When your business model is broken.Sep 01, 2022
If you have flat or declining revenue, your business model is broken.
When I am vetting ventures seeking capital, I vet the business model.
And more VC won't fix a broken model.
When revs are flat or declining, the market is simply rejecting what you're selling, the way you are selling it.
The result is bad Product/Market fit.
It's like a deadly disease, when you have it, you'll die unless you fix it.
And whether you are leading a new startup or an established business, if you have low, slow, or no revenue, your model is likely broken.
So how do you fix a broken business model?
You'll need a rigorous vetting process. The tool I use for vetting is Lean Business Canvas. It's a 1-page business model template that helps deconstruct a business idea into key assumptions.
It facilitates a white-board vetting process forcing you to work through 9 major questions about your model. The process forces you to dig deep.
For Example: List your customers top 3 problems?
Seems easy right. But with each answer, vetting means you challenge it with a WHY? And when you answer that, you ask why again. You go at least 5 whys deep each time.
This is vetting. This is rigorous.
If we can poke holes in your model in minutes, you didn't vet your model. Happens more often than naught.
You see, the entrepreneur with a broken business model most often lacks true vision and diligence.
It's a Biblical truth.
The plans of the diligent lead surely to abundance and advantage, but everyone who acts in haste comes surely to poverty. (Proverbs 21:5 AMP)
Why do founders resist? The root is pride and ego.
Pride goes before destruction, And a haughty spirit before a fall. (Proverbs 16:18 AMP)
When I'm struggling through building out a business model, I'll spend an enormous amount of time with God vetting my canvas. Why?
>> Because He has the perfect answers to every question.
To get unstuck, seek out true vision and diligence from God. Take your time working through your business model, the fruit will follow.