Startup Business Models

Found a very good article on 'Business Modeling for Startups'

The Components of a Business Model

Following are main six components of the business model:

1. Value proposition – a description the customer problem, the product that addresses the problem, and the value of the product from the customer’s perspective.

2. Market segment – the group of customers to target, recognizing that different market segments have different needs. Sometimes the potential of an innovation is unlocked only when a different market segment is targeted.

3. Value chain structure – the firm’s position and activities in the value chain and how the firm will capture part of the value that it creates in the chain.

4. Revenue generation and margins – how revenue is generated (sales, leasing, subscription, support, etc.), the cost structure, and target profit margins.

5. Position in value network – identification of competitors, complementors, and any network effects that can be utilized to deliver more value to the customer.

6. Competitive strategy – how the company will attempt to develop a sustainable competitive advantage, for example, by means of a cost, differentiation, or niche strategy.

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