Platt Perspective on Business and Technology

Planning for and building the right business model 101 – 2: pre-planning for day 1 and beyond, part 2

Posted in startups, strategy and planning by Timothy Platt on November 7, 2014

This is my second posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Part 1.)

I began to outline some of the issues of What you would build as a new business venture in Part 1 of this series. And in the course of that, I offered at least a beginning to a basic due diligence-and planning oriented list of questions that need to be asked and answered in planning for any new business venture. My goal for this installment is to at least begin to offer some Why questions, and some comments that at least in my experience have proven to be of value in systematically addressing them. And I begin that with a foretaste comment that I added at the end of Part 1 in anticipation of this installment, where I stated that I would focus here on the issues of:

• What you would build towards and what you would build away from, and planning and building from positive and negative lessons learned.

And I begin this discussion by making a confession, that anyone who follows this blog already knows the impetus for my offering. I at least occasionally start out explaining what something is, by clearing away the clutter with a brief outline of some of the possibilities as to what it is not. You cannot say what something is simply by saying what it is not, except perhaps in entirely constrained and narrowly limited systems – which do not generally arise in anything as complex or mutably varied as a business context. At most you can just clear away some of the clutter and possible points of confusion by focusing on what something isn’t. Now apply this same reasoning to your initial business building plans.

I have rarely met a business founder, or would-be founder and entrepreneur who was not at least in part driven by a desire to do something they see as significant differently and better than what they have been facing. Startup founders are almost always driven by a combination of:

• Positive incentives and sources of motivation that are built around what they seek to offer, and
• More negatively framed disincentives and the drive to break away from what they see as the stultifying and limiting, and the fundamentally flawed.

But ultimately, you cannot build a successful new and different by focusing entirely on what you choose not to do. Use your understanding of the negatives more as you would a map of a minefield that might be in your way, as a source of insight as to detail-mistakes and challenges that you would want to avoid. But plan and build with a primary focus on the positive and on what you would actively do.

I stress this because I have seen founders who have at least initially started out focusing way too much on what they seek to leave behind and avoid and way too little, at least in detailed terms on what they would actually do as an alternative. I made note of my experience trying to consult and mentor dot-com founders leading up to the first dot-com bubble burst in Part 1, and in that I note that some of those people were systematically organized and some were anything but – and even if they did have what should have been a good idea to build from.

• Start from the absolute fundamentals in this, and on what you seek to offer in a marketplace that would offer value there, and from the perspective of real world customers.
• Then plan for and build your strategic and operational processes and systems from there, leveraging both positive and negative lessons learned and the full range of your experience in this – and both as a business professional, and as a customer and consumer. That point is very important:
• Think and plan for what you would do in terms of meeting the needs and the preferences of the people who you would seek out as your customers, and as your repeat and ongoing customers wherever repeat business is a realistic possibility.

Now, what do you want to offer as your assortment of market-ready products and services?

• What would make them attractive to your potential, targeted customers?
• How do they fit together and support each other? What are their synergies and how does offering them together make all of them more competitive in the marketplace that you seek to work in?
• What qualities would you offer that would make your product and service mix uniquely valuable to your customers, from their perspective?
• To clarify that, would your offerings be intrinsically unique in some way, offering product features for example that your competition does not provide and that they cannot readily, easily match?
• Would you offer your products and/or services at a lower price point than your competition, and at the same or higher quality and reliability?
• Would you offer faster, more customized service and/or customer support? Would special value arise in what you offer, for example, from how you address the particular needs of your targeted demographics, where for example your sales staff and support personnel speak and understand the native language of a new and growing immigrant community in your market area and understand their needs and preferences?

Start with a clear understanding of precisely what you would offer and who you would offer this to, at least initially and as you begin to actively function in a marketplace. And build your business model around a goal of doing this more effectively than your competition does or readily can.

With this preliminary background discussion in place, I am going to turn in my next series installment to more directly consider the business model itself and what goes into it. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 3 and also at Page 1 and Page 2 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too.

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