Business Model: Don’t think Win×2

Hello, this is Irino, a strategy consultant.

I’ll explain about business model today.

Table of Contents in Business Plan

Executive summary
Background
Management team
Organization
Vision
Product/service
Business model
Sales/Marketing
Market/Competitors
Startup phase
Growth phase
Operations
Human Resource
Financials
Fundraising
Exit
Risk management
Project management

Do’s & Don’ts for Beginners

■　Don’t forget to collect money

Some entrepreneurs are not good at collecting money. If you send bills monthly and many customers charn at month-end, it’s better to use automatic debit account. If you sell small products and receivables often turn uncollectable, it’s better to charge on monthyly membership package. If accounts receivable collection period is too long and you need a lot of working captal, it’s better to use collection service provided by utility service providers and mobile carriers. Most of collection method is not free of charge, but worth considering.

■　Think who’s paying it

Those who use your products
Those who want to buy your products
Those who make a final decision to buy your products
Those who can affort to buy your products
Those who earn the money

are not necessarily the same people.

Do’s & Don’ts for Intermediate Entrepreneurs

■　Don’t believe in “First-mover advantage”

First-mover advantage means the companies who entered the market first are more advantagerous than those who enter later. It’s a cool jargon. But a theory is a theory after all. In some industries, first-movers lose money untill early adoptor customer segement pass a critical mass. 2nd and 3rd followers often win.

■　Don’t think Win × 2

People tend to think of win-win relationship between two parties. Startups are at a disadvantage in a power game between the two. Think Win x 3. Create triangular relationship. Win x 3 is better than Win x 2 for startups to maneuver.

Do’s & Don’ts for the Master Class Entrepreneurs

■　Steal 90% of others’ idea

Some people are obsessed with coming up with a idea that is 100% purely new. But every business model has similary business models already in history or as competitors. Those precedences are hypothesis tested. Steal 90% of those precedences. Add just 10% of originality.

■　Make something impossible into possible

Making something cheaper is good. Making something faster is good. But making something possible is much better. It means there’s no substition and price competition.

■　View customer’s cheat sheet

Business model sounds like some kind of intelligent way of cheating customers and making easy money. But master-class entreprenurs are honest to customers, and creat good products from viewpoint of customers.

That’s it for today.

Yasutaka Irino, Linzy Consulting CEO