Determining the Right Business Model at the Beginning of the Startup Journey

Have cash flow and/or UR or and/or complete balance sheet validated business ideas properly it can be a provision for a startup to run its business. However, the business idea will be in vain if it is not executed properly business model right. Business model is an aspect that explains how startups can operate and generate value and revenue on his business.

Arrange business model right at the beginning of the startup journey is not an easy thing. Founders not only need to think about how the solution fits the user's needs, but also have to think about how the solution can also generate income for the sustainability and development of their business. In order to achieve this, the founder must continue to experiment to find compositions business the right model for the startup.

To that end, the preparation business model this became a topic in the mentoring activity of the DSLaunchpad 2.0 acceleration program in collaboration with Amazon Web Services (AWS). Through this topic, participants get the opportunity to learn about making business model right for his business with Edy Sulistyo (CEO of Go-Play), Markus Liman Rahardja (VP of Investor Relations & Strategy of BRI Ventures), and Steve Patuwo (Business Development Manager of AWS).

Composing and Visualizing Business Model Canvas (BMC)

In making a business model, the general framework that is quite widely used by startups is business model canvas (BMC). Through this canvas, startups can compose, visualize, and explain business elements that are interrelated.

Founders can use BMC to develop an idea or create a product business model new. Arrange business model canvas It can also show the strengths that can be exploited and the weaknesses that need to be improved from a business. “The business model shows your (startup) ability to relate to customers and also how you bring in your business revenue for your business.” explained Markus Liman Rahardja.

Ada nine elements that need to be included in the BMC, namely: Key Activities, Key Partners, Key Resources, Channels, Value Proposition, Customer Segments, Customer Relationships, Revenue Streams,andCost Structure. "This structure enables you to basically set out what elements are needed to operationalize your business, these elements are important to consider before you execute your startup." said Steve Patuwo regarding the use of BMC.

Business Models Must Also Be Validated

At the beginning of their business journey, it is not only business ideas that startups must validate, but also business model which they carry. At first, the founder may need to do a bit of experimentation to successfully find the right formula for ideas and business model the startup. "Business model it actually has to be validated too, we can't just make assumptions because just because competitors doing it, means that we can doing it, not necessarily.” explained Edy Sulistyo.

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In this validation process, it is important for startups to be able to involve users directly. This is important to know what users think and feel when they use their products.

“How do we want get our hands dirty, trying to understand from the customer directly, trying to understand what do they really need or what problems do they have instead of what we think they have a problem.” added Edy Sulistyo.

Regarding the validation of ideas and business models, Edy explained that one of the indicators that can be seen if the targeted problem really exists and is felt by users is that there are users who are willing to pay for the products or services provided by our startup. "If the customer is actually willing to pay, then we know there is a real problem." he said.

Guessing a Good Business Model for Startups

When asked about what business model which is said to be good for a startup, Steve Patuwo said that if business model This is in line with what the founders want to achieve through their startup. "The one that is true to your heart, what you really want to solve, what are you passionate about." Steve explained.

According to Edy, there is no business model right and wrong, but whether business model is right or not for our startup. for him, business model The best is the one that benefits everyone involved. "There is no such thing as the right or wrong business model, but actually what is clear business model good for sure customer is feeling happy, from the business we feel customers are willing to pay, and the same time in a manner market is also growing, I think that is the best Business Model, everybody is win-win."Eddy closed.

From an investor's point of view, Mark assesses business model which can also be seen from the profitability. This can also be an indicator of whether a startup can be said to have failed or not, not whether the startup can present a product or not. “For me a startup that is unbelievable fail That doesn't mean startups that don't succeed in creating products, but startups that can't create business model good to achieve profitability. So we need to think about it carefully, before we prepare our startup for the customer.” said Mark.

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Make business model indeed a challenging thing for new founders. However, if a founder can compose and explain business model If you own it well, it will not only be useful for the development of the company, but also can attract investors when they see your startup.