Johnson Cook

Atlanta tech investor. Entrepreneur.

Johnson Cook - Atlanta tech investor. Entrepreneur.

Nail Your Business Model or Nothing Else Matters





One of my biggest hard lessons learned over my entrepreneurial journey has been the importance of having a clear, focused, and simple business model.  We’ve all been impressed with the successes coming out of Flashpoint at Georgia Tech, and I believe this is exactly why. Flashpoint puts startups through the “pressure cooker of customer discovery” and forces them to power through hundreds of customer interviews in order to build out the Business Model Canvas.

In my first company, we chased our business model for years.  We had some good proprietary technology, so we had some product components. But we also offered services. We integrated the pricing and billing because we wanted to win the deals. We won some customers on variable pricing and some on fixed pricing. We did win the deals because of this, and we did make some money, but it was always hard to see the path to greatness and giant success because we had so many different options ahead of us. We could double down on services, hourly billing, fixed margins and really add bodies and billable hours. Or we could ramp up R&D and accelerate the product side, hire a ton of sales and go down the SaaS path. Choices, choices.

Having too many options can be a bad thing for startups. When I meet with early-stage entrepreneurs, often doing their first startup, I start to see problems immediately when they have to describe (or worse, draw a chart) showing “How We Make Money.

When you’re starting up, you have the world against you. You have a boulder the size of a dump truck that you and you alone have to push up Stone Mountain.  You have so many things to figure out, you can’t afford to be be figuring out a new business model for long.

Be innovative on your product or your service. Be cutting edge and invent a new widget that the world has never seen, but don’t try to do it on a business model. Either sell a product, sell an ad, or sell a service.  Ripoff and duplicate a success story in your space.  Copy a business model exactly.  (Side note: unless you are a black-belt entrepreneur with good funding or know a specific space really well, I’d advise against any business model that is two-sided.)

When the airplane starts accelerating down the runway headed for trees is no time to figure out which direction you want to go. You pick the direction and accelerate, and get your ass airborne fast, or it will be a short trip.




Category: Action
  • Matt says:

    “Avoid a business model that is two-sided.” Ouch…but I get it. Haha.

    March 30, 2014 at 10:51 am
  • Tim Ashton says:

    Yes, a left turn is definitely in order after departure…

    March 31, 2014 at 9:31 am

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