How do I create a business model?

Gregg Fairbrothers:  Business models are ways of executing on an idea or product. Any time you create a business model you are taking a chance it will work out.

  1. Short answer: don’t.
  2. Long answer: if you have a new product see the previous answer. There is no glory to creating a new business model if you are creating a new product. This is doubling up on your risk; now two things have to work in the marketplace. It’s hard to get people to adopt new things. With new things making a big splash in the market, with new websites taking off every day, it seems so easy. What you don’t see unless you look are the countless failures that never get any traction. So you think successes are easier and more common than they are. Getting people to buy things they have not bought before—even getting them to buy the same things from someone they haven’t before (you)—is never easy. Reaching them through a new business model just compounds the challenge.
  3. Don’t create a business model. Steal one. Look at who is successfully doing what you want to do already and imitate that. If you are convinced no one is doing what you want to do, find the closest analogue. Even things that seem new—like buying things online when the internet came along—are often not all that new. People were buying things in stores and through catalogs long before there was an internet.
  4. If you have come up with a new business model—like mail order catalog sales (reportedly Benjamin Franklin, later Alfred Hammacher, Aaron Montgomery Ward, Richard Sears and Alvah Roebuck)—don’t sell new products. Do what they did: sell what people are already used to buying.

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