Elements of a Golden Business Model

When creating your business model, the top two considerations should be scalability and replicability. Can it get bigger (independent of direct inputs) and can it be repeated (independent of you).


photo credit: digitalmoneyworld via photopin cc

photo credit: digitalmoneyworld via photopin cc


But there are also other considerations you should be mindful of — if you can make them work for your particular startup. Here’s 10 to get you started…

1. Crowd-funded or crowd-sourced — If you can get others (or better yet, your customer) involved in the creation of your offering, or get them involved in the funding of it, they’ll be more likely to buy. (Example: Threadless)

2. Recurring Revenue — Think beyond the first sale. How can you create a steady stream of daily, weekly, or monthly revenue from the same customer? This is obviously more challenging than a one-time sale, because it requires that you consistently provide value and build trust over the long haul.

3. Repackage-ability & Add-ons — How can you take one product/service and re-package/re-cycle it into a new one? How can you tack a little something extra onto it to provide some additional value or incentive to the buyer? Movie theatre’s are not making their big profits off of movies, they’re doing it with the add-on concessions (candy). And a lot of those movies you’re watching are re-packaged storylines from long ago.

4. On-demand/Just-In-Time — Any time there is a gap between when something is produced and when the money for that thing comes into your bank account, there is the potential for a cash flow problem. And cash flow problems KILL startups. If you have a digital product (like an app or an ebook), this won’t be an issue. If you’re creating something physical or delivering a more customized product/service, give this one some thought.

5. Intrinsic Virility — This thing which you have created is such an awesome concept that people will be drawn to it. It’s a Purple Cow in Seth Godin’s terms. It pulls so you don’t have to push. Customers sell to other customers for you at no charge.

6. Zero Marginal Cost and No Overhead — Is it possible you can make each additional sale at no additional expense to the company, and also eliminate the fixed-costs of overhead? If not, how can your business model keep both to a minimum?

7. Create Connection — If your product/service connects people to one another, or serves as a new channel for communication, you have something special. Don’t think of Facebook here. Think of how your offering might connect members of an under-served group or demographic (i.e soccer moms). Consider how your company can catalyze community.

8. Timelessness — Some things never go out of style. If your product/service and business model are trend-based, then it may soar high for a time — then crash into the ground. But if you are doing something which has been done for thousands of years (like educating (Skillshare), helping people feel loved (eHarmony), or helping them become healthier (FitBit)) then you’ll always have customers at your doorstep.

9. Social Impact — How can your business model give back? Specifically, how will each purchase make the world (and not just your wallet) a better place? Consider donating a percentage of your profits to a cause your individual customer cares about.

10. Free — That’s right, how can you give stuff away for free? Maybe you sell add-ons and derive profit that way. Perhaps you charge for a concierge service. But getting people to trust you may mean that you give them something at no cost to start with. In your business model, does customer acquisition start with something your customers get for nothing? It’s a radical idea, but give it a try.


Give all of these a try… or at least some thought.


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Published on April 21, 2014 10:30
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