Every startup starts off with a number of disadvantages against well-set incumbents: they are not the first-to-market, they probably have less money, they have less resources and they definitely have less of a brand (and mindshare) in the market. What startups have on their side is the freedom to innovate on business models.
Business model innovation can come in many forms that include but not limited to:
- Fulfilling the need differently (from CDs to iPods; from iPods to streaming).
- Fulfilling multiple needs at one shot (embedded camera and video recorder on a smart phone).
- Telling a story to create a need that never existed before (introduction of iPad is a classic example).
- Collecting payment based on outcomes (pay per click, pay per action, pay per lead, pay per visit…you come up with your own).
- Create peace of mind while fulfilling the need (hassle-free returns of goods).
Lonk to full article by Rakesh Setty: