Seven Major Business Model Trends Founders of Startups Need to Know


Over 9 out of 10 startup companies will fail within the first few years they’re in business. This is one of those sad but true facts about starting a company that’s never really changed. New firms face dozens of challenges, and you’ll need to be prepared to face these problems if you plan to survive over the long haul.

Some of the most common reasons that startups tend to fail to include:

• They sell a product or service for which there’s no market
• Their products are good, but they’re not user-friendly
• They lack a clear business model
• Approximately a quarter of startups simply run out of cash
• Around 25-35 percent of startups fail because they don’t leverage virtual teams
While these are some of the most common mistakes entrepreneurs make, there are countless others to be on the lookout for. You’ll need to keep this in mind so you don’t suffer the same fate. Think about the so-called dot com companies and how many of them went out of business seemingly overnight.

This is because they were never able to find a business plan that actually worked for them. Many of these companies also made critical financial errors. They focused on marketing and hiring rather than putting together a solid growth strategy.

Having a clear plan from the beginning can drastically reduce your risk of going bankrupt. The latest trends in modern business model formation are making it easier than ever for new entrepreneurs to find an online model that works well for their particular use case. Some of these trends continue to grow and change on a daily basis. It’s up to you to take advantage of this dynamically growing field. 

Perhaps most importantly, these trends have fundamentally changed the way that small businesses look for new clients. Have a look at all of these new modern business model formation paradigms and consider how they can fit into your plans to start a new company: 

1) Online Crowdfunding & Fundraising

Starting a company from nothing requires a massive infusion of capital. That’s why so many firms have turned to crowdfund and fundraising sites. Unfortunately, these sites are ripe for abuse and this has hurt consumer confidence. Thankfully, legislative trends are starting to tackle this problem and is thus making this a great way to raise money all over again.

Crowdfunding sites are cracking and making sure that people don’t abuse their services. That’s helping to make them attractive to non-profit startups as well as companies that plan to fulfill a specific niche. If you can get a loyal following, then you can raise money as long as you make good on your promises and deliver quality products and service. As soon as people start to truly believe in what you have to offer, you might be able to attract recurring donations from satisfied clients. 

2) Blockchain-based Business Strategies

Online payments have caused a ton of headaches as of late, and several major retailers are trying to fundamentally change the way that their payment systems work. Cryptocurrencies are thus being looked at as a major way to attract new buyers. If you’re running a brand new eCommerce site, then consider adding some way to accept blockchain-based payments. You might also consider using blockchain-based transactions in some other way. A few startups have used this technology for managing receipts, for instance. 

3) Shared Economy Business Structures

While you might not have heard of the shared economy business model, you’ve surely seen it in action. Companies like Airbnb have helped to popularize it. If your business requires a physical exchange of goods or services, then you can work with fellow entrepreneurs to fulfill customer needs. Think of new and exciting ways to turn your customers into partners. This is precisely how online auction sites such as eBay evolved so quickly. Since outsourcing seems to be on the rise everywhere in the developed world, you can be sure you’ll find plenty of willing people who believe in your vision. 

4) On-demand Service Dispatches

On-demand dispatching leverages a dedicated online platform to send human and mechanical resources out to where they’re needed most. Lyft, Uber and other ride-sharing businesses have revolutionized the industry using this model. Some firms that manage dog-walking and grocery shopping apps are starting to make heavy use of it as well. 

5) Drop Shippers

While drop shippers have gotten something of a bad name because of their tendency to run out of needed merchandise, the rise of no-fee drop shipping directories is helping to solve this problem. These sites don’t require small business owners to pay anything for their use, which means drop shippers won’t have to pass any additional expenses onto their customers. Since these directories are constantly updated, users will always know where to get new merchandise. 

6) Monetize Open-Source Code

Developers have to make a living, which is hard when open-source software is practically given away. Nevertheless, the open-source industry is quickly becoming a bigger business than ever before. Some distributors are starting to encourage people to invest in support packages while otherwise are selling add-ons that provide compatibility with copyrighted server technologies

7) Subscription-Based Sales

Even the for-profit businesses have gotten in on the concept of selling support contracts. Startup companies often provide their customers with a free version of their products that work quite well. They then sell additional modules that work with them at a fixed monthly cost. This is precisely how Grammarly and other editing sites survive. 

Adapting a New Model

Countless new startups rely on these trends. Predicting the future of the free market is difficult even for the most seasoned experts. However, having a solid business plan, to begin with, is a recipe for success. Consider these options, but don’t feel afraid to tweak a few things. Once you find something that works for you, you should start to experience the growth you were looking for.

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