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A start up business model checklist: Keeping the lightbulb lit

Start-ups
Read in 4 minutes
Written by: Duncan Custerson

Some ideas are palpable. They interrupt your waking day and creep into your sacred sleep - infiltrating dreams. Other ideas start out somewhat ‘ordinary’, just like the thirty six others you had last week, but this one carved out a groove, gradually sharpening as it gathered momentum the more you offered it your time and attention. Ideas can, of course, be intentional, like solving a problem that needs to be fixed. So, you set about creating the perfect scientific conditions to formulate an idea that would, well… fix it. 

Where your idea originated forms a valuable part of your story. It may have been a frustrating situation that made your teeth grind like a pepper mill and compelled you to find a smoother solution. Maybe, it was formulated in that sweet spot somewhere between beer number three and the Patron shots. Or perhaps a seed was planted when you witnessed a life changing event and you just knew there had to be a better way… a better world! 

‘Creativity is thinking up new things, Innovation is doing new things’

Studies show that the average human has something like 6,200 thoughts a day. Most of these thoughts are obviously more ‘what should I have for dinner’ than a potential Deliveroo lightbulb moment although having said that, the 10.5 billion dollar food delivery business probably germinated from precisely  that simple quandary. I guess that’s what makes an idea so interesting and a founder so admirable - ideas are constant but the choice to pursue one takes some serious…thought. 

So, now that your idea has formed and is taking shape as an early stage startup, take a moment to congratulate yourself for having the perseverance, determination and aptitude to give it life. You’re a founder and here at Hex, we believe founders are the new Rockstars! 

As you’re no doubt getting to know, this is where the real work begins and there are a plethora of challenges ahead. At this point, it’s the old adage - fail to plan, plan to fail - Not very Jimi Hendrix Right? but without nailing the fundamentals you simply can’t stand up next to a mountain. 

How tuned up are you in each of the key business model considerations below? 

Business model checklist

  • Value proposition:
    What problem are you solving and how? What makes you unique, innovative and ahead of the competition?
  • Customer profiles:
    Have you drilled this down to two or three customer types? Creating buyer personas, informed by research data and unbiased feedback. 
  • Revenue streams:
    How will your business make money in the short, medium and long term?
  • Cost Structure:
    Have you made sure your pricing takes into account the buyer as well as your business financials to ensure profitability after costs? 
  • Customer generation strategy:
    How will you bring people to your business, create anticipation and excitement to compel them to buy? And through which channels? 
  • Customer retention strategy:
    Once you have customers, how will you keep them and make them advocates?
  • Processes:
    Do you have an in-depth understanding of key business activities required to make your business model work. The core processes and  workflows will need to be set up to scale as the operation grows.
  • Resources:
    What do you fundamentally need to maintain the business day to day and how does it scale? eg: Key staff, digital platform, warehouse etc? 
  • Funding:
    Your roadmap to funds will help you to maintain momentum. Are you thinking three steps ahead? 

Partnerships and collaborations:

As a founder, it’s a prerequisite for you to be resourceful as well as multitask but you literally can’t do it all... someone had to say it. Your due diligence and desire to future proof will, at some point, find you seeking expert advice and technical expertise, most likely in one or more of the following areas: Direction, Identity, Platform and Growth. 

  • Direction
    Understanding your user and their world is the key to a successful strategy. 
  • Identity
    Give your brand impact and clarity. Communicate who you are, what you do and how you do it. 
  • Platform
    Create interconnected systems that drive conversions and deliver data you can use to improve everything you do.
  • Growth
    Create engaging content and campaigns based on data to resonate with your audience and compel them to act.

These four pillars underpin everything we do for our clients when it comes to digital. We are acutely aware that leaning on expert resources (like us) early in your journey can save valuable time as well as create huge tangible advancement. Recognising the areas you may need assistance and factoring them into your roadmap is a good starting point, from here you can start to explore agencies, recommendations are good (i can think of one) connect with them and get a conversation started.  

You may of course consider trying to find a CTO or technical co-founder. Recent YCombinator research found that 50% of founders of startups valued over £100M met their co-founder in school and 20% at work and 16% were introduced by mutual friends. So, if you haven’t already got someone in mind - Co-founder tinder anyone? 

Your digital platform is the manifestation of the idea you have brought to life, so the partner you chose to work with should provide much more value than a transactional service. Getting the wrong guidance can waste time and money and damage early stage progress. So, If you have decided to explore an agency, here are some tips on choosing the right one!