If you have more than one business model, you have no business model.

To be successful, a business must have a plan for short-term revenue and long-term profitability. Early-stage founders may be tempted to think of half a dozen ways the company could make money. Don’t be tempted: five untested solutions are no real solution.

However, sometimes there can be multiple business models that can lead to profitability. The Business Model Canvas approach, which summarizes all aspects of the business in one slide, provides a holistic view of all aspects of your business. However, I think it’s worth narrowing down the pitch deck to two things: customer acquisition and lifetime value.

When recruiting, focus on where you find your customers, whether those acquisition channels are scalable, and how much it costs to acquire a new customer, commonly referred to as customer acquisition cost or CAC.

In terms of lifetime value, research what each customer is worth from the moment they appear on your product until they stop using it. Every dollar spent along the way is the lifetime value of a single customer. From there you can segment your customers into different segments: a category of customers can be people who visit your platform and leave immediately; Another category could be customers who stick around for weeks, months or years.

To keep things simple, it is usually sufficient to divide the total money you have earned from customers by the number of customers. this is the previous average value for these customers. The challenge is to model how long they will last. By definition, you don’t know the true lifetime value of a customer until they’re gone; So here you need to model and make some assumptions about how much time your customers will spend with you and how much money they will spend on the process.

A startup’s only mission is to find a repeatable business model

I’m quite a fan of Steve Blank’s definition of a startup: “A startup is a temporary organization used to find a repeatable and scalable business model.” placed on top for $150 falling from the bottom. Take that $150, throw it back into the top of the machine, and you’ve got a viable, repeatable, high-growth business model.

Source: La Neta Neta

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