Backing up your files: The story of every start-up and how well each one fares on their model of operation.

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Start-ups are similar to mushrooms and operating a start-up is similar to mushroom farming.

What are the differences, then?

Well, for the farming business, while you require suitable environment & temperature along with water, soil & fertilizers; running a start-up requires long-term planning & compatible organizational structure along with skilled workforce and capital/investment. Each & every start-up has a background story, a motivation, a need to fill up and obviously the desire to establish a brand name in the intensively competitive realm of the business world. We’ll be discussing the possible models of operation for different types of start-ups and how have they transformed start-ups into major business brands with significant market presence.

 

Let’s consider the most popular business models that have been adopted by start-ups across the globe lately: –

  1. The Middleman model.
  2. The Marketplace model.
  3. The Subscription model.
  4. The Customization model.
  5. The On-Demand model.
  6. The Modernized Direct Sales model.
  7. Freemium model.
  8. Virtual Good model.

The business models mentioned above have been experimented & proven to be highly effective; especially for start-ups.

Now, the types of start-ups: –

  1. The Marketplace; for services, products & professionals [Flipkart, Snapdeal, eBay, Amazon etc.].
  2. The Enablers; for comparisons, analytics, logistics & delivery [CashKaro, PolicyBazaar, CouponDunia, Delhivery etc.].
  3. The Aggregators; for service providers & sellers-buyers [Uber, Zomato, Swiggy, TripAdvisor, etc.].
  4. The Platforms; for discovery, learning, selling, buying & renting [Cars24, Craiglist, eBid, Oodle, Naaptol, etc.].

In the Indian context, numerous start-ups have sprouted all across the length & breadth of the country after the launch of the Start-up India campaign; one-of-a-kind to promote entrepreneurship & boost risk-taking capacity among the youths.

Become job providers than job seekers..!

One of the most prominent reasons for executing the option of initiating a start-up is – the sense & need for competitiveness! Taking the example of Flipkart here; the Bansal brothers saw a possible “monopoly & encroachment” of the online marketplace by Amazon and they came up with a competitive option of their own. Their online-retailing enterprise is based on a good blend of many models… the Marketplace, Direct Sales, Middleman & On-Demand models, to name a few. ShopClues, Jabong, JustBuy etc. jumped up because of the similar susceptibility. Many C2C and B2B type corporates have made a successful position in the market like this.

The significance of models of operation: –

It might be not a big deal when the start-up is in the incubation phase. However, as the business grows, more & more people are involved to run it and then if you don’t have a mode/model of operation, an organizational structure, stratified and hierarchized employer-employee function… believe me, your start-up WILL perish.

Business Planning is one thing, but it has very little or not much to do with the model of operation. Your model of operation includes the finest details on – WHAT are your start-up’s functions. Business planning is done at a later stage and is related toHOW your start-up functions. The terms might be used interchangeably but they are poles apart.

We cannot just point out a flaw in a model of operation for a random start-up and bill everything on it. Things don’t work like that in the business world. An entrepreneur cannot keep jumping from one model to another. This way, he/she can neither have a stable business nor a sustainable one. The success of an adopted model of operation, in the context of a start-up, is solely based on how well its requirements have matched with those of the start-up. Most of the times it happens that a mismatch or the incorrect choice of a model of operation forces the entrepreneur to either shut down the start-up & start afresh or adopt and test another model. For this NOT to happen, one must carefully analyze the foremost requirements and prioritize to address them as soon as a model is adapted to run the business.

Image Credit – Joe Barrios

Models of operation are NOT something to joke around; you’re playing with fire instead..!

Start-ups are sprouting and we can say – ’Tis the season for them because proportionate job opportunities for the ably skilled but unemployed workforce (mostly youths) are just second to none. Start-ups are rays of hope for them and while not everyone is getting success to establish a business, many are also in the mood of not giving up at any cost.

About the author

Kalyan Gali

A technology evangelist who has played the role of virtual CTO of over a dozen tech start-ups globally, with several of them now becoming renowned names in their verticals. I’m a digital professional, leader and strategist. Most of my colleagues and gurus say am expert in business communications, product management, User product design, startup strategies, creative direction and process design.

I love making new networks or professional tie-ups. You can reach out to me if you want to talk numbers, technology, usability or movies.

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