For this post, I wanted to write about how to start a business in a few steps. My first headline was How to start a business in 1-million steps to make a mockery of the Solve your most intractable problem in n-steps meme, but thought better of it, ‘as people in glass houses shouldn’t throw stones.’
Instead, I chose to go the other way and suggest you could do it in one step. Well, you can, if you have a solution, the resources, and can leap from job (problem, need, challenge, …) identification to overnight success in a single bound. But Superperson is a fictional character and suggesting that all but the most simplistic of goals can be achieved in a small number of steps is also a fiction, perhaps a delusion even.
I amply demonstrated this fiction to myself as I tried to make my definitive list of steps; I got to a grossly incomplete list of 13 high-level steps and I hadn’t even got into the high-level details yet, let alone the details of the details of the …
Starting a business is a complex undertaking, but I’m determined to simplify it, or at least, to remove some of the mystery, but it won’t be in this post.
But anyway, let’s carry on. So here it is, the single bound to starting a business:
- Obtain a Business Model that works.
And by obtain, I mean design, copy, adapt, or whatever else you must do to obtain a Business Model that works.
And here’s the catch; if you drill down into what is involved in obtaining a Business Model that works, you quickly uncover lots of detail, and lots of other steps.
So just what is a Business Model? Click on the link to see some definitions. Essentially a Business Model is a money-making, or to be a little more generic, a value-exchanging machine. Not a machine as in a drill, a car engine, or an egg beater, but a machine as in a system with inputs, processes, and some outputs.
The definitions of Business Model at the end of the link consist of both Business- and Customer-Centric definitions. The one that I believe is most important is the customer-centric definition, that is, a “Business Model consists of the value a business creates for me, what it charges me in exchange for that value, and what value it erodes for me.” Unlocking the Customer Value Chain, Thales, S. Teixeira.
So in summary, a Business Model is essentially a system that creates benefits (something of value) for customers where those customers are prepared to pay you money (something you value) to receive those benefits. An essential component of this fair exchange of value between willing participants is that you sell the benefits for more than it cost to create them, and in the process of delivering the benefits you do not remove or erode value by frustrating or annoying your customers. Of course I am being flippant with my 1-step to nirvana headline, but therein lies the point. The principle behind successful businesses is simple – obtain a Business Model that works. In practice however, obtaining that Business Model will take far more steps than you imagine or other authors admit to, and all this is fertile ground for further posts.