Business Models

[THIS NOTE IS VERY VERY UNDER CONSTRUCTION]

A quick Google image search for the phrase “business model” serves up greater than 543,000,000 results. There is a seemingly endless number of ways in which to conceive, construct, and critique a business model. This variety of meaning for such an otherwise simple phrase leads to rather significant problem for founders as we try to make sense of what anyone in particular means when they ask, “What’s your business model?”

Rather than try to scoop out each and every detail of each and every model that would apply to each and every startup in each and every industry on each and every continent, I am going to step back and try to speak of business models in very simple terms.

In these simplest of terms, any venture—for profit or nonprofit—creates impact, that impact has value, and in order to persist the venture must somehow collect at least portion of the value of that impact.

create -> IMPACT <-> VALUE <- collect

In practice, this model for impact and its value is likely to be communicated in a story.  That story provides a detailed, insightful, evidence-based, and (therefore) credible explanation of how your venture creates impact, what the value of that impact might be, and how you intend upon capturing some if not all of this value.

Impact

Value

create

….

capture

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