Those whose childhood was in the 90s of the twentieth century and was spent in provincial cities have already encountered at least 1 time with the concept of choosing a business model: do you remember at one time washing cars was a very popular type of summer earnings for teenagers? It was necessary to choose where to deploy an improvised car wash, how to wash more cars in less time, where to take water, how to attract randomly parked drivers not only with a signboard, but also with a combination of price + some kind of cleanliness.#187; and how to earn at least something at the same time.
Some 15 years have passed, amateur carwashers have been replaced by professional carwashers even in the farthest province, no one will give their car into the hands of teenagers, all niches seem to be occupied, but this does not mean that in the minds of the young (and not very) enterprising people have lost the desire to find their own way of earning money, to do their own business.
The boys from my yard in the early 90s got acquainted (without knowing it) with business planning and the implementation of the operating model 15-20 years ago. And for all the rest of our readers, it would be useful to take and read the book that will be discussed today. Especially — if you want to leave the cozy corporate nest « (where someone decides everything for you) and embark on an independent flight across the vast expanses, whose name is — «Entrepreneurship ».
A book written by John Mullins and Randy Komisar —«Searching for a Business Model: How to Save a Startup by Changing the Plan in Time » has been on my desk all this week. Its authors — are not some cabinet scientists » who build their books exclusively on theories and paper research. John Mullins traveled a lot in Africa and Europe, spent a lot of time in India; wrote a large monograph on business planning and regularly writes and speaks on the topic of business planning and venture capital investment in developing countries. His colleague Randy Komisar is not far behind: he was not only engaged in private law practice, but also founded several large companies, managed to work in many areas, from a musician and a cleaner to a financial and executive director. And together they wrote a book in 2009, in which, using examples of famous and little-known (but therefore no less profitable) companies, they told in clear language what the business model consists of, how to properly prepare it, and how to change priorities in time if you suddenly we realized that your business has reached a dead end.
A startup — contrary to the currently popular definition — is not just some kind of website that offers some services or goods for money. A startup is essentially any new enterprise, and the book contains just more examples from the material sphere and the sphere of offline services (although the canonical examples of eBay, Google, Amazon have not gone away). In my opinion, for a modern IT entrepreneur, the experience and lessons from the Zara clothing brand, Costco club warehouses and Pantaloon supermarkets will be no less useful and interesting than the examples of Internet companies and IT manufacturers, which we have all read about dozens (if not hundreds) of times. The most important lesson that you learn at the same time: «Develop and improve your idea and your business, constantly observing others».
At the same time, the authors make it clear that there is no universal recipe for an effective business model. I know: textbooks in humanities universities say the opposite, financial and management theorists constantly talk about a kind of holy Grail of business planning, which should ideally be a business model and a business plan ... but in real life, in 90 cases out of 100, it simply does not happen. The traditional business plan in most cases is a set of assumptions that leads to a dead end and offers only one, optimistic scenario for the development of events. In life, most often you will need a backup option (which will eventually become the main one, most likely). You can copy and repeat: sometimes it helps, sometimes it doesn't. This book shows in which cases copying works, and in which cases it does not.
An important lesson for me as a manager: always build assumption lists and dashboards. Analysis of the observations and assumptions made will help fill in the gaps that inevitably arise when analyzing the market and trying to build your own business model.
Planning requires great attention to detail and may seem boring and tedious, but the effectiveness of the created plan is not in the number of written sheets. Highlight the main thing.
Another lesson from the authors of «Search » for everyone (not only for those who are engaged in business): a backup plan of action cannot be prepared in advance. It emerges only in the course of any activity, and business is no exception. Moreover, the process of analysis, comparisons, selection of analogues and antipodes never ends; so having decided to open your own business, get ready not for a sprint, but for a marathon.
Does not affect the effectiveness of the business model and the size of the company : the book gives examples of how a small and still unknown Skype gathered 7 million users in a year without a single dollar of marketing costs; and a large VoIP company threw out another one for advertising «the marketing wind is» several hundred million dollars — and in 4 years I could hardly scrape together a couple of million subscribers. What matters is the right choice of the business model and its adjustment over time.
The main feature of the book : an abundance of accessible and interesting examples, as well as brands familiar to many readers from the offline and online world. To be honest, if I had such a book on my desk in the 4th year of university, many questions about operational management, gross margin, operational planning and working capital would be much clearer and simpler.
Students — as humanities (as an alternative to confusing and boring textbooks on business planning and financial management), and «techies» (if you want to not just« write a cool thing and make everyone stunned, and then we we will be like Facebook*», but you want to really do something that makes a profit and can financially pay off and develop yourself in the long run).
Teachers of business planning and management — to «tighten» the ability to give live and understandable examples for modern youth and stop referring to Ford, British Petroleum and other «giants», which are infinitely distant and unfamiliar to most people between the ages of 17 and 27.
Entrepreneurs — in order to finally move from the theory of business planning to practice and learn how to record, compare, draw conclusions, adjust the development of their own business and operate not only with numbers in the balance sheet, but also with qualitative indicators of the development of their company tied to these faceless figures.
«Unfortunately, usually a novice entrepreneur is wrong. But the difference between the boy and the husband lies in his actions after his first plan failed.»
«When a company that has barely started working dies, the reason for its death is often explained as «We have run out of cash». But the depletion of cash reserves is not the reason at all! This is a symptom. A symptom that the company's business model is not working.»
Mixing and matching bits of information from one analog here, from one antipode there creates a creative melting pot in which new strategies and business models are brewed, thanks to which your company will be able to stand out in its industry.»Finally, I will say that the search for a business model is like a cookbook with examples, but without detailed recipes: you can read examples of various delicious dishes, but you can make them or even invent your own new one only by going into the kitchen and choosing dishes for yourself, inventory and products for work. Until you try « to cook» your own business — no one « will cook » it for you. Read and try!
"The Search for a Business Model", by John Mullins and Randy Komisar
Buy on amazon
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