It’s tough to analyse a startup’s potential; there are too many variables, the markets are often too nascent and the competitive set is usually unclear. I guess that’s why so many of the great early-stage investors use ‘gut feel’ or focus on the people rather than the idea. In the main I think they’re right, but that’s no reason not to try examining a startup’s business model with some rigour – the thought exercise alone can be beneficial.
So, in order to analyse startups and establish a common language we developed a business-model framework. The main goal was to allow us to systematically examine startups and to help provoke creative thought.
When you ask people why Amazon or Apple are successful they understandably focus on the consumer-facing proposition – but in both of those cases their success is hugely influenced by clever design that the consumer never sees, including partnerships, team structure, marketing channels and pricing policy. I talk more about that in a video on Passion Meets Momentum.
To ensure we don’t fall into the same trap when analysing startups, the business model framework reminds us to focus on the non-consumer facing stuff – including the capabilities of the team and the partnerships that the startup depends on.
Here’s a link to our blank business model framework, feel free to print it off and use it as a tool in your own business:
Download the Business Model Framework
We tend to start with the Value Proposition and Consumer Segment (the backbone of any great startup) – if they’re not clear I often don’t bother with the rest. We then work systematically around the other segments, summarising what we know and exploring opportunities for development.
You’ll see the framework includes definitions for the different segments and a few provocations (specifically written for B2C tech businesses).
Filling it in is usually a highly informative and fun exercise and often unlocks some great creative thinking (counter-intuitively a formulaic approach sometimes drives creativity). We hope it works for you too…
As another reference point, here’s a framework for HackFwd that I had the pleasure of building with Lars.
Download the Example of the Framework for the HackFwd offer
As with everything at HackFwd this is in Beta – please do email me with any builds that you may have.
Tom
email: thulme@ideo.com / twitter: thulme / blog: weijiblog.com / web: ideo.com
(via the HackFwd blog)
