The right business model for your product

How would you decide what is the best business model for your product?

Deciding on the right business model is very important for the product. It does not necessarily mean what is the price of your product.

There could be no price for your product - though that is a myth. For example, we think google or Facebook is free. However, we are never the customers for Google or Facebook. It is the advertisers that are its customers.

What we need to figure out when we decide on a business model are as follows:

Who is my target audience?
Who is my customer
What is the price.
How is the support model going to work
Who are my partners

While we do not absolutely need to price a product, we need to understand how we would make money. For example Open ERP does not price its product. However, its product is not the ERP software but really the hosting, service and training that it offers.

While pricing is an important part, what is more important is in realising who is your real customer and what is your real product.

You might not have your product till you are working on your by-product - which is the software that most of the IT product managers like me are working on.

Check out the following to help you out:

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

Lean Canvas

Comments

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