Startup Business Model Considerations

Fantastic post by Christian Gammill -

Startup Delta Force…

From a competitive perspective (e.g. all the other folks out there that will try to enter the same market) the barriers have been dropping over the last few years.

• Customer Acquisition – social media, SEO, SEM, etc
• Economies of Scale – not as big a barrier in web world
• Investment – little to none required to get started
• Pricing – free or freemium makes trial simple
• Distribution – syndication and APIs make partnering easier
• IP – in general the battle has been over users and less on IP
• many more (please comment below)

On one hand, it is nice that all of these appear to be lowering, but remember that all of these make it more difficult to compete once you are in the market. How’s that for duality.

Now, given our current economic crisis and VC ‘challenges’, the barriers to funding have gone up significantly as well.

• Team – higher requirements for caliber of team members
• Product – focus on truly differentiated and not me-too
• Market – is it really big enough to provide investor returns**
• Traction – need more users, partners, patents, etc
• Timing – are you building for yesterday or 2 yrs from now?
• Business - how are you actually going to make money?
• many more (please comment below)