How did your business idea come to you? Many ideas do not come to us in a logical and structured way, but rather, as random trains of thought. How can you grasp and record your great idea? Business model canvases are a great way to structure a business idea and map out the key aspects. But simply putting your thoughts in that format does not turn your idea into a successful business model. Rather, successful business models have three characteristics; they are desirable, viable and feasible. In this article, we explain the attributes of a desirable startup.
Desirable businesses add value to their target market and solve consumer pain points. To determine whether you have a desirable business model, consider:
- Does it address a consumer pain point?
- How many people have that pain point?
- Are people actively looking for solutions to that pain point?
- Does your value proposition add value to existing solutions?
- Can you reach your target market?
- How will you protect yourself against new entrants in the market?
Collecting Consumer Data
For example, Airbnb addresses a consumer need for short-term and holiday accommodation. Existing solutions include hotels and hostels. These solutions may be expensive, low quality or provide a narrow selection. By providing affordable, high-quality, diverse accommodation, Airbnb brings broader choices to the existing market. Airbnb has vastly increased the choices available, by location and type of accommodation, to give choice to existing holidaymakers and entice more.
Reaching your Target Market
Reaching your target market is key to your business model’s success. Consider what channels will allow you to market your value proposition to early adopters. For example, if your early adopters are university students, think about opening a stall at an open day or using social media to communicate your business to them. Early adopters are often using the latest form of communication, including the most recent and popular social media platforms.
Many startups use direct marketing in the early stages of their business. Direct marketing involves using personal information (such as an email address) to communicate with leads to promote your goods or services. First, you need to find target leads and obtain their contact details. This is a good way to ensure leads turn into sales, but it is essential that you know your legal obligations when engaging in direct marketing.
As your business gains traction, others may begin to copy your unique value proposition by providing a similar product. For example, when Uber first started operating, it was targeting an unmet need for cheaper and more convenient transport. Others soon realised the success of Uber’s business model, and multiple other rideshare apps have since cropped up. Uber’s brand identity has been key to maintaining its customer base despite new entrants in the market.
There are various ways to protect your intellectual property (IP) and, therefore, your brand. Simply registering a business name or setting up a company with ASIC gives you the right to trade under that name legally. Accordingly, it does not protect the IP of your business name. To do that, you need to register a trade mark for your logo and brand name.
A desirable startup:
- targets a gap in the market;
- addresses a pain point; and
- creates a desirable solution.
Therefore, you must understand your target market, develop and test your product through data collection, reach your early adopters with a cost-effective marketing strategy and ensure you can keep your competitive advantage. If you need help getting your startup off the ground, contact LegalVision’s startup lawyers on 1300 544 755 or fill out the form on this page.
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