When starting a business, people generally go with a few, what I like to call, “methods”.
- Copy & Paste Method
The first method is taking something that has proven to be working in a certain environment & applying the exact same in a similar environment. For instance, a coffee shop that has repeatedly worked in A type of neighborhood is like to work in a different type A neighborhood. Or a website that has a great business success in a certain country can be a great model of business for a different country with similar society. “Copy & Paste” model is one of the most popular & commonly used business models. The pros are that this model doesn’t require much thought or creativity, has proven track record, involves less risk if it’s done right. The drawback is that it generally requires substantial investment of initial capital, most often has a pretty low cap on the max income it can generate compared to the capital invested (Long Buyback Period & low ROI),and, quite honestly, is pretty boring. At some point “Copy & Paste” method gets oversaturated & many businesses using the method either have to evolve & adapt to the new environment or they are likely to go out of business.
- Copy & Paste Method with a Twist
This type takes a business model, improves over it, and applies it in a similar environment or the same environment. Generally, the greater is the “twist”, the higher is the risk for the investment, however, return on investment very often increases with greater “twists”. The right marketing for the right twist can generate very high ROI. The amount of initial capital investment for this type of model can greatly vary, generally it will cost significantly more than “Copy & Paste” method, however, the right minds are able to find some low investment opportunities in this model. For this reason, the model generally appeals to either those who have more than average capital to invest or those who have less than average capital to invest. This method allows operating in competitive environments & still be a success, unlike the “Copy & Paste” method that requires finding a similar noncompetitive environment.
- Borderline Innovative Method
This method involves radically innovative approach to doing business; it can be an innovative product or service or a significantly innovative way of presenting a product or service. Those with this approach usually have next to nothing to invest & most of these ideas (speaking only about the good ones) stay on the shelf for 2 main reasons:
- the person has no discipline, persistence or even a business plan to execute, or has no ability or skills to execute a business plan
- in order to make it work, a large scale marketing campaign is required, and investors with such connections aren’t generally interested in ideas, unless there is some proven sales record
The internet provides the opportunity for some of these to go viral, for that reason we see more of this type of businesses arise in the 21st century, than ever before.
- Innovation
Innovations generally work sooner or later. Unfortunately sometimes they work too late or they get shut down by big corporations or confiscated by the government. As a business venture they don’t involve much risk; the personal safety of the innovator, however, is likely to be at a great risk. If you are good enough to have a real innovation, you better have another innovation of how to protect yourself.