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Most entrepreneurs get really excited when an awesome idea pops into their mind. Even if it is completely new in the market place or already familiar to some, its execution continues to be an important criterion for a successful startup. Therefore, your business will outlive others depending on your big plan and your strategy. You can start by slowly trying to implement your initial idea without considering the market requirements. Or, based on a documented research, you can adapt it to your audience’s needs.

As Ash Maurya highlighted, “The problem is that startups fall in love with the solution too early”. By choosing to take you idea to market without insight from your potential customers, you will face the huge risk of losing focus on two main elements. These elements are essential for discovering if people want your mobile product: the vision and the strategy.

lean business modelHelp your startup do it right the first time!

As a startup you should always be open to changes in order to make improvements. Besides that, the costs of any change in the beginning are lower now than in the later phases. That's why we always advise our clients to share their mobile products ideas with potential investors as early as possible, to collect feedback, talk to future users and hear their opinions. Without getting an external perspective, you would never be able to build a product people would want to pay for.

Based on Seth Godin's theory, a well-done business model has to answer the 4 most important questions every entrepreneur (including yourself) should have in mind when running a startup:

  1.  Why would people pay for your product?
  2.  How would you acquire what you are selling for less than it costs to sell it?
  3. What structural insulation do you have from a price war?
  4.  How will people find out about your business and decide to become customers?

Use all the answers to the questions above to create a strategy. Calculate how much you invest in your business and see if it's worthy. Do not forget that startups live only if the cost of acquiring a customer is smaller than the lifetime value of a customer. Evaluate your activity after a determined period of time and see what worked, what didn't and fix it.

Attributes your lean business model must have

People often start businesses that lose money. Studies show that only 1 of 12 startups survive on the market. A complex and well thought through business model leads to a good strategy. So let's focus on your startup business model and have a look at the 4 attributes that Seth Godin thinks it should have in order to prevent future mistakes:


Take time to see if your lean business model can make profit to survive. A lot of startups just get carried away by ideals and reach bankruptcy. You might have some other objectives that are not money-related, but you must remember that profit has to be on your priority list. For example, Small Giants, a community focused on the promotion, implementation and advancement of successful value-driven businesses, revised the values that they consider mandatory for a Small Giant Company, and hereby included a financially sound business model. In their opinion, even businesses that do not consider profit a key component of their strategy should find a way to look for it, as it guarantees their sustainability.


Here you have to find out how safe your market is and how easy competition can enter and kick you out.


Analyze your audience through your product! Is your mobile app easy to use? The mobile market presents serious competition. Figure out what their wishes and their needs are in order to come up with a suitable product.


Constantly get feedback from your users and fix the errors as soon as possible. Make sure your idea is not a rigid one. The thing with startups is that sometimes you have to change everything if it's needed.

Lean Canvas and Business Model Generation Canvas

A very good place to start structuring your ideas are the “canvases”: the Business Model Generation Canvas or the Lean Canvas. Any of them will do the job for you in the mobile startups industry. These tools can help entrepreneurs build a lean business model that covers the following key elements:

1. The problem. Think of it and note down 3 top problems your product solves.
2. The ones who need you are the customers. Make sure you have a detailed segmentation in order to know exactly who they are and if they are not part of the same category, create a separate canvas for each segment, because the results will not be the same.
For example, when clients come to us, they want to know what kind of app they should develop first. This depends on the audience they build the product for.
3. What is your Unique Value Proposition? What makes you different from the competition and, more importantly, why are customers going to pick you and pay for your offer?
4. The solution. Have you got an MVP (Minimum Viable Product) that sustains the Unique Value Proposition? Customers need evidence to trust you.

business model

5. What is your key activity? In other words, what action do customers take in order to bring you revenue/retention? If you are an e-learning platform, posting a demo or an infographic would be a key activity.
6. Having settled all this, the next step would be to list all free and paid channels you are going to use to reach your customer.
7. How much money do you need? This question needs to get a detailed answer regarding all your fixed and variable costs (Cost Structure).
8. Revenue Streams: You need to identify your revenue model, note what your streams of income are: subscriptions, ads, freemiums, etc. and outline your back-of-the-envelope assumptions for lifetime value, gross margin, break-even point, etc.
9. The Unfair Advantage is the most delicate part of the whole process, because it is harder to find. Jason Cohen has a great article on this subject. He also has a clear definition of unfair advantage: something that cannot be copied or bought.
People often make no difference between the unfair advantage and the unique selling proposition. USP is the element that makes you different, but it's not the skills or assets that help you get there. Take a look at some great examples of unfair advantages.

One company, many business models

None of us are big fans of change. In the mobile world, you must be ready to adapt your idea, reinvent your business, your sales strategy, and sometimes your whole career. Customers want different things today than they did in the past, and will go for different ones in the future. Being aware of their needs and expectations is critical for any type of business, especially for a startup.
By changing your business model you create opportunities. If you want to see a few examples of big companies’ business models, give the following links a try: Apple, LinkedIn and Skype. By seeing older versions of them, you will be able to compare those strategies to their present tactics, products and services.

Always begin with the business model!

You can run a startup with an idea and a well-planned business model. Fortunately, you don't have to write a 100-page business plan for your startup anymore (unless, of course, you are applying for a bank loan). To conclude, the business model helps you:

  • know your market better;
  • see if your solution fits the customers' needs
  • find out what the activities that drive retention are
  • make fundamental business changes in the beginning; it is cheaper than at later stages of the startup;
  • get your MVP ready for the market, collect feedback, gather opinions, make changes.
  • avoid building a product nobody wants
  • identify hypotheses, assumptions and risks
  • plan validation testing
  • find ways to add value or reduce costs

See you in the comments!


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Ilie Ghiciuc, Founder & CEO

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