Questions for the founder
A friend shared a new business idea with me yesterday. Some business model questions came to mind, asked here rhetorically. If you get them right, everything else is easier:
How will you get new paying customers?
Why will your paying customers tell their friends and colleagues?
Will this business work at a scale that you can both achieve and are happy living with?
Is it easy to start?
If it is, what will keep others from starting it?
How do you avoid a race to the bottom where you’re trapped making a cheap commodity as a middleperson?
Will it get easier as you go? Why?
What incentive do customers have to stick with you instead of switching to a cheaper or more convenient choice?
Businesses that are cheap to start, depend on providing a useful service at a cheap margin and are largely fungible or invisible are often difficult to turn into thriving enterprises. Customer traction, the network effect and emotional connection can change this, particularly if you build them in from the start.