What Is A Business Model?

A Common Misunderstanding Is To Think Of Business Modeling As A One Page Business Plan However A Business Plan Is A Document With A Specific Purpose It Contains A Lot Of Assumptions About Your Business It Also Contains Financial Projections About The Business For The Next 35 Years However These Assumptions Can Hardly Be Tested The Business Plan Remains So A Document That Lives In The Imaginary World Is Not A Business Plan

Another Misconception Around Business Models Is Confusing Them With A Company'S Monetization Strategy Or Revenue Model Although This Is An Essential Piece Of The Puzzle It Is Just One Of The Components Of A Successful Business Model It Is Not Just A Revenue Generation Strategy Revenue

Where Scientists Have Labs Where They Can Manufacture And Run Experiments Entrepreneurs Have The Real World As A Way To Measure Their Assumptions Designing And Running Business Models For An Entrepreneur Is Like Designing And Running Experiments For Scientists Business Modeling Is About Experimentation

Customer Obsession Goes Beyond Quantitative And Qualitative Data About Customers And Moves Around Customer Feedback To Gather Valuable Information These Insights Begin With The Wandering Process Of The Entrepreneur Driven By Hunch Intuition Intuition Curiosity And A Builder Mindset Discovery Of The Product Moves Around A Loop Of Construction Rework Experimentation And Iteration Business Modeling Is About Customer Obsession

A North Star Metric Nsm Is Any Metric A Company Focuses On To Achieve Growth A North Star Metric Is Often A Key Component Of An Effective Growth Hacking Strategy As It Simplifies The Entire Strategy Making It Simpler To Execute At High Velocity Usually When Choosing A North Start Metric It Is Critical To Avoid Vanity Metrics Those That Don'T Really Impact The Business And Instead Find A Metric That Really Matters For Business Growth Business Modeling Is Also About Defining A North Star