Why are so many people in the startup community so obsessed with business models?
Strip away all the McKinseyite high-concept clutter around them, and I think you’ll find that nearly all so-called “business models” reduce down to only two important aspects:-
- How the company fits (or doesn’t fit) into a given industrial / cultural / social infrastructure
- How / when / how often the company persuades its customers to pay it for what it does for them.
But we can make this even more straightforward. You see, as far as #1 goes, if you accept your business environment, you’re a lickspittle: while if you seek to change it, you’re a revolutionary who’s probably too bolshy for his/her own good.
Similarly… as far as #2 goes, if your transactions happen one at a time, you’re essentially an egotist, who would prefer to avoid forming any kind of longterm relationship with his/her customers: while if you sell a stream of smaller transactions, you’re far too attached to your customers to be healthy, hence are at heart a leech.
Happily, you’ll be delighted to hear that these form a neat little 2×2 grid, exactly the kind of thing business schools love so much.
Of course, with this matrix in place it become painfully obvious what has gone so very badly wrong with the UK startup sector: it’s full of lickspittle leeches (specifically financial services), at a time when it needs more bolshy egotists.
Where on the grid do your companies sit?