This blog was written by Isaac Jeffries, an associate of TDi.
Think about your favourite brands. What made you a fan of their work? Was it the way they went the extra mile to delight you? How their pricing structure saved you some money? How they solved a pain point? Maybe they created positive social impact?
The fact is, every successful business you can think of runs on the back of a well-designed business model. This applies to every type of organisation – including charities, social enterprises and internal teams within larger companies.
What do we mean by a Business Model?
We’re describing how your company can constantly remain Desirable, Feasible and Viable.
These are the Three Lenses of Innovation as coined by IDEO, and every good business needs to exist at the centre of the diagram. We call them Lenses, because they’re a way of examining one aspect of your business. Each lens will highlight different strengths and weaknesses, and by looking at all three, we can create strong ideas that make money.
Desirability is about understanding your customer, what motivates them, how they engage with you and what makes/breaks a purchase decision.
We need to be desirable to our customer, or else we’ll have no sales.
Feasibility is about how you make everything happen behind the scenes. This includes hiring the right people, using the right tools, working with the right partners, and focusing on the right set of activities.
We need to run in a way that’s constantly feasible, or else we’ll implode.
Viability is about the dollars; how many we earn and how many we spend. No matter your legal structure, you’ll need a surplus to survive –there has to be some money left over at the end of the day.
We need to be viable, or else we’ll go bankrupt.
You’ll probably find it easy to tick off two of the three. That third one is the killer, and it can’t be ignored.
“A Business Model is an elegant expression of how all parts of your business work together for success”
— Paul Steele, co-Founder of TDi
In other words: Why do you want to start this business?
Or if you’re already up and running: Why does your business exist?
J.P. Morgan famously said that behind every decision are two reasons – the good one and the real one. Let’s be frank about the real reasons. What factors are driving your decisions?
Is it about making money?
Is it about creating change?
Is it about building your dream job?
Is it about building an empire?
Is it about a decision made by your board?
Is it about building something you’re proud of?
This isn’t some cliché mission statement; rather it’s a simple description about why you’re building this business.
That way, we know what elements are up for discussion, and which are untouchable.