are sure to be a hit in the market.

Moreover, venture lightweight methodologies focus on client development and are based on the philosophy of Fail fast, fail early, but above all, fail cheap. The product ceases to be the center of everything and becomes just another element of the business model.

Develop a business plan is a guarantee of success: Create a good business plan is not equal to a good business plan, but guides traditional entrepreneurship and some experts in creating companies see business plans as a magic tool that ensures business success.

Modern times are extremely dynamic and changing, and then it is very difficult to develop a document that shows in detail what will happen to your business in the next 3 to 5 years. In addition, the business plans are too rigid, and when an entrepreneur starts their company does not have all the answers. The entrepreneur is really looking for a business model.

Business Model Generation

Steps to start a business model Generation

Create a winning team

When I began to study the subject of entrepreneurship, used to believe that the most important was the business idea or money, but today, more than ever, I firmly convinced that the most important thing is to have a team of passionate people willing to give everything and fight with determination.
The first step is to find people with multidisciplinary profiles, complementary skills and with the firm conviction of the challenge of creating company. Do not focus only on the talents, but find people with values ​​that are willing to go the extra mile to make a difference in the business world.

Identify a problem to solve

Regardless or not you have a business idea, it is important that you analyze your initiatives from the point of view of the problem you want to solve, or need you want to satisfy. It is common for an entrepreneur with an idea in their hands to end up being obsessed by believing you have the idea of the century, and then it’s good to see things from another perspective, and have criteria to determine whether or not our idea fulfills its purpose effectively.

Canvas business model

Having a good product is not enough. The proposed solution is just one key element of a business model, now the next step is to contextualize this solution and think about how we make that solution will create your business, delivering and capturing value. In this step we will use a tool called Canvas business model.

Business Model CanvasFilling each of the blocks that make up the canvas, we can have a more complete picture of what we do and how we’re doing.

Develop a minimum viable product

The canvas designed in the previous step is just the starting point in our search for a business model that is repeatable, scalable and profitable. Now we validate the different elements to ensure that our business model works, and there is only one way to perform this validation: interacting with the market. The market interaction should be done with actual and potential customers using a minimum viable product, i.e. a simplified version of the product that we offer.

Validate your business model

Lean Startup Learning CycleUsing our minimum viable product, we will determine if our business model works. The goal in this step is to get feedback from real customers and validate the 3 most important assumptions underlying a business model: client-problem-solution.

This validation will help us to see that there really is a customer segment with a common problem, the problem is significant enough so that customers are interested in finding a solution and would be willing to pay for our solution. It may be the case, for example, you have a good product, but directed to the wrong customer, or have a great product, but that does not solve any problem, or that our solution is not effective enough for someone to pay for it.

This validation is done through a learning process applying the principles of Lean Startup. The Lean Startup process is developed in 3 steps: Build, Measure and Learn.

 Find funding

Before the entrepreneur is out with a business plan under his arm, needs to get funding to start their business, but with this process we have developed more than a business plan. So far we have real data provided by real prospects, and we even have achieved our first customers. This information is of great value because you can show that you have in your hands a business that really works, and not just base it on data and statistics taken from the Internet. There are several sources of funding for entrepreneurs such as business angels, government support programs, banks, capital, crowdfunding, etc.

Your goal in this step is to get the necessary financial resources not to start the company (because practically has already begun and already have customers), but to make you grow faster and be able to convert your experimental company (startup) in a structured organization capable of running the business model that you have built and validated.

Consolidate your company

You already have a business model that works, and have your first customers and you have financial resources, must now build structured administrative and operational areas, to begin the consolidation and growth of your business organization.

Discipline, hard work and patience

And finally, there are no secrets to ensure success in business. Just about hard work, perseverance, discipline, passion and patience. Starting a business is just the first step, now followed by years of dedication to ensure that your business is sustainable and consolidated in the market.

Do not forget to leave your comments, opinions, criticisms, questions and contributions on the subject.

Jose is an avid business Blogger with a real passion for all things digital. He enjoys writing about the latest Business trends and successful business marketing strategies.

One Comment

  1. isa says:

    I feel you touched the main parts of a business model. Hope it is useful for most readers and especially entrepreneurs.