Getting the Business Model Right for Startups
Getting the Business Model Right for Startups- Some Examples
Wayne Gretzky Starflyers
Here is an example where everything seemed to be going right for this early 1980s startup- a hot sport (Flying Discs), a budding superstar endorsement, great new product with patented 'golf ball' aerodynamics and high tech LED lights relying on persistence of vision for nightime use, a beautiful nightime "flying saucer" effect, focus group testing that loved the product, young hot shot managers (who made all kinds of rookie mistakes, by the way). The only real problem was- no one wanted to play frisbee at night. They wrote off $350,000 of their shareholders money.
This 1996 startup decided to revolutionize the taxi top sign business- make it one standard size and a one buy approach to national advertising campaigns, like the bus board advertising business, only better. Better because- taxis go into higher demographic areas, they run all the time, the Transitus patented signs were internally lit and highly aerodynamic. There was only one real problem- the industry has supported cigarette, political and 'girlie' club advertising for so long that mainstream advertisers avoided the medium like crazy.
Webvan
This late 1990s e-commerce startup decided to bring back the "Milkman" of the 1950s- door to door delivery of groceries. The only real problem is that customers stopped ordering because the cucmbers arrived "too squishy" (Business Week, July 23, 2001). In essence, people still want to pick out their own groceries. This Net Grocer lost $1 billion US on expensive, automated warehouses then tried to cut costs by switching to low cost produce.
| The Motto- "You can never go home again." That means when a business fails, you should spend a few days gathering your wits, trying to understand why you failed and learning from your failure. Then you should pick yourself up, dust yourself off and get ready for the next (ad)venture. Never try to recreate the business- if it failed, it did so for a reason. Even if you come to understand it, don't repeat the attempt. You can lose more years of your career and life fighting old battles again- DON'T DO THIS. |
Blue Heron Storage Corporation
The mini storage business is largely a "Mom and Pop" type of business. Use of the internet is modest indeed in this industry. Why not use one of the strongest elements of the net- its ability to "reverse out the work" to clients and customers at the same time giving customers control over their needs? Here is a system that allows people to log on to the mini storage web site, find their own space, read and submit the standard lease form, pay for it over the web with a credit card on a secure web site, get the gate code, fill in the on line credit check form, generate standard requests for references in a questionnaire format, use an e-bot to detect problems in e-referee responses, go to the mini storage site and put the customer's own lock on the shed. If they don't pay, change the access code.
Entrepreneurialist Culture Home Page