There are a few common mistakes we see founders make. Making mistakes is all part of the learning process and the path to success. You might make mistakes you are not even aware of until later on in your start-up when it is too late. There are a few things that we commonly see founders do that you must be aware of. To avoid falling into this trap that can lead to the early downfall of your start-up, check out these five common mistakes founders make.
Not taking any feedback
The number one mistake founders make is not talking to their consumers. The most important thing to do as a startup is to set up a fast feedback cycle and get on the path of constant improvement. Building a product is not enough, you need to a build a product people will want. Founders often fail to do this, they will make a product but do not do the research to see if people will actually buy it. Some founders also fail to take any advice. You need to be open to new solutions and any criticism in order for your startup to be successful. Do not expect the first thing you will build to be great, it does not work that way. Nothing is perfect on the first attempt. Expect to be constantly improving your product with the feedback of users. As a rule, your only shot at building a successful startup is if you build something that people truly love and need.
TIP: Choose wisely the people you surround yourself with, but once you do, accept advice’s.
Hiring too much, too little or not right
It is important to hire the right people to delegate the load but beware in hiring too many people. Sometimes founders will hire too many people thinking that it will solve their problems, in reality in ends up burning through money for nothing. You should only hire people who are insanely great. Otherwise, you will regret it with probability. Plan carefully who you need on your team and make sure you chose the right people who will be able to perform to your expectations and more. Don’t hire people before you have a really clear idea of what you want them to do. Hiring the right staff in a start-up is crucial because any small mistakes can lead to negative consequences that your startup cannot afford to make.
Not being able to let go (Pivot)
It is a hard pill to swallow once you realize your big idea is not as great as you thought. Many founders have trouble letting go of their original idea even after all data suggests against it. You need to be able to make any changes need be if all data and research suggests that your product will fail. However, just because your original idea was not a hit doesn’t mean you have failed. You can easily make adjustments to improve or even pivot entirely. Many successful companies today started unsuccessful but they managed to pivot it into the next best thing. For example, take twitter, a company that started as a podcast streaming software called Odeo, pivoted into a social networking app. Once iTunes came out, the founders of Odeo soon realized they would be out of business and immediately made a change that resulted in one of the major social networking apps of our generation.
Bringing investors too early
It might seem like a good idea to take on an investor when they are throwing a bunch of cash your way since cash is king as they say in the start-up world. However, taking money from investors too early in your start-ups life is a mistake. It will add a layer of unwanted pressure and expectations you might not be able to provide so early on. It is wiser to use your own money or ask family and friends, as it will give you your freedom. The last thing you need is to add unwanted stress to your already demanding schedule. By taking on investors also means giving up equity in your company. They can have a say on any decisions you might make. Not to mention, you will want to be careful about diluting your company too early on.
Some founders get into start-ups with the motivation of solely becoming rich. That is not all it takes, make sure you are passionate about your business. Its takes a lot of work and it is this passion that is going to motivate you into succeeding. A successful business comes from entrepreneurs who are driven and motivated. This motivation gets them through any obstacles that might be thrown their way. The only reason they are so driven is that they are passionate about what their trying to achieve. If you are in it for the wrong reasons then you will easily give up when things start to get hard and won’t be able to overcome the challenges to succeed.
If you keep these five common mistakes Founders Make in mind then you are already on the right path. It is okay to make mistakes, it is part of the process. In order to become successful a founder will need to fail at a certain point. However, you should “fail fast” as the saying goes. Once you are able to accept your failure you can move on from it, learn and improve. So do not be afraid of failure it is actually beneficial.
Even though you have a great product, it WON’T sell itself. Every founder will have to sell their product at the very early stages and often times don’t have the skills or practice to do so. It is not an easy task, and it is the most crucial part for every company. What’s the point of putting your blood sweat and tears into a product you can’t even sell. So next time you’re negotiating with your first few customers , remember these 10 tips to make sure you close every deal.
TIP #1: Be Passionate
It should be a given that you are passionate about your product otherwise you might be in the wrong business. Share this passion with your clients, nobody is going to trust a product that its own founder is not passionate about, you will lose clients immediately. Show them how much you care about believe in this product and you’ll gain their trust.
TIP #2: Get to know the customer
Closing a deal is more than pitching your product; it is about connecting with your customer and getting to know them and their needs. Build relationships before sales, people are more inclined to buy from people they like. A Linkedin study shows that a salesperson who creates connections with their customers create 45% more opportunities. Ask the right questions and have conversations try to find things you can relate to such as hobbies, sports, kids whatever it might be. Be viewed as a person who is genuine and wants to help rather than just sell. They might not need your product but if they like you they will want to support you.
TIP #3: Don’t oversell
Creating trust and being transparent is super important with your customers. If you break their trust then you’re building a bad reputation for you and your company. Creating a good reputation is especially important for companies in the early stages of their business. Now the worst thing you can do is make promises you can’t keep. Do not commit to things you can’t deliver, its dishonest and will break the immediate trust you have with a customer.
TIP #4: Learn from others
Get ahead of the competition. Check out what your competitors are doing to sell their products, what’s working, and not working with their customers, use this as leverage. Explore products that you might buy and see what those companies are doing. Do your research and learn from other peoples mistakes or other peoples wins.
TIP #5: Improve your pitch
Giving a great pitch is key in a startup. It is not something that comes easy, it takes a lot of practice to master it. Practice it repeatedly until you can amaze your audience. However, don’t focus solely on pitching a presentation, remember to connect with your customer as well.
TIP #6: Persevere
Do NOT give up easily and do not take no for answer! Follow up with your customers without being too pushy.
TIP #7: Know you will not close all deals
Do not be too hard on yourself if you don’t close the deals, it’s going to happen. It’s important to not let that get you down and to keep pushing through it. Do not give up easily just because you lose a few deals it’s all part of the process and you’ll only learn from your mistakes.
TIP #8: Referring to competitors
As mentioned, being trustworthy and transparent is key with new customers. Refer to your competitors and show your customer how your product is so much better than the rest. Do not be afraid to highlight how you’re company differs and even if your price point is a bit more than the competition, stick by your products worth.
TIP #9: Fire bad customers
Talk to the right people, and don’t waste your time and energy in customers who have no use or interest for your product. Focus on the target market and find the right people to sell to. Spend your time with prospects who are ready to buy your solution.
TIP #10: Celebrate the wins!
Celebrate every new customer! It’s easy to get too ingrained in the daily grind of sales and building a company and forget to celebrate the wins. Celebrate every win with your co-founders and your team.
A great way to build a top-notch marketing plan is to use social media data. It’s not just about of a few items being shared and crossing your fingers that it works. You will need to formulate a well-thought-out social media content plan to grow your brand. Here are some tips that will support you on your way.
Firstly, you need to come up with a set of goals that you would like to achieve for your company. This will be the basis of creating a marketing strategy that aligns with your goals. As tempting as it is to imitate a business that is comparable to yours, you need your own marketing plan as everyone’s business goals are different.
For example, say you are running a sustainable cosmetics business. Perhaps someone like you wanted to increase Facebook’s brand recognition by concentrating on a vegan audience. And in their target, they succeeded! So, you do the same thing. But, there is a small problem you didn’t think about, there is beeswax in your products. The vegan community then shuns you for selling a non-vegan product. And to top it off, you get a negative reputation for misinformation. This is why creating your own goals will help you plan a better strategy. Just remember to be specific and tailor your objectives.
The wonderful part about setting goals is that it will help you decide what your values are. Values may get a little bit lost when setting up a brand. So, this is a perfect chance to go back to the origins and see why the organization was set up.
Creating your own objectives will encourage you to prepare a better approach. A major part of setting goals is that it will assist you in deciding what your values are. Values seem to be really, well, respected on social media, so look at why you set the company up in the first place.
Know Your Audience
A big part of boosting your content is to sell it to the right audience. This links in with planning your goals and staying on-brand, too. It’s not just a waste of time to try to share the content with everyone and anyone, but it is also a waste of money as you will not have any returns on your investment. For example, if you make and sell aquarium decorations there would be no point in making a video of an aquarium featuring your decorations in it and then posting it to a page dedicated to dog care.
Just because it’s related to pets, doesn’t make it relevant.
The first step is to research your audience and know them inside out. Collect as much qualitative data as possible. Join many groups that discuss the thing you are selling. It doesn’t matter what type of product you sell, there are many suppliers out there. No matter how niche your product is, there will be some sort of group relating to this. Facebook marketplace is the perfect place to start.
Knowing your audience inside out will help you create content across the board. Whether you are writing a blogpost, social media posts, or even something else entirely, it is important to stay on-brand for your content.
Now you need to see if your marketing strategy put in place is working, and if its not working tweak your strategy. Examine what content is working best at engaging your audience. A lot of analytical tools are available and free to use, like on Facebook for example you can track the number of people interacting with your content and track its performance. Using a forum for social media management and digital asset management (DAM) helps you to look at back-end specifics. This is a perfect opportunity to check if the results are consistent with your objectives. You can also take this chance to follow individuals that are important to you who share your content.
Engage and Respond to your Audience
People love to feel connected, that’s the whole point of social media. Engage and respond to your audience, it will allow them to build a connection with your brand. This is also an easy way to get customer feedback right away. Listen to what they have to say, its an opportunity, if necessary, to build a great customer service experience.
Develop your Brands Tone of Voice
Like we said before building a connection with your audience is key and developing a voice for your brand is also key. To develop a tone of voice for your brand, you need to analyze your target market and see what will resonate with them the most. Once your set on that, addressing situations and sharing content is your way of establishing a voice for the brand. For instance, claim you are a brand of vintage fashion and share to an upcycling blog. Here, you see the points that people engage with and get the chance to promote your brand. A strong tactic is to address situations for the chance to resolve their frustration and look trustworthy to an audience of thousands. If someone writes a comment, answer it, even if it is a negative one.
Use a Content Calendar or Sharing Platform
Use one platform to share all your content to all your social media platforms, it will make things a lot easier and save you a lot of time. Since Facebook and Instagram are now connected, they have built in publishing tools that allow you to schedule your posts for both platforms simultaneously. You can schedule when posts go out and this will help you keep your social medias active without worrying everyday to make a posts. This will also leave more room for you to analyze your audience engagement with the posts and keep an eye out on current events and developments in relevance and e-commerce.
From setting goals to engaging, there are many ways to use social media and the data you get from it, to boost content. Just be aware that content will not be a success on all platforms. That’s because each site is designed for different audiences. If there is content that isn’t being shared as much, try changing the language, picture, or title. Small changes can make a huge difference.
Remember, marketing for your brand is more than just creating content, its about engaging with your audience and building connections with them. Social media is a great place to do this and if you follow these tips you’ll be able to leverage this.
The ability to fundraise is a highly critical skill that every founder needs. Knowing how to raise the proper financing at the right moment makes it easier to carry out the founders’ vision and allows them to concentrate on product and business objectives. Fundraising looks and works differently at different stages of a start-ups life. Raising your first check is frequently the most challenging and daunting. We identify crucial aspects in this post that may assist founders in securing their first investment, as well as resources that connect them to angel investors in that are relevant to their current stage and industry.
Credibility: At the early stages investors are investing in your team rather than the product. Its important to have the right team in place and expertise.
Angel Investors or accelerators at the early stages: Approaching a VC at the beginning is tempting but angel investors and accelerators will be much more beneficial.
Approach: It might seem quicker to use a template and send a mass email but you’ll have a higher conversion rate reaching out to them individually.
Network: The most successful tool for your business will be to grow your network. You can do this through pitch competitions, demo days or check out Montreal’s very own Startup fest or C2 MTL.
In the early stages, its important to build your credibility in order to sell your vision. Investors prefer to focus on investing in people and their vision rather than things. The most successful founders have already existing skill sets, relevant experiences and backgrounds, and existing ties. Investors want proof that the early management teams have worked together before, have had success and be able to execute said vision. Being able to onboard the right people will be an extremely valuable asset to your start-up.
This is especially crucial during the product development stage because businesses do not have the luxury of giving validation through traction, growth, or financial KPIs at this stage. It’s also more difficult to determine and demonstrate product market fit. Simultaneously, some solid techniques for demonstrating product-market fit include signing first clients (even if at a loss) and creating a large pipeline of potential clients ready to acquire the product when it’s ready.
Angel Investors or accelerators at the early stages
There are many different types of investors in today’s Startup environment, each with their own set of criteria and objectives. While venture capital is an attractive and crucial part of the system, it may not be the most appropriate source of funding for the idea stage. Many founders are also enticed to apply to VCs because it is extremely simple to do so. VCs frequently have application portals and intuitive channels on their websites. However, this is a waste of time and resources. Often times they are uninterested in the idea stage and product development. Not to mention, if you don’t get the funding, that can hurt your company from going back for financing in the future.
As a result, early-stage enterprises should contact angel investors or accelerators rather than venture capitalists. These investors are looking for companies in the early stages of development, so they align themselves with start-ups at your stage. Applying to high-quality accelerators early on can have a tremendous payoff for a start-up. They provide access to top advisers, mentors, network growth and advice which results in increased credibility in the founder’s concept.
When engaging potential investors, there are a few things to keep in mind. It’s crucial to be aware of and respectful of other people’s time and effort. Reaching out with a templated email is good, but reach out to each person individually and, ideally, customise each note. Verify emails or your emails will be sent to spam by default if there are too many rebounds.
At this point, your pitch deck is especially important. A clear and concise value proposition, identified problem, suggested solution, team, advisor description, competitors, market sizing, and early traction information are the most critical parts. Make your presentation flow like a story by fitting it into a narrative.
Growing your network is an easy and effective tool that can easily create long term opportunities for your business. Attend events and competitions to promote your business and make it stand out even more. These provide short- and long-term funding opportunities, as well as increasing your competitive edge by giving it legitimacy.
At the early stages, your start-ups best chance at fundraising is applying to an accelerator. The chances of receiving funds are much higher than from an angel investor or a VC. Not to mention, it will be much more beneficial for your start-ups growth as it can provide your start-up with all the tips mentioned here. It will give your start-up credibility, provide you resources, mentor you and give you access to a large network. If your start-up is looking for an accelerator you can visit our accelerator program and mentorship program!
A business model is a comprehensive framework for defining, understanding, and designing your whole business. Defining your business model for your start-up is key to increase your companies long term value and will simplify your operations. Early founders often misunderstand the importance of company models, for a deeper understanding, check out these 50 various kinds of business models, as well as company examples. Use this guideline to help define your next business venture.
1. Franchise Model
Franchising is the best way for a business to expand since it enables the franchisor to license its resources and brand name. For a franchise to offer its goods and services in return for a royalty, intellectual property and rights are required.
Best for a company’s expansion
Can license its resources and brand name
2. Multi-Sided Platform
A multi-sided business model is used by any firm that provides services to both sides of the business, LinkedIn is a great illustration of this, since it offers membership services to individuals looking for jobs as well as HR managers looking for applicants for their open positions.
Offers services to both sides of business
LinkedIn- it offers subscription services for people to find job opportunities but also for HR to find candidates
3. Cash Machine Business Model
This model is also referred to as the cash conversion cycle (CCC). It simply refers to how fast a business transforms cash to goods and services, and then back to cash. This strategy is employed by businesses who have a low profit margin yet have a disruptive position in the market. Amazon, for example, makes a large profit from its online shop before paying its suppliers. Another perspective is that Amazon’s supply chain is based on vendor credit.
Good for companies with low-profit margin
Good for inventory type of business
Amazon-they generate a large amount of cash from their products before they pay the suppliers
4. Freemium business model
This model offers a mix of free and paid services, normally used by tech companies. For example, Software as a Service model (SaaS) or apps would use the freemium model. Companies offer a limited free version of their software or with limited features, to unlock the full software you would need to pay.
Grows business and acquire customers
Good for SaaS or apps
Great initiative to get customers to try the software
5. Subscription Business Model
This approach enables customers to get services by paying a set monthly or annual fee. In this scenario, the business must offer sufficient value to its customers so that they return to the website on a regular basis.
It enables businesses to segment the market and provide a limited number of things in their content under various plans and pricing, referred to as tiered offers.
In a peer-to-peer transaction, the buyer and seller deal directly with each other about delivery of the product or service and payment exchange. Typically in a peer-to-peer economy, the producer is an individual or freelancer owns both their equipment (or means of production) and their final output. It’s not like a normal partnership when a company sells its services to customers (B2B or B2C). It earns money by charging commissions on the service. Uber is a good example of this since the app acts as the middleman to connect a driver with a passenger and the app keeps commission.
7. One-for-one Business Model
Known as the social entrepreneurship model, It’s a hybrid approach that incorporates both for-profit and non-profit services. Many businesses are adapting their business strategies to appeal to socially aware millennials, despite some concerns about its long-term viability. The greatest example is TOMS Shoes, which donates a pair of shoes to a kid in need for every pair sold across the world.
Appealing to socially aware millennials
Long term viability since overtime “buy-one give-one” strategy will become costly
8. Hidden Revenue Model
This model is a revenue generating method in which consumers do not have to pay for the services provided, but the business still makes money from other sources. Google, for example, makes money from advertising dollars paid by companies to bid on terms ( key words), despite the fact that consumers do not pay for the search engine. Many social media companies use this model, especially Facebook. They gather data on peoples profiles and sell them to companies for advertising purposes.
9. Razor and Blade Business Model
In this paradigm, one item (the razor) is offered at a cheap cost, while another (the blade) is sold at a high cost. A printer and cartridge business model is another name for it. The cost of an inkjet printer, for example, was a one-time cost; nevertheless, having a new ink cartridge changed is an ongoing cost for customers. If you have a devoted client base and can establish a lock-in scenario with customers, this strategy is ideal.
Need for recurring sales of an associated item
Continuous flow of revenue
Need a devoted client base
10. Reverse Razor and Blade Business Model
The business model is the reverse of the razor blade business concept. It entails selling low-cost goods to entice consumers to purchase higher-cost ones. This business model employs a one-time offer for the premium product and, over time, generates additional income from secondary products.
Apple; sell apps, movies, music at a low cost but sells iPhone, iPad at high cost
11. Direct sales business model
Products are directly sold to end consumers under this approach, either one-on-one or in small groups (remember Tupperware home parties?). Every sale earns the salesman a commission. Despite the fact that technology has mostly replaced direct sales in many aspects, many businesses still want to provide a human touch to their consumers.
12. Affiliate marketing business model
Companies earn money in this model by promoting, evaluating, and recommending the goods and services of other businesses. Consider websites that provide product reviews. These websites are compensated depending on the number of sales opportunities they generate for their sponsors.
13. Consulting business model
The consulting business model is used by companies that offer consulting services by employing experienced and qualified individuals and assigning them to client projects. These businesses often bill on an hourly basis and/or take a portion of the project’s success as compensation (cost reduction project). This approach is used by multibillion-dollar companies like Mckinsey and Boston Consulting Group.
14. Agency-based business model
An outside company is contracted to perform a particular job under this project-based business model. Businesses that lack internal knowledge have traditionally hired agencies to obtain a customised solution for their requirements. Do you remember Mad Men? Netflix original series about an advertising firm and its clientele. Digital marketing, design & architecture, survey, promotion, media, public relations, branding, website development, social media, and other specialised agencies are examples.
15. User-generated content business model
User-generated content is collected and sold to businesses looking to capitalise on their customers’ ideas and material in order to advertise their products.
This approach is powered by a variety of digital commodities, including videos, reviews, photos, blog entries, testimonials, and any other kind of material produced by brand users. And it’s all done via social media.
16. Online Educational Business Model
This business model is aimed towards the educational sector, including students and instructors, and enables them to access educational materials via flat course costs or subscriptions. It’s a hybrid of freemium, course fees, and a subscription-based business model.
17. Instant News Business Model
This approach focuses on sharing and updating news in real time, without the need of a middleman.
This approach allows trustworthy main or secondary sources to convey breaking news or important announcements directly to their audience via open and dependable channels.
18. Multi-brand business model
This strategy is built on selling more than two goods that are almost identical but compete with each other and are distributed by the same company but under various brand names. It is carried out in order to achieve economies of scale and to establish an empire.
19. E-Commerce Business Model
E-commerce is a simple yet powerful business concept that enables consumers and sellers to connect and trade via the internet (online shop). Business to Business (B2B), Business to Customer (B2C), Customer to Customer (C2C), and Customer to Business (C2B) are all examples of e-commerce business models (C2B).
20. Distribution based business model
This approach is used by a business that integrates with its end consumers via one or a few major distribution channels. Companies that utilize this approach offer dealers, brokers, supermarkets, retailers, and other channels for companies to sell to consumers. Unilever, for example, devotes a significant portion of their income on ensuring appropriate distribution.
21. Drop-shipping business model
Drop-shipping is a company concept that is both cost-effective and interesting. A wholesaler drop-ships goods straight from the manufacturer to the consumer once an order is made on the company’s website. The company owner does not need to keep any inventory and delegates all shipping and logistics to a third party.
Start a niche e-commerce business website with limited up-front cost
22. Entrepreneurship Business Model
Enterprise business strategy is focused on obtaining huge agreements by concentrating on and targeting only large customers. Fortune 500 customers, for example, often have multi-billion dollar budgets. Boeing, Raytheon, SpaceX, and Goldman Sachs are examples of Enterprise business models since their sales efforts are directed at extremely big corporate enterprise clients or governments.
Social Enterprise business model
23. Social Enterprise business model
Social enterprises apply business solutions to social problems. The goal is to achieve sustainability by enabling non-profits to support themselves financially instead of relying solely on grants and donations. Since there are no shareholders in a non-profit organization, the profits from the related social enterprise are completely re-invested in the work of the organization.
24. Direct-to-consumers business model
This approach enables businesses or brands to sell their goods directly to end users. Customers must be retained via very successful marketing campaigns and advertising activities.
25. Family-owned business model
A family-owned company is one that is managed by a family and whose decision-making procedures are overseen by two or more family members. The company’s leadership is handed on to the heir, who will transmit the baton to their offspring.
26. Blockchain based business model
Blockchain, the most sophisticated, futuristic, and contemporary technology, has transformed the whole landscape of global transactions using decentralized network systems. Consumers may transact peer-to-peer via a decentralized network, which increases confidence. Tokens are used by blockchain-based companies to generate revenue and to provide Blockchain as a service.
27. Vertically integrated supply chain business model
Vertical integration is where two businesses at different stages of the supply chain join together. For instance, a business that relies on another for its supplies may find that it is unreliable, which is affecting business. In turn, it may vertically integrate with its supplier in order to reduce late deliveries and increase efficiencies. When a business has more control over how a product is manufactured and supplied to end users, it may offer goods to customers at cheaper costs (with a higher profit margin).
28. Combination of chains and franchise business model
This strategy consists of a mix of owned and operated chains as well as licenced shops (franchising). Starbucks is the most well-known example of a business that has both company-operated and licenced locations.
29. Data licensing business model
In today’s environment, a data-driven business strategy has taken on new significance, particularly in the technology industry. Data is a vital component of web technology since it allows businesses to carry out operations and generate money.
Google sells real time data to its partners used for advertisements and customer insights
30. Influencer business model
The influencers business model, works on the basis of the advertising paradigm, earning money by capturing the attention of their target audience. A brand finds an influencer who has a connection to the target audience the brand wants to reach. The target audience could be the brand’s existing audience, or a new demographic the company hopes to reach but hasn’t yet.
The brand and influencer enter an agreement. The influencer then creates content, usually with the brand’s oversight. They share the content with their followers. “When an internet service is free, you are not the customer,” Apple CEO Tim Cook famously wrote. “You are the finished product.”
31. Discount with high quality business model
Supermarkets and department shops that buy goods in bulk and offer them at wholesale prices often use this business model.
32. Nickel and Dime business model
The lowest pricing approach for the fundamental product or service is used in this company model. Because the base price is kept as low as possible, an extra fee is paid for the additional benefits and services that come with the primary basic service. The nickel and dime business model is prevalent in the airline industry. Airline companies that offer various services divide their service to charge for them individually. If a customer wants to pay for these additional services, they have to pay for them separately.
Spirit and Frontier Airlines, for example, are budget airlines that charge fees for extra services such as printed boarding passes, carry-on/check-in baggage, seat choice, priority boarding, Wi-Fi, beverage, meal/snack, phone booking costs, and so on.
33. Aggregator business model
The aggregator business model has come to disrupt every industry. This model, frequently confused with other kinds of platforms, usually involves organizing, under one brand, a very populated sector, such as taxis, hotels, travel, groceries, food, etc.
To make it simple, the aggregator may act as a sort of middleman, but unlike other platforms, it keeps tight control of the entire experience of its users.
34. API licensing business model
Application programming interface (API) is a term that refers to a set of (API). It’s essentially a collection of subroutine definitions, communication configurations, and program development tools. API licensing is a business strategy that offers licensing mechanisms that enable third-party plugin/add-on applications for well-known platforms to be created by the developer community. Developers must also pay a fee to get access to APIs.
35.Crowd source business model
Companies may use the crowdsource business model to get access to operational solutions such as ideas and technology, improved customer engagement, possibilities for co-collaboration, operation optimization, and cost reduction.
36. High touch business model
Customers’ engagement and participation are prioritised in the high-touch business strategy to customise the experience. It’s a phenomena in which a client forms a kind of relationship with the company. Larger accounts need more attention since they pay more and are more loyal.
Buying a vehicle, a home, or business SaaS requires numerous contacts with the salesman
37. Low Touch business model
Of course, a low touch business model is the polar opposite of a high touch business model, in which the product or service is provided with the least amount of client contact. Low touch is ideal for low-cost software solutions where gaining clients is more straightforward.
38. Flex Pricing business model
Flexible pricing is a business approach in which the ultimate price of an item may be negotiated. In other words, buyers and sellers may haggle over the price that best suits their needs.
39. Auction based business model
This concept is built on the opportunity to purchase a product or service via bidding. Although the concept is no longer widely utilized, it is still used in sectors such as antiques, real estate, collectibles, and commercial transactions.
On online sites that trade new and used goods, such as eBay and Amazon, the contemporary version of the auction concept may be seen
40.Reverse action business model
This business strategy adheres to a rigorous pattern of establishing the highest pricing and allowing customers to bid appropriately until the prices begin to fall. Businesses looking for suppliers often utilise a reverse auction. At each subsequent round, eligible providers bid lower and cheaper in order to attract the company and win the contract.
41. Brokerage business model
The brokerage business model gives buyers and sellers a single platform to communicate about transactions. Depending on the featured category, it charges a fee for every transaction between the parties, either from the buyer or the vendor.
42. Bundling business model
Bundling is a business technique that involves combining goods or services to create a bundle that can be sold as a single unit for a cheap price. It is a method of buying many goods and services from a single company unit in a convenient manner.
Microsoft office 365 bundle (PowerPoint, Word, OneNote, Outlook)
McDonald’s combo meal
The Disintermediation Model eliminates the need for outsourcing or the use of a third-party middleman. In reality, businesses that follow this model interact directly with clients and consumers via various channels such as the internet. Tesla is a good example of this since clients will go through their website or application for service. It creates a smoother more efficient customer service for their clients.
44. Fractionalization business model
The fractionalization model involves selling a product or service for just a portion of its intended use or in distinct portions. It’s a technique that separates goods and services into subcategories to provide diversity to the products while charging individually for each category.
Example selling pizza by the box or by the slice
45. Pay as go (utility) Business model
The pay as you go model makes profit based on how much a product or service is used. In recent years, governments and NGOs have used the Pay-As-You-Go model to deliver common commodities like solar panels to rural communities, which they pay for over time. This model, for example, includes businesses that provide power, water, and mobile phones, as well as Amazon Web Services.
46. Product as a service
This model sells the service of a product instead of the product itself. For example, at a printing shop you can pay to use a printer. Therefore, you’re paying for the service of the printer.
47. Standardization business model
Standardization refers to the process of making a once-customized service general. This attracts customers because of the convenience and cheap costs. For example, Coca-Cola uses a global standardization in marketing keeping its design and theme the same even in countries with different languages.
48. User base communities
User-based communities make money by creating an engaging platform where users may connect with one another while also advertising. Subscription and advertising fees fund this model.
49. Leasing business model
Leasing is the practise of renting rather than selling big or high-profile goods such as machinery and technological equipment.
Home Depot (tool rental)
50. Pyramid Scheme Business model
A pyramid scheme is a business strategy that is unlawful or contentious. Rather than providing investments or selling goods, the business works on the single principle of recruiting members by offering them a return in the form of money or services if they agree to enrol others in the scheme.
Social media runs our world, there are so many different types of platforms available each with its advantageous and disadvantageous. Choose the right platform for you and your business based on your goals. Develop a plan on what you want to get out of from using social media whether its to create brand awareness, sell product, marketing etc.
Pros: Marketing, brand awareness, feedback, communication with target market, advertisements for your business
What is now great about Instagram is that it is now connected with Facebook. You can post simultaneously on your Facebook and Instagram all through their publishing tools. Its easy to use and you can share content all from one platform. What puts Instagram ahead of the others is its ability to use user generated content marketing. This is a type of marketing that is created and shared by your consumer. There’s an ever growing popularity with influencer marketing and it is a very easy and cheap way to market your business. Instagram is your best place to leverage this. It can also easily be used as a sales platform.
Pros: UGC/influencer marketing, young target audience, sales platform
Instagram can connect with your Facebook accounts, making your lives 10 times easier. You can post simultaneously on your Facebook and Instagram all through their publishing tools. Its easy to use and you can share content all from one platform. What puts Instagram ahead of the others is its ability to use user generated content marketing. This is a type of marketing that is created and shared by your consumer. There’s an ever growing popularity with influencer marketing and it is a very easy and cheap way to market your business. Instagram is your best place to leverage this. It can also easily be used as a sales platform.
Instagram does have limited capabilities compared to Facebook in terms of content to post. You also need to put in a lot of time in creating content that matches your brand and overall create content that will appeal to the audience.
Pros: Networking, business information, advice, opportunities, contacts
This is the place to go when you want to find new opportunities and create new contacts. You can easily grow your network through this and prompt direct business relationships. You can share knowledge and expertise and get advice. LinkedIn focuses on building business relationships and not for marketing to your consumer but rather to create business opportunities. You should create a page to share information about your business and provide updates on its performance.
Pros: Ideas, discussions, information, Discoverable on Google
You can generate content on Twitter through tweets and messages. It is a good place to share ideas, thoughts and to share information. Tweets can also appear in google results, which is unique to the other platforms since Facebook and Instagram do not do this. You can promote content through hashtags and find tweets with a Google search.
The variety of content you can post is limited. If you have visual content created for marketing, leave those for Instagram or Facebook.
Using social media has become the primary method for marketing for many companies. Marketing strategies are consonantly evolving to leverage each social media platform. Keeping an active social media presence for your business is extremely important these days in order to reach your audience and raise brand awareness.
It is always difficult piecing together your start-up story in a deck at the very early stages of your business venture. The early stages are crucial in the growth of a business and acquiring investors are quite tricky. Creating the perfect pitch deck will allow you to smoothly deliver your start-up story to investors to secure that funding. It requires a lot of time and detail and how you piece this together will be the foundation in delivering the perfect pitch to investors. The key elements that are essential in the deck are as followed: problem, solution, product, traction, team and vision.
At the very beginning of the deck, the slides should start with a one-liner description of the business. This slide is literally one line or tag line that gives some insight on what the business is at the start. Its short and sweet, be creative!
The first key element you want to jump into is the problem. This is a great start to the pitch deck as it will allow for the smooth transitioning of the rest of your story. Identify the problem in a clear bold manner. This will intrigue the investor to continue onto investigating what solution you bring to the table and in finding out how big and real is this problem. Its important to keep this slide short, you can go into further detail in person or in a document. For the purpose of the pitch deck, it should remain short and straight to the point
You pointed out a problem now provide your solution! A good format is description of the solution followed by a few points as to why your way is the best way. Following that, you can proceed two ways either: go into how it works with a few screenshots/demonstrations or go right into your vision. Since all stories are different and depending on what your business is, choose as you see fit based on your start-up. If your startup does not requires much explaining, go right into the vision of where you see your simple concept growing into something massive in the future. If the vision slide is not included in this section it can be included in the end as well.
Convince your investors your solution is scalable! Its time to give your start-up some credibility with some data. This slide can be “where were at today” showing the kind of attention and momentum your start-up has gained. For early stage companies, this momentum can be the amount of users on a wait-list for when the product is ready or some early users your product has gained. Investors care about the last 3-6 months and the next month. Having a weak 3-6 months prior will lose many investors, if your next month is weak then you’ll lose your momentum. If you can, time your raise according to that.
A great additional add to this section would be to add testimonials from some of the users or clients. This shows that your product is already in use by real people and is already creating a buzz. This is the section that will excite investors.
You’ve sold the investor on your ability to execute your solution, so now you should tell them how big the market is. Using graphs and charts from credible sources that can easily present that there’s a huge market opportunity is and that this company is venture scalable.
What is in store for your company in the next 10 years? If you did not already include this slide now would be a good time. This will show how you plans to take this simple solution to a massive company and what great things it will accomplish.
Introduce the dream team who is going to build this. Include the main team members with titles and summaries of past roles. This will indicate why they’re fit for to build this start-up. This can be done in one slide without going too in depth about each member.
The ask & funds slide
How much funding will it take for you to drive this business? The ask slide should be left for the end of the pitch deck. Include how much funding you will need to bring this company where it needs to be and what does that money get you. How will the funds be allocated and what will you be doing with it. What does that mean for your company?
A thank you slide with your contact information is appropriate for the very last slide. For example, add an email, LinkedIn, company website or social media.
These are the key elements that every deck needs in order to successfully get across an investor. The order in which you present the key elements should follow the order listed here. However all start-up stories are different and may take a different flow. Some other elements that are optional to add could be competitors, revenue model and financials. Since this is a deck, you don’t need to give away all your information at the very beginning it might be better to include this is a business plan instead, however this is also your business so build a deck that feels right to you!
Securing early funding is critical to a company’s long-term success. As a result, there is a lot of pressure when seeking investors and participating in fundraising rounds. Company leaders must ensure they are completely prepared. For this reason, first impressions are crucial to the success of your business. Creating a good first impression all comes down to one thing: PREPARATION. Founders who think they can bluff their way past anything and can always “wing it”, are setting themselves up for a loss and a missed opportunity. Every opportunity that comes your way is crucial because you might not get an opportunity like it again. You need to give 150% in everything you do.
No matter how amazing your start-up is or how incredibly faring it is financially-speaking, the fundraising pitch has to be: polished, rehearsed and factually on point. Investors will quickly lose interest if they feel they are dealing with a leadership team that doesn’t understand the market or the most critical business metrics. You need to show up prepared and have practiced your pitch to the point where you can recite it in your sleep.
Not only should you prepare for your pitch but you need to prepare for your audience and anticipate any questions that is going to be thrown your way. This comes down to knowing every detail that matters about your business. Being unable to answer even just one question will give the impression you are not prepared. So be ready for anything. Bluffing your way through it takes a lot of preparation, it is something you will not be able to do. Investors will see right through your bluff. Of course, making the pitch too over the top, especially if the numbers are not quite there will likely make it clear that you are trying to substitute flare for substance. To establish a long lasting investment relationship, being transparent, realistic, and concise will go a long way.
TIP: Send Preview Information Beforehand
It is a good idea that you send a sneak preview of your pitch before your meeting. Any teaser information should be sent just a few days before the big presentation. It is best to keep this preview short, including just a few snippets about some of the key data. Do not reveal too much, but you want to ensure that the information sent proves promising so that it piques the investors interest.
Differentiate From What’s out there
In general, investors want to be involved with companies that are innovative. This uniqueness can be product-related, clientele-related, or perhaps related to the way the company handles its operations. In order to do that you need to show how your business differentiates from anything else out there. You need to highlight your uniqueness, your unfair advantage that will have investors interested in your business. The key is to demonstrate your company’s singularity and how that translates to handsome returns down the road. This is where companies can get really creative with the pitch, and hopefully share their story in a way that entices those listening.
TIP: Cover all the key points:
● The problem that you’re solving
● Describe your customer
● Market Size (Problem? How big is it? )
● Why are you best suited to address this?
● Be passionate about the problem you are addressing
● Your solution, why is it 10x better than the state-of-the-art?
● Distribution strategy?
● Monetization strategy
● Current stage
● How will you get to the next stage?
● What will it take to get to 10x from that point on?
This may sound like a LONG list, but it is all the important points to articulate in a short presentation and when you are clear in your flow, it can happen in under 10 minutes.
You might have an amazing product but it is how you communicate it and execute it that will sell your product. Just because you have a great product does not mean it will get you anywhere. It’s all about the first impressions you make. It all comes down to how prepared you are and how you differentiate from everyone else. Being prepared will give you the confidence you need to surmount any presentation you give. Exuding confidence is crucial because it will completely change how your audience perceives you. Your body language will change as will the way you deliver the presentation.
The image you first present usually lasts longer and has more impact than any document you will prepare. Many of these are common sense but I’ve rarely met an entrepreneur who does this well . The fact of the matter is, you only get one chance to make a first impression so do it right!
Dr. Earl Azimov, a man with many talents: ranking tennis player, optometrist, serial entrepreneur, investor and the list goes on. Since 2003, we are lucky to have him as an advisor and board member on the PME committee. He has successfully started multiple companies one of them being Mamma.com. One of the very first search engines made available even before Google. Currently he is the co-founder of Global Clean Energy, where they transform waste into energy with hopes of obtaining a sustainable future. Earl has 20 years of experience in private equity, focusing on seed spatial investments in early stage companies. We had the opportunity to have a chat with Earl where he gave us some insight on what he’s learned over the years as a successful entrepreneur but also what he’s noticed about the Montreal entrepreneurial eco-system.
Q: You’ve had a very long relationship with PME. What are some of the changes you’ve noticed in the program then and now?
My answer to that is that the criteria for the access of capital from the PME fund has evolved over the years. As the fund matured and new fund managers were selected, the quality of the start-up companies have improved as a result of the deep vetting from the fund managers. The understanding of what areas are best suited for PME have better developed. This has allowed for overall better structure and has boosted the quality of the services we provide to start-ups.
Q: How has PME contributed to the Montreal start-up eco-system then and now?
PME has been able to give young entrepreneurs access to capital that they would not so easily be able to get elsewhere. Not only do we give start-ups the early financing, we offer mentoring throughout their entire process. In today’s entrepreneurial eco-system, it’s hard to find a place where they will give you this kind of financing and advice all at once. We really invest in the people that come because we really want to see them succeed. We give them the early seed capital they need and it’s not based on how much revenue they have. PME is the difference between success and failure. In addition, I myself am a mentor at PME and sometimes I’m given a business model where I help them pivot it entirely. I really like to invest in the person rather than the business. It allows me to see their skills and try to work with their model. However, if they don’t fit I help them pivot it and I’ve been successful in doing that almost every time.
Q: you are an accomplished serial entrepreneur. What surprised you most about Quebec’s entrepreneurial environment?
As an entrepreneur starting out in Quebec, I found it very difficult. Many people will disagree but this is based off my own personal experience in trying to gain capital when starting my businesses. I’ve started many businesses here, and each time I’ve had to raise capital elsewhere in the world. This is most likely due to the lack of capital resources that Quebec has but also they are very shy in taking risks. I own one of the biggest search engines in the world and I could not even get a cent out of Quebec’s capital. I eventually looked elsewhere and was able raise about $25 Million out of Monaco.
Q: As a board member and investor, you have seen many entrepreneurs pitch their ideas. What are some of the biggest mistakes people make when pitching?
Over the years, the biggest thing I’ve noticed is that entrepreneurs tend to exaggerate their financials projections and tend to under deliver. I understand that financial projections are just an assumption however, they need to be somewhat realistic and you need to be able to deliver. The dream is sometimes bigger than the reality. Business plans that are not realistic do not go well with the board. I understand you need to pitch the dream but we like to hear what the earliest revenue is and they need to be realistic.
Q: How do you recommend people prepare for a pitch? Any advice?
My advice is, the best way to prepare is to research who your competition is and what differentiates your company from theirs. Show the investors why your company is better than the rest and show them why. Also demonstrate strategic execution of how you’re going to accomplish this through your business plan. Having a good, thought out business plan is key in demonstrating how serious your business is.
Q: Looking back, you’ve seen many entrepreneurs succeed and others not so well. If you can give one piece of advice or a golden rule for an entrepreneur starting out what would it be?
If there is one thing I’ve realized over the years, the difference between success and failure of an entrepreneur is the passion they have. You need to have real passion for the business as this will keep you fighting through any obstacles that you will encounter. You need to believe in the business, yourself and believe that you will succeed. Having this faith in yourself is crucial at times when people might put you down and turn your ideas away. As long as you believe in yourself then you will be able to make it through anything. I’ve seen this a lot when people try to pivot their business. They don’t really believe they can do it or believe in what they’re doing which causes them to fail. What keeps you in the game is the pure passion. Passion and skill are the two key variables for success and the rest will follow.
I do not come from a wealthy family, I worked hard for everything that I have. Believe me when I say, I have had a lot of failures but I never gave up and that’s key as an entrepreneur. No matter what has thrown your way, you keep pushing through until you make it and you will eventually. I’m used to fighting and I like to win, and that’s what it’s all about.
At each stage of its life cycle, a startup needs funding. No matter how great the idea is, its implementation requires certain resources, both financial and material. Thus, each startup gets to thinking how and where they can attract such resources. So, let’s see what startups need and what they can do to get it.
Angel Investors and Venture capitalists are often mentioned together when talking about gaining capital for your company however, they are very different. An angel investor is a individual who uses their own funds to invest in a business. Usually they are successful business people. Venture capitalists funds a business with a pool of money from a professionally managed fund. Angel investors are individuals who contribute their personal money to support startups they find promising. Their primary interest is not only in receiving the return on their investments but also in wanting to keep the pace with the current trends and to share their expertise with younger entrepreneurs.
Venture capitalists, on the contrary, are companies and funds whose financial assets belong to other corporations or funds. In other words, they are responsible to their partners for the money they are prepared to invest into an idea, and this fact influences the approach they take to startup financing.
The best way to get the attention of an investor is through a mutual connection. Investors don’t want to meet you, they want to be introduced to you. They come by many start-ups just like yours bombarding their emails and voicemails. In order to get ahead of everyone else, the best way to attract an investor is by finding a mutual connection between the two of you and use that as your in. Being introduced to an investor through this mutual connection will give you a much better chance at getting a meeting with them or even to have them answer your email. Out of the many start-ups that come their way, the one that will peak their interests is the one that was referred to by someone they know and trust
Use your Network
Surrounding yourself with the right people will become useful to you and your start-up. Creating a network filled with credible people and other entrepreneurs will be advantageous because you can turn to them for help, or they can point you in the right direction. This will serve as an extremely beneficial tool. You can create a network of people by attending workshops, start-up events (ie Startupfest), accelerators or really any networking events. There are so many different events you can attend to that are made specifically for networking. So get out there and make as many connections as you can because you will not regret it.
3. Find an investor that is also a partner, not just a check
It’s important to do research on the investors you want. You don’t want to reach out to an investor who has no experience in the industry your start-up is in. Firstly, you will be wasting your time reaching out to these investors because chances are they are going to turn you down. Second, it will become of more value to your start-up if you chose an investor who has a background that correlates with your start-ups industry. An investor who can help make your business stronger whether through advice or industry connections and knowledge will ultimately serve you better than an investor who has money to offer and nothing more. Look into each investor and research what other start ups they have invested in.
When you approach investors, you’re not just selling them on your product or service; you’re selling them on your team. Having a good team in place will increase the chances at gaining the attention of an angel investor. It gives your company a bit more credibility knowing that it isn’t backed by just you. Not to mention, having a good team is more attractive as each member brings a different background that can contribute to the success of the company. An investor will be ore inclined to invest in a company that is able to deliver in every aspect.
Once you’ve found your connectors, reaching out to them needs to be a sprint not a marathon. You need to set up the email in a way where you can get a quick yes or no response. Follow up within 4-7 days and if you get no response then you move on to the next person. Every email you send needs to be very clear and straight to the point. Everyone gets hundreds of emails a day so you need to be efficient with it. You need to have a clear killer subject line, make it short, forwardable. Give them an easy out therefore you get a quick yes or no response.