What is worth more, the idea or the execution of the idea?
Many people brag (not without reasons) of having ideas. Having ideas is important, being able to see clearly what must be done in specific situations, being the first one to glimpse the solution, many times is priceless.
However, through time, I have realized that as important as the idea or even more, is to carry it out. After all, having ideas is human and common. What is not so common is to carry them out, and even less, do it successfully… Take the time to think how many new ideas (about things you could do) came to your mind during this last year, and then, make a reflection about how many of those ideas you are really going to carry out (or have already started carrying out) Surprised?
As the proverb says: “Easier said than done”
And when we talk about a business idea, the distance between what is said and what is done aggravates. You have surely been in a situation like this: “I have a business idea, however when I tell my boss, family, friends, etc. looking for partners and/or disinterested investors 😉 about it, they don’t seem to be convinced, or I don’t explain it correctly, or they see some gaps in my reasoning, or they ask questions I can’t answer…”
The first step to add followers to your business idea is to be able to transmit it in all its magnitude, with no fissures and with certainty.
Use a base tool to make the idea tangible
To achieve that, I recommend a simple tool that is already part of my everyday work, the Business Model Canvas, described in Alexander Osterwalder and Yves Pigneur’s book, “Business Model Generation”.
We use this tool at work as a starting point in the process of creating new branches (spin-offs) inside Master D. Group, when we work from iZenuis with clients that wish to launch an internet business, and even as a tool inside the innovation and creativity program for Master D employees who wish to launch and lead their own business or innovative idea inside the group.
A business model, according to the book, describes the reasoning about how an organization creates, delivers and captures value.
The 9 blocks of the business model
The canvas to represent your idea, the business model canvas, is formed by 9 parts that show how a big enterprise expects to earn money.
- Client segments: Who are our clients? Why do we create value?
- Value proposal: What value do we give to our clients? What problems are we helping our clients to solve? What needs are we satisfying? What pack of products or services do we offer to each market segment?
- Channels: How do I get my clients to know me or to buy my products? What are my channels of communication, distribution and sale?
- Relation with the client: What kind of relation do I establish and keep with my clients? What relation are my clients expecting? How much does it cost?
- Income: What price are our clients willing to pay for? What kind of income do I have? How do I get paid? How much?
- Key activities: What key activities need our value proposals, distribution channels, clients relations and income sources?
- Key resources: What key resources need our value proposals, distribution channels, clients’ relations and income sources?
- Key alliances: Who are our key partners? Who are our key suppliers? What key resources do we get from our partners? What key activities do our partners do?
- Cost structure: What are the most important costs inherent to our business model? What are the most expensive key resources? What are the most expensive key activities?
We mustn’t forget that the business models, the enterprises, are created in specific environments. To be able to conceive strong and competitive business models we will also have to study our environment: the market strengths (segments, needs, demands, etc.) the macroeconomic strengths (market conditions, mainly), the industry strengths (competition, products and substitute services, etc.) and the key trends (technological, social, cultural, socioeconomic, etc.)
If you are able to complete the business model parts considering the environment you are going to develop it in and the union of parts 5 and 9, income and costs, it is encouraging, your possibilities of convincing and getting investors will increase.
Collaborative session with a multidisciplinary team
To complete the business model of your idea, follow the next steps:
- Download and print in A1 size the business model canvas template in this post.
- Gather a heterogeneous team made of colleagues, experts, friends or people you trust to provide help.
- Get colorful post-its and start answering each part questions writing down the answers on the post-its.
- Use the colors to put concepts into groups (for example, the elements of the model related with a specific client segment). You may find several business models hidden inside your idea…
I guarantee that once you have finished you will have clear ideas about what your business is going to be.
After defining, we must implement and manage the business model
According to the book “Business Model Generation”, the process of a business model design is formed by 5 stages: Mobilize Understanding, Designing, Implementing and Managing. The last stage is the one that, for me, deserves a special mention, the stage that consists in adapting and modifying the business model according to the achieved experience and the market’s reaction.
It is important to embrace that we are not designing a definitive model but something we will have to evolve and adapt while our experience increases and our contact with clients shows us what works and what doesn’t.
To deepen into the management phase of the business model, I recommend the post: “I have already defined my business model, and now what?