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I spend a lot of time thinking about people's business models. I suppose you could say it's a genuine curiosity about how things work, coupled with an utter fascination about how people work together with their individual combinations of skills, experience, abilities, and temperament.
Yesterday, I spent quite a bit of time putting together a half-day seminar for prospective entrepreneurs. We'll deliver that seminar this week in four one-hour sessions as participants work in teams to design products and/or services around customer needs as they put together an overall business model.
All of this got me to thinking: how is business model development any different from what sales, marketing, and product development teams do within their companies?
It's true, there's a lot of overlap. Sales, marketing, and product development have to build products and services that take care of customer jobs - and not just functional jobs, such as completing specific tasks - but the jobs that are about status, power, finesse, or security.
Those products and services also have to solve a customer problem - relieve one or more pain points - and, more than that, provide benefits and gains to the customer that at least meets a minimum set of expectations, and hopefully exceeds them.
And all of this for a price the customer is willing to pay.
So far, so good. So what's so different about working from a business model perspective?
- Comprehensive Scope. When we look at the business model, we zoom out from specifics to look at the overall way the business operates - from its cost and revenue structures to its key activities, customer relationships, and so on. This breaks down internal silos and helps to sift projects for development or discontinuation.
- Strategy vs. Tactics. Business modeling helps create a go-forward strategy, not just the next package to sell. It observes the trends, not just the immediate needs.
- Outsider viewpoint. We all get stuck in our ways of thinking sometimes. Having a neutral third party facilitating conversations and process can help transform mindsets to breakthrough.
Those are just three of the ways - there are more - but those are the most obvious.
Not sure you're ready for that? Check out this article on decision making in organizations. We've found it helps a lot of people!
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