A business model is a company’s plan to generate profits and it is critical for the survival of a new business. As an entrepreneur or startup, what do you need to know when it comes to mapping out a business model? How can you plan to overcome future challenges when designing a suitable business model for your company? When should you pivot your model to fit market requirements during unforeseen challenges and situations caused by macro-economic factors?
These are all fundamental questions in which we explored in our most recent Startup Series webinar.
Hosted by: Marc Liew (Venture Development Lead-APAC, R3)
Speaker: Sebastian Mueller (Co-Founder and COO, MING Labs)
Having worked with 30+ Fortune500 companies across 200+ projects and helped entrepreneurs in Asia and Europe build 15+ startups, Sebastian shares his views and expertise with the R3 ecosystem.
We have highlighted some of his key takeaways and points in this post webinar recap to further help our ecosystem explore the importance of planning and executing business models across different scenarios
A successful business model is essential to help startups survive in the difficult times and turn ideas into a future monetization engine. Companies can innovate and brand themselves with unique business angles to capture new audiences and new revenue streams. At the core of this is the effective implementation of ‘design thinking’.
Why is ‘design thinking’ so important?
‘Design thinking’ is a problem-solving technique. In short, designers evaluate the human pain points, and then address the question of how technology can solve them. This is essential to the implementation of technology in the real world.
Results have shown that over the last 10 years, ‘design thinking’ focused companies have vastly outperformed others, with Apple and Amazon the most notable examples. Most importantly, ‘design thinking’ applies not just to the product itself but to all layers of the business models. The goal is to arrive at a business model that is less product focused and more customer centric, which ultimately drives positive performance.
What is the ‘design thinking’ process?
A key set of steps and methodologies helps your business model to align with your customer’s success. At the center is a user-led approach where assumptions are tested, validated and iterated. The first two steps are imperative, as design thinking never starts with the problem and always begins with the customer.
The process is not linear, and the steps are implemented back and forth as needed. At its core, the user experience is your discovery lab. Implementing ‘design thinking’ allows not just for minor improvements, but also for sizeable business changes, as well as the adoption of cloud computing.
Startups can design and build from the ground up, without any legacy related issues. Every piece of the business can be designed from scratch and in unison. All the different parts of the business can be tuned to work and complement each other.
Startups have limited resources and cannot afford to waste time and money on friction, making this incredibly important for them from the start.
To further reap the benefits of the ‘venture design’ process, align your business with the mega-trends in the global economy such as sustainability, climate change, and urbanization. Positioning your company in conjunction with top global agendas also gives your startup an opportunity to cement its place in society. Naturally, grants and contracts are more likely to come your way when you are aligned internally with external driving forces.
The founder needs to take on the role of ‘master designer’, aligning all the internal aspects to the customer, the problem, and society at large.
How does ‘venture design’ compare to ‘solution design’?
Startups typically focus on their products, services, and offerings. These are both tangible and measurable. However, what is lacking is customer validation. The product is simply being executed technically, without necessarily serving a genuine consumer need. The key to ‘venture design’ is that ‘design thinking’ is implemented right from the beginning, involving all aspects of the startup, besides just the product or solution.
The goal is to use ‘design thinking’ to build a Minimal Viable Business (MVB) instead of a single product, utilizing a viable business model in addition to product functionality.
‘Venture design’ looks at desirability, technological feasibility, and business model viability. The result is a successful business model, as we have validated all parts of the business in unison, right from the onset.
A business model is a company’s plan to generate profits, which is critical for the survival of any new business. As an entrepreneur or startup, what do you need to know when it comes to mapping out a business model? How can you plan to overcome future challenges when designing a suitable business model for your company? When should you pivot your model to fit market requirements during unforeseen challenges and situations caused by macro-economic factors?
What is the outlook on the enterprise blockchain startups and how can they work better with big corporations?
Emerging technologies serve as a disruption to many traditional processes. However, corporations are looking to spend on value-adding processes. Removing friction, cutting costs, and opening up new revenue streams are benefits of DLT which is why it is being implemented in more and more enterprises.
Increasingly, we see corporate inertia being displaced with priority given to innovation, provided that customer problems are solved. Proof of value and proof of scalability must be defined to get positive response from enterprises. Most importantly, the cost of in-action needs to be defined to make your offering relevant in the current climate.
How can ‘design thinking’ help startups navigate in the new post Covid-19 world?
Firstly, startups like all businesses need to implement scenario planning to anticipate various future outlooks and what they mean for different business models. Some likely outcomes of the pandemic include the fracturing of economies globally (especially in supply chain and travel), lower disposable incomes, and continued social distancing measures.
The goal is to determine what the drivers to your startup business are and what the future global backdrop will be. This will then help to pivot business models to where resources are needed.
Depending on which scenario plays out, ‘design thinking’ can again be utilized to plan and build for predicted future outcomes. The starting point should be what those future customer needs are and how the current business model addresses that.
A successful business model builds resiliency right from the onset and helps to preserve cash, as we have a monetization strategy from the beginning and are less reliant on external funding.
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