What's the best way to evaluate and implement new business models?

1 Identify your assumptions

The first step is to identify the key assumptions that underlie your new business model. These are the hypotheses that you need to validate or invalidate through testing. For example, you might have assumptions about your customer segments, value proposition, revenue streams, cost structure, channels, or partnerships. To make this process easier, you can use a tool like the Business Model Canvas or the Lean Canvas, which are visual templates that help you map out your business model on one page.

2 Design your experiments

The next step is to design experiments that can test your assumptions with real data and feedback. You want to design experiments that are cheap, fast, and reliable, and that can measure the most important metrics for your business model. For example, you might use surveys, interviews, landing pages, prototypes, or minimum viable products (MVPs) to test your customer problem, solution, market size, or pricing. You can use a tool like the Experiment Canvas or the Lean Experiment Template to plan and document your experiments.

3 Run and learn from your experiments

The third step is to run your experiments and collect data and feedback from your target customers. You want to run your experiments as quickly and as objectively as possible, and avoid confirmation bias or false positives. You also want to analyze your data and feedback and learn from your results. You can use a tool like the Validation Board or the Experiment Report to summarize and communicate your findings.

5 Scale or optimize

The fifth step is to scale or optimize your business model based on your decision. Scaling means growing your customer base, revenue, and impact, while optimizing means improving your efficiency, profitability, and sustainability. You want to scale if your business model has proven to be viable, scalable, and profitable, and if you have achieved product-market fit. You want to optimize if your business model needs further improvement or refinement, or if you face new challenges or opportunities. You can use a tool like the Growth Canvas or the Optimization Canvas to plan and execute your scaling or optimization strategies.

6 Repeat the process

The final step is to repeat the process as you encounter new uncertainties, changes, or innovations in your market, industry, or customer needs. Evaluating and implementing new business models is not a one-time event, but a continuous cycle of learning and adapting. You want to keep testing your assumptions, running experiments, learning from your results, pivoting or persevering, and scaling or optimizing your business model as you grow and evolve as an entrepreneur.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?