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How to create a Business Model?

Discussion in 'Starting Your Business' started by Kalapa, Mar 7, 2018.

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  1. Kalapa

    Kalapa Member

    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?
  2. Edvin

    Edvin MVP Member Top Contributor

    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.
    djbaxter likes this.
  3. Small to Feds

    Small to Feds MVP Member Top Contributor

    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.


    Define your business vehicle and its journey first. Then pick the right technology tools to make a successful trip.
  4. djbaxter

    djbaxter Administrator Moderator Member

    Well, this is your lucky day, KalapaKalapa! :)

    You've heard from both of our Top Contributors when it comes to business planning and modeling. Some great advice there!
    VirtualGlobalPhone and Edvin like this.
  5. Steve41

    Steve41 Member

    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.
    djbaxter likes this.
  6. VirtualGlobalPhone

    VirtualGlobalPhone Moderator MVP Member

    Hello KalapaKalapa ; 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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