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Disciplined Entrepreneurship Workbook by Bill Aulet

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STEP 15 Design a Business Model

WHAT IS STEP 15, DESIGN A BUSINESS MODEL?

Consider the different ways to get paid for your product and choose the one best aligned with all of the stakeholders’ interests.

WHY DO WE DO THIS STEP, AND WHY DO WE DO IT NOW?

Wise selection of a value extraction business model can dramatically reduce Cost of Customer Acquisition (COCA), increase Lifetime Value of an Acquired Customer (LTV), and provide you with a competitive advantage. It may even be the difference between your product being adopted or not. You do this now because, for the first time, you have all of the elements from the previous steps to make an informed decision.

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Entrepreneurs usually spend far too little time on analyzing and choosing a business model.

PROCESS GUIDE

I have found over and over again that when talking about “business model” with regard to startups, it is an ill-defined term, if it is defined at all. Still, it is used all the time. I want to clearly define the term for our context.

Business Model = Method to Extract Value for Your Company

The business model is your framework by which some fraction of the value you create for your customer gets paid back to your ...

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