What is a Business Model?
The 3 Key Steps of Successful Business Model Validation
2. Test your assumptions in the field with customers and pivot if your model is wrong
3. Demonstrate that you have gained market traction using feedback from actual customers
Below is a condensed work plan for what a team actually does to validate a business model and have a chance of winning the IBMC.
Find a Problem
Nail the Pain
Get outside the building and interview customers face-to-face to understand the “job” customers are trying to do, their current pain, and how they solve that pain. Pivot when you discover you are wrong.
Nail the Solution
Develop a minimum viable product prototype and get outside the building face-to-face with customers to test your vision of the solution. Pivot when you discover you are wrong. Repeat these tests until you nail the solution.
Nail the Go-to-Market Strategy
Get outside the building to understand the end-to-end customer buying process, the market communication infrastructure, the distribution infrastructure. Identify the leverage points. Pivot.
Nail the Business Model
Use the facts discovered to validate the revenue model for the business.
Throughout the process learn to change course whenever you discover you are wrong.
Whichever particular method you use, the key steps are to 1) identify your assumptions, 2) get outside the building to test those assumptions, 3) validate the facts with customers and pivot as needed, and 4) identify lessons learned. For the competition, you will tell us about the process you went through, revealing the dead ends and surprises that you discovered along the way.
Remember, the goal is validated learning about the business model assumptions and failing early is a success compared to failing late. If you fail but have a compelling story, submit anyway—you may get the award!