Startup Secrets: Game Changing Business Models

Overview Framework

In our industry, it's not uncommon for entrepreneurs to become so mono-focused on the novelty of product innovation that they forget to innovate equally around their business model.

I believe that a disruptive business model is at least as important as a discontinuous innovation.

As a continuation of my series of lectures at the Harvard Innovation Lab, I explored this topic with a roomful of aspiring entrepreneurs.

You can read a summary of my recommendations at Xconomy. To net it out:

  1. Be disruptive, create a dilemma—You rarely win by following the pack. Turn conventional thinking on its ear. Rig the rules in your favor by rethinking how value is created, captured, and by forcing your competitors to have an innovator’s dilemma.
  1. Identify your C.O.R.E. differentiation—What are your Capabilities Of Really Exceptional value? Identify why your innovation is profoundly better than alternatives and how you’ll monetize and use this core differentiation as a competitive weapon for unfair advantage.
  2. Once you’ve defined your CORE, identify Multipliers and Levers to help accelerate and economize the proliferation of your value proposition: Multipliers help you drive revenue, reach and coverage; Levers help you reduce time, cost and resources to deliver your value proposition. (See the slides for more detail)

By thinking through the three aspects of business model creation—identifying your C.O.R.E. value, finding Multipliers for growth and Levers for cost economies—you’ll have much better odds of building a company that returns value disproportionally to all of its stakeholders. 

As there are so many business models being developed, I am creating an ongoing library of them linked here. If you'd like to contribute yours, please comment below, or post on feedback.

You can see the fuller detail including some of the recent case examples by reviewing the video below.

Feel free to leave your comments to let me know your thoughts on being disruptive and gaining competitive advantage with your business model. I feel the best is yet to come. In fact as I look at companies like Spotify and Airbnb, I feel we'll see a new generation of entrepreneurs whose innovation is not a technical breakthrought, but instead is an innovative new business model.

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