ClassroomX Speaker Spotlight: Christina Bechhold Russ on “How to build a badass business model”
Got a killer a business idea but not sure what to do next?
Having spent the last 5 years at Samsung NEXT investing in seed to series B companies across mobile, consumer electronics and display technologies, as well as previously working on Wall Street and being an entrepreneur herself, Christina has firsthand experience deciphering which models have “reasonable unit economics that can sustain a company to profitability”.
With that knowledge, she will walk through the practical steps necessary to conceptualize, develop, and execute on your plan.
Given the recent market pushback to the purely growth-focused mentality, Christina expects now to be the time when venture investors will start looking more closely at the fundamental building blocks of potential investments, and whether there’s a viable business model.
She believes many of the most successful startups we associate with radically transforming various sectors of the economy – Airbnb in hospitality, Zipcar in transportation, or Warby Parker in prescription glasses for example – aren’t so much employing a new technology or material to fundamentally change how something is done, but innovating around business models in traditional industries instead.
“Ideas are easy; businesses are hard,” Christina says.
In order to create a viable company, it’s important to develop your business model as a strong foundation. Christina goes on to explain that a business model is a story where your objective is to capture, create, and deliver on the value your customers want.
In order for a business model to be effective, you must start by answering these three questions:
- Who is your customer?
- What does the customer value?
- How do you deliver that value at an appropriate cost?
After an entrepreneur can answer those questions, it is time to move into the developmental phase of their business plan. The first step of the development process is the “design” of the model. In this phase, entrepreneurs should focus on defining the opportunity, sizing the market, determining distribution, creating demand, and assuming financials.
Once they’ve designed and implemented their business model, Christina says it’s important to “test” the model by employing the OODA Loop to understand what is and isn’t work. The OODA Loop developed by Air Force strategist John Boyd is the cycle of observe-orient-decide-act.
“Running through it you should be able to quickly determine what adjustments need to be made and whether a small iteration or major pivot will solve for the weaknesses you identify,” Christina says.
Entrepreneurs should use their findings from the OODA Loop to iterate and pivot where necessary. However, it’s important to note that “the need for iteration will be different for every company. And most often it will come at a time when a new product or service is being added or when a new market segment is being developed.