Business Models: Definition, Feasibility, Viability, and Drivers

Entrepreneurship Revisited: In Chapter 1, entrepreneurship was defined as a way of thinking, acting, and being that combines the ability to find or create new opportunities with the courage to act on them.
Moving Beyond Idea Generation: While previous discussions (e.g., Chapter 5: Using Design Thinking) focused on identifying customer needs, the current focus shifts to evaluating the plausibility of ideas and their economic feasibility and viability.
- Feasibility: Answers the question, "Can you do it?"
- Viability: Answers the question, "Can you make money doing it?"
The Business Model: A sustainable business model is essential for a venture to be viable. It describes the rationale of how a new venture creates, delivers, and captures value.
- It encompasses a network of activities and resources that interact to deliver value to customers.
- Working through its components helps entrepreneurs understand: what they are doing, how they are doing it, for whom, and why.
Generating Value: Value can be generated in several ways:
- Fulfilling unmet needs in an existing market.
- Delivering existing products and services to existing customers but with unique differentiation.
- Serving customers in new markets.

Definition: Meeting a unique need, incorporating new features not currently available in similar products or services, and providing unmatched customer service.
Example: Storage Scholars: This business differentiated itself by identifying an underserved target market and offering a much-needed solution for storing belongings.

Definition (from Chapter 4): Introducing new products, services, or processes that are new, novel, and useful. Innovations do not always have to be breakthroughs; they can enhance existing offerings by adding new features or functions.
Importance: Business model innovation is crucial for staying ahead of the curve, enabling business growth, and differentiating a company from its competition.
Innovative Business Model Example: Crowdsourcing:
- Definition: The use of the internet to attract, aggregate, and manage ostensibly inexpensive or even free labor from enthusiastic customers and like-minded people.
- Practical Use: It serves as a form of bootstrapping and a valuable resource for acquiring talent and labor (as discussed in Chapter 12).
- Examples:
  - 99Designs: An Australia-based crowdsourcing platform that connects companies with freelance graphic designers.
  - Fiverr: A global online crowdsourcing site that links businesses with freelancers for one-off niche tasks like proofreading or software testing.

Definition: In the context of business models, disruption refers to smaller companies entering a market and successfully outcompeting larger, established players.
Disruptive Model Example: The Sharing Economy:
- Definition: A model that allows people to rent or borrow goods and services from private individuals, typically facilitated through the internet.
- Major Disruptors: This model has created many disruptive businesses, including:
  - Uber (ride-sharing)
  - eBay (peer-to-peer sales)
  - Airbnb (accommodations-sharing)
- Detailed Example: Swimply:
  - Concept: A Los Angeles-based company that operates as the "Airbnb of swimming pools," allowing homeowners to rent out their swimming pools for a fee via its pool-sharing app.
  - Business Model: Based on the private rental of personal property (swimming pools) to others through a third-party platform.
  - Future Initiatives: Swimply plans to launch "Joyspace," another sharing initiative that will enable homeowners to rent out other personal amenities like basketball courts, tennis courts, private gyms, and indoor theaters.
- Key to Success: The examples of the sharing economy demonstrate that sharing resources can build a successful business model when all participants actively engage, commit, and collaborate within the platform.