How to create a Business Model?

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I want to build a VPN app, but first I want to create a Unique value proposition and business model. Can anyone help me on this?
 

Edvin

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#2
Hi Kalapa,

First, great job on thinking from value proposition & business model before you start your journey.

Second, For the benefit of the forum readers (and search index) I'm going to say that VPN stands for Virtual Private Network, which isolates the cyber communication into its own guarded realm; thereby, securing the communication.
We've discussed the benefit of the VPN in another post, which you maybe able to enrich.

Though VPN technology satisfies the need for many different audience, I suspect that you will do better if you focus your effort on specific segment (i.e. corporate, home user, gamer, tech savvy, newbie, etc).

Given that you have technical competency to write a VPN app (I'm assuming mobile app), you are in a better position to answer your question; that is, what is the value proposition for VPN features.

Start with the end-goal and work backwards; for example, what is the marketability of the solution.
  • Who are your top 5 competitors
  • How do they market the product
  • What is their website traffic and ad spending
  • Is it mobile app, then look at the competitor downloads and estimate revenue from app purchases and ads
  • What percentage of the market do you expect to penetrate
    Remember the above point should give you insight on how much you need to spend to get similar traffic
  • Estimate your impression to conversion; is it profitable?
    • if not profitable, revise your strategy; perhaps look into integrating and combining multiple packages for a seamless solution.
  • Technical Support tickets are a great resource for customer pain points and feature requests; but, you probably don't have access to such entity; so try the following:
    • Look at mobile app comments for issues and feature requests
    • Search competitor support sites and read through their forums to find issues
    • Listen on VPN forums and ask what are their top 10 pain points
  • Look at new algorithm patents that you can license and implement; thus, being early adopter

Though it might seem like lot of work, it is time well spend for evaluating your opportunity-cost.
 

Small to Feds

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Watch out for the Technology Monkey. That sucker will bury us if we don't learn to deal with him.

As a small business counselor I have noticed there seems to be a belief that automation, the Internet and social networking can make the business succeed when in fact the real design of the enterprise itself is lacking (niche, market base, business plan, competitive analysis and financial forecasting)

I hear from many clients who ask, "What Now?" having launched an enterprise that is going nowhere because they are driving the tools and not the car.

I take them back to the garage; design the auto to see if it can run and then apply the wrenches retroactively if that is possible. It is usually a traumatic experience and could have been avoided with strategic and business planning before launch.

Below is a simple test to develop your potential idea for a business.

1. Do you have a product or service niche in mind?

2. Do you believe you have a market for 1 above and the means to reach it?

3. Are you willing to develop a business plan using the tool kit linked below to validate 1 and 2 above before you launch?

If the answer to the above questions is "Yes",use the below planning aids to design your business vehicle and the road map you intend to follow on your journey:
General Planning Considerations

Market Research Guidance
Free Sample Business Plans


When you have completed the above definition and planning process you will then be in a position to astutely select the tools you wish to use along the way and apply them successfully.

You will be able to network your vehicle, pick up riders as industry partners, and attract revenue fuel in the form of customers by marketing and social networking based on the thorough definition and content of your business plan.

In short, don’t let technology make a monkey out of you and your idea as well as raid your treasury before you launch.


tech%2Bmonkey.jpg

Define your business vehicle and its journey first. Then pick the right technology tools to make a successful trip.
 
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#5
I want to build a VPN app, but first I want to create a Unique value proposition and business model. Can anyone help me on this?
Kalapa, without knowing anything about VPN I might not be much help but I would say start with determining your vision of the product/company. As you develop that vision and purpose of the company, I think that your UVP or USP will become more clear.
Hope that helps.
Steve
 

VirtualGlobalPhone

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#6
Hello Kalapa ; firstly welcome to bizwarriors. Good to have you on board here ...

There are 10000's of VPN providers today whats that unique you want to bring in to market makes all that success you seek.

BTW whats that feature you can offer which this 1000's cant ? I am curious ...
 
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Hey, Kalapa :) I decided to make a quick research on your question and I found this source quite useful . It has some helpful info on the importance of a business plan and what it should consist of. Perhaps the scope of the key points will be beneficial to the one you will create. Have you developed your idea yet or it is still as broad as you stated in your first post? I would suggest clarifying your idea, and then take a look at the skills you need to achieve it so that you can get the idea if it's attainable or not.
 
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#8
Your strategy for production your startup work for you will decide its competitiveness in the market. You would want to get a sustainable advantage over your competitors and that starts with the right work model. Now that you see what a business model is and the different types of business models, it’s time to learn what key elements initiate a business model and how to grow a perfect sustainable business model for your company. A large business model focuses on generate and delivering great value to the customers while simultaneously delivering considerable margins. A large business model should also view to avoid buyer dissatisfaction or dissonance and funding problems.

Business Model Plan
  • Acquire high-value customers
  • Ensure sufficiently high margins
  • See if your product is the best solution available
  • Ensure customer satisfaction
  • Decide on the channel and distribution strategy
  • Maintain market position
  • Formulate funding strategy
  • Execute a pilot rollout
 
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#9
Hi Kalapa,

I'd like to support Edvin's comment. There are (among many) two resources that I always recommend for Entrepreneurs:
  1. Business Model Generation, by Alex Osterwalder
  2. Value Proposition Design, by Alex Osterwalder
You can google both of those titles and find Youtube summaries. The first book talks about how to plan a business model using a tool called the Business Model Canvas, then goes on to describe different "patterns," or different ways that business models make money. The second book drills into the Value Proposition and the Customer Segment blocks on the Canvas. Both books have open source tools you can download.

I always start with the customer's problems. I make assumptions about the customer's functional and emotional needs, then I get out of the 'design room' and go and talk to at least 10 people to see if my understanding of their problems is correct. Once I do that, I go back to the 'design room' and think of a solution to their problems. Then I take it back out, try to find different customers, and pitch my solution, once again getting feedback.

Now I've got a validated problem-solution set, but I don't have a way to systematically reach out to new customers. I use the bullseye technique in testing multiple media channels to discover the best way to get my first 100 customers. Gabriel Weinberg wrote the book "Traction," and that's where you can find more info.

Of course there's a lot more to it, but the process above will help get you started.

Dan
 
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