Business model defines what a company does and how it makes money doing that. While there is a lot of talk on business models in startup & venture circles, there is very little study on the various models that a startup could adopt to make money. Though there are 100s of ways to make money for a startup, only a few brings optimum revenue for its structure. The past few years, technological changes has brought whole new business models – from in-game sales of goodies to paying for a book with a tweet – that we can use them as a part of our arsenal if appropriate.
A business model can be designed by a business model canvas as seen below. The key things in a business mode are Infrastructure (key activities, resources and partners), offering (value proposition), customers (customer relationships, segments) and financial elements (cost structure and revenue streams). By using this canvas we can develop the business in an organized way. The next article will cover the major business models used in the world.