3 tools to help create winning startup business model

Designing good business models for startups is a lot more difficult than it sounds — particularly for first-time founders.

Here are three go-to tools I reach for when designing startup business models.

Tool #1: The Magic Triangle

This is the most surprising entry on the list, because it's just a triangle with four components:

1. Who is your customer?

2. What are you offering to them? (aka the value proposition)

3. How do you produce & deliver that value? (aka the value chain or network)

4. Why does this make money? (aka revenue logic)

Before going deeper, ensure you have compelling answers to these four questions.

Tool #2: Business Model Patterns List

Only 10% of the innovation since the beginning of the industrial revolution involved the creation of new business models.

The other 90% followed an existing pattern. So will your startup.

This is a comprehensive list of all 55 known business models, complete with examples. (link in the comments)

You can discover new possibilities by:

1. Going through this list

2. Overlaying each onto your triangle

3. Seeing what that business might look like.

Tool #3: Business Model Canvas

This might be the only one on this list you're familiar with.

It's a nine-box overview of all the components of your business:

• customer segments

• channels

• relationships

• revenue model

• value proposition

• partnerships

• activities

• resources

• operating costs

Once you have a good working hypothesis of the model, use the BMC to get granular.

And that's it. Three tools you can use in sequence to develop a winning business model.

What are your favourite tools for designing business models?