Peeling the Miscellaneous Business Model at Startup

Startups don't just talk about turning an idea into a product. Founder Of course you need to think about how the product or service can be sold to the market, how much it will cost, or how to generate revenue and profits.

The things just now are actually closely related to the business model. Without it, it is impossible for startups to thrive. Therefore, founder need to find the right business model according to the product or service they make.

In a series of incubation programs DSLaunchpad 3.0 with AWS, this #TuesdayStartup session will explore all kinds of business models with Co-founders and General Partners Alpha JWC Ventures Jeffrey Joe. Check out the summary below.

Define business model

Jeffrey assessed that there is no absolute formula on how to determine the right business model. ideally, founder could create a business model for the short, medium, or long term. However, based on his experience being entrepreneur, it's hard to think about and plan for everything in the long term.

There are many unexpected things that happen outside of the plan. For that, he judged that sometimes founder need to go through it first to know whether this method is right or not.

This also applies when Jeffrey pioneer venture capital through Alpha JWC Ventures. At that time the industry and digital ecosystem in Indonesia had not developed as it is now. There are many question marks that arise when building a business.

"Just like startups, we can't cheat on business models, even from abroad, because we don't know exactly what it is. For me, we can create a short, medium or long term business model, but balance it with a little intuition, fate, and reckless capital," he said.

Besides that, founder must be very understanding about the business to be run and the market you want to target. In this case, VC has a role to encourage critical thinking si founder in executing business strategy.

"What we can give as advice, especially for early stage, is to understand the market, willing to be invited brainstorming, to open with cooperation. There are many successors in Alpha JWC, as much as 10% of our total portfolio last year became unicorn. For me, the most important successor has a critical way of thinking," he added.

Business model validation

Then, how validate business model? Jeffrey mentions that there is no fitting method for validating a business model. It all depends on the category of business that is undertaken by founder. He denied that growth and profitability are becoming mandatory metrics for validating a business.

He cited his three portfolios, namely Magic, Lemonilo, and Kopi Kenangan. If you talk growth, this metric might work with Magic by using the number of app or user downloads. However, this metric does not apply to Kopi Kenangan considering startups coffee chain This requires finding the location of the outlet first to look for transactions.

"It is just like Lemonilo who might look at the production aspect of [food]. So, it's never one size that fits all. Here, we help founder for brainstorming and do] critical thinking. About what playbook that make sense [for their business]? What can be encouraged? It's not easy," he said.

Jeffrey also underlined the importance of finding point bread a problem and execute it well. He considered that this could be the biggest challenge, as well as the potential to become an error if it was not properly understood by the public founder. Don't let us assume that the solutions developed are needed by the community, can solve their problems, and people are willing to pay for the solutions we create.

Looking for investors to team expansion

In addition to the business model, Jeffrey also talked about other key related factors that could be relevant to the business model. He again gave the example of Kopi Kenangan, which according to him could still be successful without the involvement of Alpha JWC. He even said that Kopi Kenangan had made a profit before receiving investment from Alpha JWC.

If you're not seeking funding, this shows a company's way of thinking that can grow and profitable alone. However, in order to achieve unicorn or say 1.000 o, it may take seven years. Here, VC plays a role in accelerating half the time it might want to achieve.

This is because funding from VCs can help startups strengthen their teams. "Key success factors of a startup is a team, and the best way to use that funding is to add a team. They are the ones who will build great product and marketing" he added.

Impress investors

To impress investors, Jeffrey gave an interesting note as he saw from his experience of meeting many people entrepreneur so far. If we talk about the impression of pitch deck Of course, he will personally see a number of aspects, ranging from educational background, work experience, what he has done before. Likewise on problem who want toSolve and target market.

"If we talk about impressions when we meet in the first 15 minutes, I will see what his vision is to find out how ambitious he is, whether it's just one year or five years. In essence, I want to know critical thinking them because it's important. Even if it doesn't continue to the next stage, I'll still give it feedback. This is my way of giving respect because they dare to take risks and care about the impact," he said.

Regarding educational background, he considered this to be one of the determining indicators founder have a sense of responsibility. There could be founder who have an ordinary educational background, but reap large funding. Vice versa. This is not a full benchmark.

However, he underlined that this sense of responsibility can be translated as effort founder scale up the team. "Company Easter hired people who are smarter than us [founder]. After all, we need to work with people who are smarter than us to move forward."