Why make a Business Model?
The biggest effect the business model has is not having an effect on your wallet🤑
A business model is a living document that contains the business ethos, aims and mission of your company.
Up to date, Little Kidogo has gone through 5 official business models. Each model’s hypothesis having been tested and thus readjusted to make yet another one.
A lot of work yes, a lot of money, no. The biggest effect the business model has is, well, not having an effect on your wallet!
This is why, at Little Kidogo, whenever we get a new idea for a product, we run to our business model 1st, then to our customers 2nd.
⚖️“Success is not final, and Failure is not Fatal” — Winston Churchill
You don’t want yet another product gathering dust, right?
It’s not enough to just decide on something and make it all on your own. This is not grad school anymore, to get real customers you need to build a real business and that means putting your customers first.
It’s about the customers because, well —
- They are the ones who are gonna pay for your product and
- Making a really great product means collaborating with the world around you and who better to collaborate with than the ones who will be using the product in the first place, your customers!
Why a Business Model?
Your business idea isn’t the same as a business model and your business plan is actually derived from your business model.
The pros of developing a business model:
- Stress test your business idea
- Avoid breaking the bank while exploring options
- Track your progress as you develop your business idea into an actual business
- Establish the financial feasibility of the idea
❌ Had we not tested our business models early, we would have spent way more time and resources on building something only to find out it’s not really what our customers were looking for.
Little Kidogo’s 4th business Model— The people we thought were our customers were in fact rather our partners and our partners our customers — it can get really confusing! know that the real world is never what you expect it to be.
What are we gonna make?— the first question of the project
“It’s always good to start with problems you personally have experience of, this way the solution you build stands a bigger chance of actually making sense to the potential users of the product you end up building.” — Problem Solution Fit
In order to make the ideas-choosing process as democratic as possible, make sure to allow your prospective customers to throw in some ideas too.Ask them to think of the problems they are facing or that people they know are facing.
*To learn more about the types of questions you should ask, read our Problem Solution Fit blog here.
📊Once you’ve gathered the data you go back to your business model
As a business, you can vote on these ideas, adjust your business model and voila, you’ve got an all-new business model hypothesis to test again.
And so you continue this process until your business model hypothesis is proved right.
It is only once the business model is sound and plausible, aka tested and proved that we can start making a Minimum Viable Product* (MVP)
What’s the first thing you do when you get a new idea?
We’d love to read more about it in the comments or why not join our community of makers and continue the convo on Discord 🦄🔌
Footnotes
*Also called Prototype
