Now that the term sheet bartering (i.e. “how come you got more equity worth nothing than I did?!”) is out of the way, we moved on to (re)creating the business model; if you don’t know what a business model is, then this fantastic presentation should give you all the help that you need:
10 business models that rocked 2010 – by @nickdemey (boardofinnovation.com)
It may seem trivial, but just getting this down with the absolute minimum of lines, and icons (representing our features and benefits etc.) was very difficult but absolutely key. We changed our business model a number of times (esp. around how we charge for our services) through this exercise!
Hint: If you find a model here that’s fairly similar to what you have in mind, then modifying it is a great way to jump-start the process!
[AJC: we ended up choosing a model fairly similar to Groupon’s, although our startup has absolutely nothing – well, very little – to do with coupons and group buying … I’m guessing that every second VC pitch for the next couple of years will start with “Like Groupon, we” at which point the VC will quickly show them the door; a sure sign that copying Groupon’s business model is a VERY BAD IDEA … but, the general ‘shape’ – graphically – of their model seemed to fit our business concept]
If you want to give this a try, and I recommend it, start by downloading the free powerpoint template from the Board Of Innovation’s website here.