Changing Your Business Model
It’s hard, but increasingly necessary as markets shift. Some tips from someone who knows.
Mike Troiano sat down with Jim Crowley, one of our premiere entrepreneurs in New England, to talk about his journey from liberal arts student to lawyer to pivotal leader at high impact companies such at Network Plus, m-Qube, Turbine, and Skyhook Wireless. After a far-reaching conversation covering everything from what you learn to survive in a family with 9 kids to the value of a liberal arts education, Jim spoke eloquently about the need today to consistently pursue the right business model in the face of a rapidly changing marketplace.
“Look at the world today... Fifty years ago the average age of a company on the Fortune 500 list was something like 60 years. Fortune estimates that by 2020, it will be 12.”
Jim is a disciplined operator who believes that operational excellence requires the willingness to “challenge your business model all the time.” It sounds routine, but it‘s not. Changing the business model doesn’t just mean pricing or how you go to market, it’s everything — “your reason for being.” So to make a change is a big deal. Competitors, customers and market dynamics are changing faster than ever, and successful shifts require thoughtful planning and solid execution.
Jim is a curious guy who loves complex situations and exploring what is possible. He talks in some detail in the interview about the innovations that were necessary at each of his startups. Here’s a summary of Jim’s advice for making a business model change:
- Whatever the shift is that you need to go from A to B, make sure you really do your homework, collect as much data as you can and look ahead to points C, D, E…
- Make sure you have the capital, skills (team) and time to get there (try to anticipate how the environment will shift as you make your change).
- Get your investors on board (your job is to tell the board when a change is needed).
- Once you lock on a path, sprint — speed really matters.
Of course sometimes things don’t work. Skyhook invented mobile location, but may have been too far ahead of the curve. Facing multiple challenges compounded by lots of litigation with Google, they saw the need to change their business model, and did so successfully.
Jim’s next project is oriented around data. “Digital fuel” is the term he uses to describe a business that will help customers better leverage unstructured data, as input to computational machine learning. Call it “M2M,” or raw material for smart machines.
While there’s little doubt a capability like that would add a lot of value to certain segments of the market, the key to building a business around it will be figuring out a business model that works. Looks like the challenge is in good hands.