Where do companies come from?

Most companies begin as an innovative technical idea (at least in Huntsville) but the ending successful ones end up as an innovative business model.  Think of the hot companies of today like Google, Twitter, Amazon and Facebook.  While they all have some small technical innovations, they are mostly new business models.

Consider Google.  The original ‘Page Rank’ patent was unique because it sorted things based on popularity instead of other metrics.  That, in itself, is a really good idea and certainly solved some problems librarian’s faced.  When kids want a book, they don’t know the author or the title but they do know their friends are reading it.  The Google method of search takes care of that.  What made Google a big company was the business model which has nothing to do with search.  Google figured out that if enough people searched on a certain topic, then businesses would pay to have their names at the top of the list.  This required them to build a pretty complex business model, providing free search to consumers, receiving large payments from advertisers, and making smaller payments to website owners.

For every company with a great idea to start, there comes a point where they have to adapt to fit into the market (aka, the pivot).  This is usually about the way the company sells and supports their product or service and not about the core attributes of the product itself.  The sum of who make up the target customers, how the company interfaces with them, how awareness, evaluation and purchase is done, the core value proposition, the key resources and partners along with the major revenue and cost streams make up the ‘business model’.  The business model differentiates the truly successful from the also rans.  Few companies pay enough attention to this part of their business.

Early this summer, BizTech will host a one day ‘Business Model Boot Camp’ at our facilities in Huntsville.  If this is something of interest to you, let us know at 256-704-6000 and we will reserve a spot for your company.  Participation is free, of course!