“Business model is scaled to opportunity.”

July 15, 2014

Filed under: Internship — carlosgieseken @ 2:52 am

One of the tasks the other interns and I have had to work on over the past two weeks was to develop a scorecard to be used to evaluate the businesses we’ve been working with this summer. Part of the purpose of the scorecard is to be able to assess which of the current clients would be appropriate for continuing on into the incubator LAUNCH is looking to begin this fall.

One of the criteria we established for measurement is “Business model is scaled to opportunity.” So this is a measure of how the business plan has been structured to either take advantage of the full market available to the company and it’s product or service, or whether it’s structured to just be grown slowly over time to allow for the business owner to conveniently grow it while maintaining his or her other responsibilities in life. So if you’re making a new kind of widget, are you setting yourself up to be able to sell to all the companies that could benefit from your widget? Or are you structuring the plan so you can make enough widgets in your spare time, after work and on weekends, and gradually, over time, maybe, move up and service the whole market?

scaling-up

Our discussion of this criteria has really opened my eyes. Part of what an accelerator like LAUNCH is there to do is to help entrepreneurs and inventors see the big picture and to lay out the opportunities for growth. One of the questions we asked one of our current clients was: “What would it take to address the scale of the need, not just the scale of the need of the business to survive as a company?”

So in that particular case, the answer was to possibly hire a salesperson or two, and possibly seek outside investment. The difference, in terms of potential customers, was between a few hundred versus 7,000. The particular product in question would benefit pediatric, neuromuscular, and geriatric physical therapy patients. A large motivation for the inventor is to be able to help as many people as he can with his device. With that in mind, scaling the business model to its greatest potential is aimed more at actual patient benefits rather than an explicit profit motive.

 

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