by Larry Sharp
This is Part 2 of a two-part post, read Part 1.
What is the business model?
I have always found that plans are useless, but planning is indispensable.
– General Dwight Eisenhower
I am not a big fan of complex business plans in the early stages, but prefer to develop a business model typical of the lean start-up strategy.1 Don’t get me wrong – proper plans are necessary in time especially to qualify for a business loan or to record key research, but at an early stage I prefer modeling that is hypothesis driven. This mind-set should be intuitive to the entrepreneur and be at the heart of the consultant’s strategy.
Business founders should begin with a search for a business model which is driven by a hypothesis which can be tested in the marketplace of customer need. The model canvas contains a series of theories or good guesses which must be tested. These are sketches of how the company anticipates creating value for the customer. Read more