How to design scalable business model? Is there only one or more recipes for successful startup? If more so how many, more than 55? Is your idea good when it comes to scalability? Will you grow your business or end up running out of customers? Let’s confront your business model with the approach Felix proposes.
Turn on your creativity now.
It’s gonna be needed to figure out what can help your business growing.
Do you know that if you ask a kid (3-5years old) how can he use a paper clip his imagination rockets to the sky and reaches 98%. For kids between 8-10 years the percentage drops to only 32. Teenagers, 13-15 years old, scored 10% and then people being 25 or older had as little as 2% imagination level (data from Divergent thinking book. Mastering the future today. George Land).
This creativity test is tremendously surprising and in the age we need to be creative the most we lose our ability of creative thinking. So how then can we keep our business up and running? How to, first of all, turn up with the idea of the unicorn business? There are a few tips you can use to go into right direction and consider crucial characteristics before diving into product development.
What is a good business model?
There are different measures we can consider. Profits, ROI, value for customers (or for society), market share, competitive advantages, strategic fit, capabilities, exit potential and scalability. Which factor is the most important and is worth billion of dollars? Let’s assume that scalability helps your business model to be better than if it was without. Some business models are more scalable than others but scalability surely allows for exponential growth. So after you’ve built your Business Model Canvas, which is first thing to do, try to define your business model considering internal and external scalability factors and how and if at all it resonates with your structure you have in mind.
External scalability:
Pick a big and growing market.
Think of market constraints.
Target the right customers.
Do something that is relevant. Social impact.
Internal scalability:
Leverage economies of scale- declining costs with increasing output
Develop and monitor a virtuous cycle.
Implement virality in your business model
Use algorithms and automation.Static pricing versus dynamic pricing(more demand higher price).
Find the right people to scale. Team!
By the way, did you know that procrastination actually allows and helps to trigger creative thinking? We are living the rule ‘getting things done as soon as possible’ though. Take your time in this case then, think of it carefully and let your imagination and creativity speak.
If you are interested in business models topics, you may want to take a look at the below publication.
55+ different Business Models Pattern Cards!
Get some inspirations from the prepared models and match with your business idea and strategy.
BMI Lab is a spin-off from the University of St.Gallen. Their mission is to help companies to break the dominant industry logic. They dig deep into scalability concept and really did great work around that. A lot of research, comparison, business cases proving this element is crucial for success.
*In 2008, Felix Hofmann co-founded PaperC GmbH, a platform for academic eBooks, serving as its co-CEO for four years. The breakthrough business model Felix and his founding partners established were recognized with the AKEP Award, and the company was named Germany’s Startup of The Year in 2009. He earned his M.A. in Business Innovation at the University of St. Gallen, Switzerland, and got his Diploma from the Berlin School of Economics and Law. Felix is a true business model enthusiast.
The post was inspired by the event organised by LEAN STARTUP ZÃœRICH.
Lean Startup Zürich Meetup is a community with the goal to spread knowledge and application of the Lean Startup/Running Lean/Lean Innovation/The Startup Way approaches for Startups as well as for innovation projects in established companies in the greater Zürich area.
All organisers are volunteers with high intrinsic motivation and sharing the same enthusiasm for the topic. We are working pro bono and without a boss. Please let us know if you want to participate as a speaker, share your experience or would be interested in joining the organiser team.
