When Should You Change Your Business Model?
Do you need to revisit, tweak, or overhaul your business model? After all, no business, product portfolio, or business model remains the same throughout. But what are the key indicators that it’s time to do so?
Here are four of them:
#1. Growth pangs
One of the earliest indicators to have relook at your business plan is if you are having trouble scaling up. Despite the fact that you have a good product-market fit, are you finding it tough to make it go viral? If that is the case, there is a problem. Expanding your user base is crucial to growth, and if that is not happening at the pace you think it should be, go back to the drawing board and see what can be changed.
#2. Feeling the blues
If the company morale seems to be sinking, it’s time to take action. At PressPlay, we could palpably sense the excitement at workplace going down, and it was a big sign for us. And this is despite the fact that there was no shortcoming in the kind of work that we were putting in day in, day out.
#3. Market reaction
Banking too much on market reaction can be misleading. Initially, we tried to launch our product in 15 cities, thinking something will work somewhere. We learned not to do something like that again -- ever. You can pick up on key indicators in the beginning; your first 10,000 users will give you an idea if it is working or not. Also, if the market isn’t responding, just going by hope and gut is a wrong call.
#4. Emotional attachment
You should not be too attached to your ideas, and this is something we learned the hard way. Of course, it isn’t easy to do it. But working on the same idea in the hope that it will work if you keep at it, is naïve. There is a psychological barrier that you have to overcome here, and also ensure that the team’s confidence doesn’t dip.
Note: It is advisable you don’t bring about the change all of a sudden, and in its entirety. Ideally, you should start moving towards the new solution, but not get into it 100 per cent from day one itself.
You can’t shut something down and tell the team, “We are starting fresh.” It will have an adverse impact on the team morale. When we realized we had to consider newer solutions, we invested only 20 per cent of our efforts into it. Gradually, we increased this percentage and gradually phased out the older business plan.
(As told to Prerna Raturi)