BMC Part Twenty: What Next?
Thank you for reading this guide on building strong business models – I hope you’ve been able to make your ideas more resilient.
To finish this series, let’s look at the main traps that lie ahead, the activities that can ramp up your income, the best books to read, and how you can get in touch with me in the future.
There are four temptations in front of you, each with the potential to reduce your chance of success.
Trap #1: Complacency
Your model is never “finished”, just like how sport is never “finished”. It’s not always a sprint, but there are more hurdles, changes and opportunities ahead, so you don’t want to simply accept your currect canvas as being the way you’ll work indefinitely.
By staying on your toes, you can jump at good offers that seemingly emerge out of nowhere.
Trap #2: Falling In Love
Yes, your model is great.
No, it isn’t perfect.
Yes, you’ll need to change it in the future.
No, that’s not a bad thing.
Falling in love with a model seems like a better scenario than becoming complacent, but it’s equally dangerous. This is doubly so if you’ve invested your ego into the model, because then negative market feedback will feel confronting, like a personal attack.
Trap #3: Obsessing Over Investment
An investor will not change your fortunes. I meet so many entrepreneurs who believe that investment will solve their problems, but that’s not the case.
Investment magnifies the attributes of a business; if it’s working, investment can make it work even better, but if there’s a fatal flaw then investment will only make things worse.
Your next priority is to address the gaps by changing the way you operate, not by bringing in someone else’s money.
More importantly, a good investor will spot these issues anyway, and either back away or drop their valuation. Either way, fixing the model is more practical – and cheaper for you in the long run.
Trap #4: Measuring The Wrong Things
Vanity metrics are a dangerous trap, because they focus on things that make us feel good rather than the things that keep the business healthy.
Realistically, you can’t focus on more than a few key numbers, so they need to be ones that correspond with the financial wellbeing of your enterprise, like total sales, spend per customer or customer churn rate. Tracking increases in clicks or page views is quite satisfying, but ultimately it doesn’t do you a lot of good unless they lead to increased revenues.
These are the most practical extension areas I’d focus on if I were you:
Activity #1: Validation & Experimentation
As we’ve already discussed, this is the art/science of matching our guesses with reality. It might not be comfortable, but it sure beats going out of business. New ideas should start as quick canvases, but then proceed as experiments. It might be with a small sample group of customers, a pop-up site, a crowdfunding campaign or ghost testing (offering to sell something that doesn’t yet exist).
Activity #2: Growth Hacking
This is the process of trialling small experiments that boost your sales conversion rates. It might be through re-arranging your web layout, changing the placement of “Buy Now” buttons, adjusting price points, altering the wording you use in your marketing, the frequency and timing of your emails, etc.
Each of these might increase acquisition or retention by a few percentage points, and by running a tonne of experiment you’ll see a big ramp up in how many customers stay engaged.
Activity #3: Monitoring Your Financials
Profit margins can dissolve quickly, especially when you’re excited or distracted. In the midst of all this innovation and optimism, don’t take your eye off the bottom line – you need constant cashflow and at least be breaking even.
Financials might not sound like fun, and they’re not, but they enable you to do some incredible things, both for yourself and your social mission.
Activity #4: Ideating New Versions
Like we explored earlier, you have the chance to stay ahead of your competition by proactively designing new (and better) business models. The canvas is not something to be laminated and stuck on a wall, it’s a skill for turning ideas into businesses, and you get better at it over time. Whenever you think of a potential variant of your enterprise, grab a whiteboard or some paper and map out what it could look like. If you don’t, someone else might…
I’m often asked for book recommendations, and my answers generally depend on the person and their circumstances. For your next few months, I highly recommend the following books:
Value Proposition Design – Alexander Osterwalder and Yves Pigneur
The best book on exploring and testing new value propositions. The Value Proposition Canvas is an excellent tool, well worth your time.
Leaders Eat Last – Simon Sinek
New businesses need a good culture, shared vision and strong leadership. Simon knows how to create all three, and it’s full of captivating stories.
All Marketers Are Liars – Seth Godin
Good storytelling can make or break your idea – especially as you pitch to customers, partners and investors. Seth will redesign the way you tell your story, and you’ll see lasting benefits.
Branding in 5 and a Half Steps – Michael Johnson
Michael has captured the strategy and graphic design elements of marketing, and fused them in a simple, elegant way. Inspirational, memorable and enjoyable.
Growth Hacker Marketing – Ryan Holiday
Ryan introduces the core philosophies and tactics that will help you identify and improve the most important numbers in your growth plan. It’s short, sharp, and a great introduction to the topic.
Oversubscribed – Daniel Priestly
An excellent guide to designing offers that capture your customer’s attention, using exclusivity and over-delivering to create strong demand and loyal followers. Full of great stories and examples.
The Hard Thing About Hard Things – Ben Horowitz
A brutal and compelling book about what it takes to be a CEO. I wouldn’t say it’s inspiring, but it will certainly make you a better (and more realistic) leader.
I want your idea to become a thriving business, and hopefully I can help out.
There are three ways we can do that:
· You can find my articles at isaacjeffries.com which cover business modelling, value proposition design, financials, social impact, strategy, service design and more.
· If you have questions about the Business Model Canvas, or want someone to look over your work, you can email me at firstname.lastname@example.org
· I also do freelance work, such as workshop facilitation for your team/board and mentoring for small groups. If that’s of use, please get in touch at email@example.com