In the recent post of this series on vetting your business model concept, I focused on defining the market size as one element in a business model concept vetting feasibility analysis. When discussing market strategy of a business model, it’s inevitable that positioning will be brought up. A company’s positioning strategy is affected by a number of variables that are closely tied to the motivations and requirements of target customers as well as the actions of the primary industry competitors. Before a product/service can be positioned, there are several customer strategic questions that need to be answered such as:
- What are the jobs the customer wants to be done?
- What are their pain-points in doing the job?
- What do they gain by doing the job?
Once these questions are answered, the business answers another set of questions that relates business to the customers:
- What customer needs does the product/service fulfill?
- How does the business relieve the customer’s pain?
- How can the business help the customer get the gains?
- How are the competitors positioning themselves?
- What specific attributes does the product/service have that your competitors don’t?
The positioning strategy should point out exactly how you want your product perceived by both customers and the competition. To help you critically think about this, fill out the following worksheet to organize your business model concept thoughts.
Once you have completed the worksheet, ask yourself if this business model concept positioning will create and deliver the product/service to the target customer. If it is not, go back to step 1 of the vetting process and revise business concept to address a different market position opportunity. Remember, vetting a business model concept is an iterative thought process that should lead to figuring out the product/service you can offer at a reasonable cost, what customer is best suited for this product/service and how much they value it (which means you have to figure out what about the product or service they value). The process is iterative because the product/service, target customer and value are interrelated so it is almost impossible to figure out all three without going back to revise the first…and then the second..and then figure out the third again. Having a great business model means all three are well aligned and fit your own interests and abilities..