Chris Mance II - Mental Skills Coach

The most common question entrepreneurs get about their business is “how are things going?”

When I get this question I always pause for second while my life flashes before my eyes. Then for 9 out of 10 people I say “everything is going great!” and try to move on to talk about something else.

It doesn’t matter if things are going great or going awful, or somewhere in the middle, I’ll give that same response to most people. I give this response simply because in the case when things are not going so well, I’ve noticed that most people feel as if they need to give you unsolicited advice.

I understand why the urge to offer advice is the instinctive response. It’s an easy way to show empathy to a struggling entrepreneur. The truth is, however, getting back-seat driver advice as a side-bar to an unrelated conversation is useless and potentially offensive.

So unless you are a business coach, mentor, parent, or spouse, it’s best to avoid this line of questioning altogether unless your entrepreneur friend brings up their business to you first.

It’s important that both first-time entrepreneurs and struggling entrepreneurs study the patterns of business models, then choose one to implement. I share the reason why in this post here. What’s just as important is picking a pattern for your unique selling proposition (USP).

USP is a fancy marketing term for “why” your customers would pick you over your competition. This “why” is not a combination of this and that. This “why” is a very specific thing that is clear, simple, and can be communicated to a 2nd grader in one or two sentences max.

If you apply your USP to a business model pattern, you’ll move from implementing a me-too business model into the realm of business model innovation. In the book Business Model Generation (which I highly recommend), there is a section closely related to this concept called Epicenters of Business Model Innovation. The authors share these four main epicenters of innovation:

Resource Driven – When you leverage some unique strength (partnerships, labor, real estate, hardware, intellectual property, or financial) to offer an unusually valuable product or service

Offer-Driven – When you are able to substantially reduce cost/risk or substantially increase performance, convenience, usability, or customization based on the way you do business.

Customer-Driven – When you’re able to provide a product or service to a customer segment or industry that previously couldn’t afford or couldn’t use it.

Finance-Driven – When you create an unusual revenue stream within your industry.  This could be through lending, renting, leasing, or licensing fees.  In addition, you could apply brokerage fees, sell advertising, or provide volume pricing in an innovative way.

With these four main epicenters in mind, my recommendation is to use them as a template for creating your USP. For example, if you are a web designer you could use the offer-driven epicenter to develop a USP for specializing in 24 hour turnaround websites since the competition usually takes weeks or months to complete a project.

If you are a personal trainer who also enjoys cooking healthy foods (or have a partner that does), you could use the resource-driven epicenter to develop a USP for specializing in both being a personal chef to help you clients eat healthily and their trainer to help them exercise properly.

Without a doubt, starting with one of these patterns when thinking about your USP makes things easier. If you need help brainstorming using this method, please don’t hesitate to contact me as I would be happy to help.

I’ve been studying business models for a couple years now. The one thing I discovered about business models that’s most useful for entrepreneurs are the patterns.

My introduction to business model patterns started with the book Business Model Generation.

This book covers a variety of business model patterns applicable to both large enterprises and entrepreneurs. The basic patterns from this book that apply to entrepreneurs include:

The long tail business model – Selling niche products and services to a large number of customers not being served by the mainstream. This is sometimes referred to as Selling Less of More.

Multi-Sided Platform – Selling to two customer segments by offering a (free) product or service to attract a large number customers in the first segment, then selling access to that segment to the second segment.  Selling advertising on an information website is a good examples of this.

FREE as a Business Model – Marketing free products or services to attract a large number of prospects, then convincing a small number of those prospects to convert to paying customers. This is sometime referred to as a Freemium business model.

In addition to these business model patterns, there are a variety of traditional patters not covered in the Business Model Generation that apply to entrepreneurs.  For example, there is the foot traffic business model used by brick and mortar shops and restaurants and the seasonal business model used by tax accountants and holiday retailers, among others.

If you look at each pattern carefully, you’ll see that business model patters have nothing to do with a business’ value proposition (i.e. the product or service).  Instead, the pattern has everything to do with the technique used to acquire paying customers.

Discovering this was the Aha! Moment for me.  It helped me notice how first time entrepreneurs (who usually fail) spend 80% of their startup effort on their product and 20% on their customer acquisition strategy. While seasoned (and usually successful) entrepreneurs flip it.  They spend 80% of their startup effort of their customer acquisition strategy and 20% on their product.

With this insight in mind, I now believe that the most important thing first time entrepreneurs (or any entrepreneur who’s struggling) should do is study the business model patterns, then pick one to implement.