THE BUSINESS MODEL IS THE BUSINESS
While you would have witnessed businesses come and go and there are also the ones which sustain for good, then what is magic sauce which makes them click. Some click for once, stay there some time and wither away. Others grow from strength to strength and sustain for unbelievable lengths of time, while there are others which grow to take over the world. The super successful IT companies of the recent time fall in this genre. Making data a source of immense wealth and unassailable power, is at the crux of this business model. Business model is the magic sauce of the company, the kernel you may call, around which all activities are built, or evolve. Businesses without a business model do not thrive for long, they might make just make good wealth in the interregnum.
It is a well proven fact by now that having a good product or service does not necessarily create a thriving business. There have been mediocre products which have been immensely successful and products which were built to catch customer imagination failing miserably at the box office. There are businesses which have both been robust and have been acquiring customers but are not able to generate profits, are also somewhat failed business models. They can be treated differently if they are able to make course corrections in time and get on the right path of business, a model that generates sustainable profits. The business model nonetheless is not etched in stone and does change with the changing times. As the ecosystem changes all around the business, consequential changes happen, but it retains its core.
It is generally seen that businesses don’t start after creating a business model, they are started for a variety of reasons and that is what entrepreneurship is all about. As it progresses in its journey, the business model evolves, it might tweak and iterate any number of times, but finally it solidifies into a robust one. The success of the business model can be gauged from the fact that the business inclusive of manufacturing runs in a seamless fashion and there is a constant flow of profits. The growth trajectory is visible and it is duly reflected in the emerging profit patterns. Newer avenues of business are created with the same core which adds to the profitability. The new and old merge in an organic manner yielding immense synergy and yielding bountiful profits.
Some business models emerge and prove their profitability in a manner that more and more entrepreneurs follow suit or some established ones also start trying the new model. We are all familiar with the outsourcing model, which became hugely successful. With a lot of companies making windfall gains, aggregation and multisided platforms are now becoming the order of the day. As aggregation means strength and network effects help to scale, it becomes very different from a conventional business. We are seeing them mushrooming all around the place, some hugely successful others as some levels of success and lots winding up. What is also to be understood is that it’s the man behind the business model who will make it successful at the end of the day. We are seeing the startup model getting unfixed.
EVOLVING YOUR OWN BUSINESS MODEL IS THE MOST DIFFICULT PART OF BUSINESS.