THE BUSINESS MODEL
The nature of businesses has been changing overtime and with the infusion of technology in a big measure and quite rightly so, businesses look radically different today. Notwithstanding all these changes a business as good as its business model. It has been for this reason that in the celebrated book Built to Last Jim Collins has been able to unravel the magic sauce of the creation of enduring business entities and make them successful over time and space. On the professional leadership the CEOs have been professionally mercenary but had humility it their attitude and behaviour.
What business models should aspire for; first is clock building and not time telling – this is the building of a great institution, more than profits – is to find the business’s purpose and build the “core ideology” around it, preserve the core / stimulate progress – you can dynamically change but for the core beliefs and values, big, hairy, audacious goals – think consistently of making ways to happen, cult like cultures – the culture of the organization, experimenting – try a lot of experiments and keep what works, home grown management – people who grow with the company know the best, and what we are seeing today on a regular basis; good enough is not enough – is to strive to do better tomorrow than you did today.
Before getting into big businesses of the day, a peep into the famed startup story aimed at transforming the nation. Does this business model include building a great institution? The aim is to get as much funding as possible, create an institution leave aside great one is nowhere in the picture. More than profits, here the profits are so difficult to come by if they do, what is important here is to create a valuation hype. No one has the time for experimentation, their push for their thought as visionary and path breaking has been the death knell of any number of the new age businesses, from the founder to the angel are all on ride. Who is taking whom for a ride? If the aim to sell of what you create and are passionate of, then the tenacity of the business does not cut ice.
A business model at the end of the day is that can keep your cash registers ringing. Organic growth even though fast has been an important ingredient of a business model, fledgling businesses don’t last long; it has to be robust in technology, finance and management, otherwise it will fall under its own weight. Being data opaque and tool opaque is the current business model of the IT behemoths, they been successful at cash flows and also deploying products and services what have been transformative in nature. Services for free globally and making money out of advertisements has become the ruling business model. Gaining fullest control over user data, who use the services for free, and monetizing in most innovative of ways for commercial business advancement is an acceptable business model. Seamless collaboration at scale by way of a tech platform, aggregator or a multisided market generically is proven by now. The nitty gritty you practice in this new business model avatar, will create your customized business model.
WITHOUT A SOLID BUSINESS MODEL WITH CONSISTENT CASH FLOW, THE NEW AGE BUSINESSES ARE HANGING IN MID-AIR.