Business Model

One of the disadvantages of getting a degree in the Social Sciences and majoring in Philosophy is that 1.) They don't spoon feed you, and 2.) They don't teach you about business and money. They teach you about the world of ideas (not Warcraft), being and make you question your own existence.

So when it comes to elucidating supposed to be, fairly simple ideas, like a business plan, sometimes the words just come out wrong.

To be sure, everything could be seen as a business undertaking. With all the hype that surrounds startups and the $$$ and illions being bandied about by mainstream media, not to mention million dollar ideas from intrinsically useless propositions like the million dollar website, who could not resist?

Strangely, the things that caught the world's imagination, the innovations that exploded and got the most money were the things that people didn't really think about as money makers. These things didn't have business plans.

Nobody thought that they would make money.

But now it is different.

I Have to Make a Web Startup, Period

I need to make a business plan to impress VCs, need to spin up the media for that IPO, need to crowdfund that startup, need to do this and do that to earn a few bucks.

What is your business model? 
(Standard Canned Response) To change the way we do things, and, and, to add value to people, and, and to make heaps (suddenly remembers my Australian cousins) of money.

Alright, how much do you need?
(Murmurs among themselves) $50 Effing Billion Dollars. (More murmering, no, no, no, we need to up the ante, we need to beat facebook because we're going to be the next Google- say 100! say 100!)

Ummm, 100?

Ok, great, please sign here.

TechCrunch Article on Business Model

Quoting from Vivek Wadhwa,

"Developing the right product is hard. But what is harder is building a good business model. Fortunately, there’s nothing magical about a business model. It’s simply the nuts and bolts of how a business plans to generate revenue and profits. It details your long-term strategy and day-to-day operations."


Go tell that to Alex Tew, Bram Cohen, Larry Page, Sergey Brin and Jerry Yang.

  • I am pretty sure that Mr. Tew thought that he could start a new era in advertising by creating "Pixel Advertising", well, he didn't but he made a cool million dollars out of it.
  • Bram Cohen, just wanted to share files more efficiently, didn't know that he would be starting a revolution.
  • Larry Page and Brin just wanted to find things on the Internet more efficiently through algorithms and I'll be darned if you don't know what they did.
  • And Yang, well Yang, made his website seem like the first website and made it a household name - to the point that people thought that Yahoo! was THE Internet...


Anyway, let's pretend that my startup is this blog and let's pretend that we're going to go over Mr./Ms Wadhwa's "Business Model". First question,

1. What are the products or technologies that my customers (readers) really need and want to buy?
  • My customers really need money. 
  • If they can buy $2 using $1 they would. 
  • Happiness
  • Love
  • Wait, wait, wait, here's the well researched piece that I did The Top 10 Things that People Need in 2010 - There, let's make that definitive, (here's a Steve Jobs Boom moment): 
"My customers need the top 10 things that they need."

    *Being realistic - 99% of those needs already have services and audiences tailor made for them (Go on see that link). - the remaining 1% is the next Google.

    1. Reaching customers - how did Alex Tew reach his customers again? How did people find Google again? Oh ya, word of mouth or through a search engine, really? No.
    2. Differentiation - In a world of smooth talkers and copywriters, wouldn't it be refreshing to get honesty?
    3. Pricing - Follows the Chinese model of low markup and high volume.
    4. Selling - You desperately need this and we can give it to you.
    5. Delivery - Faster than the speed of thought
    6. Support - It works if you want it to work.
    7. Satisfaction - S-A-T-I-S-F-I-E-D