What is a startup? Basics from Steve Blanca
Success consists of a path from one mistake to another without loss of enthusiasm.
Winston Churchill
Everyone knows what a startup is. Is not it so?
I would offer a new explanation for why startups appear: A startup is an organization created to search for a repeatable ( in the English original “repeatable”, meaning “not a one-time model”, NOT “a business model that can be repeated” ) and scalable business model.
Well, what is a business model?
A business model describes how your company creates, achieves and conquers resources.
In simple terms, the business model describes how your company makes money (in your coordinate system it can be success, new users, traffic growth, etc.)
Imagine that a business model is a diagram showing all the connections between different parts of your organization. This chart shows how your products go to customers and how you pay for these products. It also demonstrates the cost structure, how each department of the company interacts with others, how your company is integrated into the market and interacts with partners. Words with words - easier to display on the diagram.
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Many people tried to understand how best to display a diagram or diagram of a business model. My students have been doing this for years, but the work of Alexander Osterwalder is the best I've seen in the last ten years. His chart is a universal model of a business model. Your own business model will have peculiar nuances only.
(By the way, at Stanworth, Ann Miura-Ko and I worked on simplifying this version of the business model for Silicon Valley.)
Essentially, your startup is an organization created to find a repeatable and scalable business model.
As a founder, you start with:
1) VIEWS of a certain product with a set of its characteristics
2) several assumptions regarding all parts of your business model: Who are my customers / users? What is the distribution channel? What will be the price and product positioning? How to create final demand? Who are our partners? Where and how can we produce? How we will be financed, etc.
Your responsibility as a founder is to quickly check whether the business model is correct by observing how buyers' actions correlate with what was assumed in the model. In most cases, damn buyers don't do what you predicted.
Customer Development (“Custom Development”) is a fast development method in which every element of a startup business model is tested after each iteration of development. Agile Development (“Flexible Development Methodology”) is a technique in which the final product is considered complete after each iteration, and the start-up team evaluates development priorities. Lean (eng. - thrifty) startups according to Eric Ries are the intersection of Custom development with Agile development and, if applicable, with open platforms and open source software (approximately the same methodology as in the Toyota Lean system). Production).
Wait a second ... Isn’t the business model the same as a business plan? Yes, something like ... but better! A business plan is a useful tool for describing assumptions about your business, sales, marketing, market size buyers, etc. (investors force them to write, but never read). A business model is a description of how different parts of your business are interconnected.
How to understand when your business model is right?
Only when your revenue, the number of buyers, traffic, etc., regularly grows in full accordance with your forecasts, and investors shine with happiness. The irony is that when this happens, you do not understand that this is your best business model. And most startups change their business model at least once a year. How do you know that you have reached the desired business model that can be developed further?
· A startup is an organization created to enter a replicable and scalable business model.
· The goals of your first business model can be the amount of revenue or profit, the number of visitors or clicks - yes, in principle, everything you agree with your investor.
· Custom and Flexible Development is a good way for startups to quickly “scroll” and test their business model.
· Most startups change their business model several times.
PS for the translation of this article by Steve Blanca to thank Rinat Garipov , who does not yet have an invite to Habr.
Winston Churchill
Everyone knows what a startup is. Is not it so?
I would offer a new explanation for why startups appear: A startup is an organization created to search for a repeatable ( in the English original “repeatable”, meaning “not a one-time model”, NOT “a business model that can be repeated” ) and scalable business model.
Business model
Well, what is a business model?
A business model describes how your company creates, achieves and conquers resources.
In simple terms, the business model describes how your company makes money (in your coordinate system it can be success, new users, traffic growth, etc.)
Imagine that a business model is a diagram showing all the connections between different parts of your organization. This chart shows how your products go to customers and how you pay for these products. It also demonstrates the cost structure, how each department of the company interacts with others, how your company is integrated into the market and interacts with partners. Words with words - easier to display on the diagram.
')
Business model diagram
Many people tried to understand how best to display a diagram or diagram of a business model. My students have been doing this for years, but the work of Alexander Osterwalder is the best I've seen in the last ten years. His chart is a universal model of a business model. Your own business model will have peculiar nuances only.
(By the way, at Stanworth, Ann Miura-Ko and I worked on simplifying this version of the business model for Silicon Valley.)
What does the business model have to do with my startup?
Essentially, your startup is an organization created to find a repeatable and scalable business model.
As a founder, you start with:
1) VIEWS of a certain product with a set of its characteristics
2) several assumptions regarding all parts of your business model: Who are my customers / users? What is the distribution channel? What will be the price and product positioning? How to create final demand? Who are our partners? Where and how can we produce? How we will be financed, etc.
Your responsibility as a founder is to quickly check whether the business model is correct by observing how buyers' actions correlate with what was assumed in the model. In most cases, damn buyers don't do what you predicted.
How do different software development methods relate: Customer Development, Agile Development, and Lean-startups?
Customer Development (“Custom Development”) is a fast development method in which every element of a startup business model is tested after each iteration of development. Agile Development (“Flexible Development Methodology”) is a technique in which the final product is considered complete after each iteration, and the start-up team evaluates development priorities. Lean (eng. - thrifty) startups according to Eric Ries are the intersection of Custom development with Agile development and, if applicable, with open platforms and open source software (approximately the same methodology as in the Toyota Lean system). Production).
Business plan or Business model?
Wait a second ... Isn’t the business model the same as a business plan? Yes, something like ... but better! A business plan is a useful tool for describing assumptions about your business, sales, marketing, market size buyers, etc. (investors force them to write, but never read). A business model is a description of how different parts of your business are interconnected.
Conclusion
How to understand when your business model is right?
Only when your revenue, the number of buyers, traffic, etc., regularly grows in full accordance with your forecasts, and investors shine with happiness. The irony is that when this happens, you do not understand that this is your best business model. And most startups change their business model at least once a year. How do you know that you have reached the desired business model that can be developed further?
Repeat one more time:
· A startup is an organization created to enter a replicable and scalable business model.
· The goals of your first business model can be the amount of revenue or profit, the number of visitors or clicks - yes, in principle, everything you agree with your investor.
· Custom and Flexible Development is a good way for startups to quickly “scroll” and test their business model.
· Most startups change their business model several times.
PS for the translation of this article by Steve Blanca to thank Rinat Garipov , who does not yet have an invite to Habr.
Source: https://habr.com/ru/post/82058/
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