I’m not always sure what to make of Seth Godin. There are days I wonder why I follow his blog and then there are other days when he posts something that reminds me why he is a genius when it comes to the master of simplicity. To see what I mean, check out this post – “Thinking About Business Models”
As part of our transitional planning services, we often look at how to create/reconstruct business models, but we’ve never been able to summarize the elements of a business model quite like Goden does. As Goden notes in the post, there are four elements in the architecture of a business model:
- What compelling reason exists for people to give you money? (or votes or donations)
- How do you acquire what you’re selling for less than it costs to sell it?
- What structural insulation do you have from relentless commoditization and a price war?
- How will strangers find out about the business and decide to become customers?
The bottom line? If you can create a business model that answers these four questions, you likely have a winning business model. How does your business stack up?
