I make money right now from freelance — you should hire me, because I’m a delightful human being — and over the last 20 months of doing it, I’ve probably lost five clients on this phrase: “You don’t understand our unique business model.” (To clarify I’ve lost other clients for other reasons, usually revenue erosion/the client not knowing what they want.)
This “unique business model” thing grinds my gears, though. This will be a mini-rant on that. If you have thoughts, leave ’em.
Are any business models really unique?
Back in June 2015, this female VC — who has invested in Birchbox, Warby Parker and other companies — had a nice quote on the new world of business. Her basic idea was this: at this point, anything you want is probably made by 10-12 other companies/people. Someone is going to undercut you on price (guaranteed), because we all love us some cost-cutting plays. This is the whole reason that ‘customer experience’ is rising up as a concept. See, if 12 people make your widget, the customer will ultimately care about (a) the experience and/or (b) price. (See what I just said.)
This whole deal is also called “choice overload,” and it’s a real thing in many industries. When people talk about business being “so busy” and “moving so fast,” this is what they’re really discussing. Digital/mobile made cost of entry a lot lower in many industries, right? Now there are dozens of competitors. A SVP saying “business is moving so fast” really means “I’m scared shitless about all these competitors.” (Usually.)
Do people understand what a business model is?
In my mind, this is a good/important question. Fast Company tackled it pretty well back in 2013. Their point was this: “business model” means a million things to a million people. Some hear that and give you their elevator pitch. Others go into their financials. A third pocket might discuss their ideal customer. Some people just spew the marketing buzzwords they’ve come to associate with the company.
The marketing buzzwords thing is tough. Let me give you a quick example. I worked for a HR software company in San Francisco for a bit, doing freelance. Internally they had a huge set of buzzwords and terms they associated with their work. This is completely normal. Almost every company talks about their “unique value proposition” in some way. But this hurts you a bit in the market, for several reasons — your content uses terms that people don’t Google, for example. Or you begin believing the internal context instead of actually talking to customers, thus you’re discussing “pain points” of yours, not theirs. (Good recipe for going out of business.)
Two things in this section, then: be careful about some guy’s “unique business model” if he’s really describing the financials, and be weary of business discussions rooted in internal terms.
The intersection point
Here’s where we’re at:
- Whatever you make/do, chances are dozens of other people do/make the same thing
- You probably have no idea what your “business model” really is
- (PS it’s going to change down the road, or even tomorrow, as well.)
So no, your business model probably isn’t unique or completely incomprehensible to anyone outside your walls/moat. And really, this shouldn’t surprise us: in a world where 95% of employees say they can’t identify the strategy of their company, are “business models” even in place? Or is it just a document that the three highest-paid guys can access and no one else? (Solid 1971 business strategy: withhold information down the business chain to prove you’re a boss.)
So no, chances are your business model isn’t unique
In reality, you might not even know what it is. But if you are even remotely successful, someone gonna rush in, tweak 1-2 things, and do the same thing you’re doing. You essentially have the same “business model” now, which would defeat the idea of uniqueness.
When people tell me they can’t work with me because I don’t understand their business model, I usually think 1 of 2 things:
- Yes, I should probably do better. (That’s because I have low self-esteem.)
- They probably don’t want to manage this process anymore because they have no idea what they even want.
I’d go out on a limb and say 30 percent of the time it’s my bad, and 70 percent it’s Scenario No. 2. But maybe I’m wrong on that.
You ever seen this when founders/higher-ups talk about their business model? What’s your take?