Business Models – The trend in "Domino rally " plans.

Posted by Howard
on September 23rd, 2006

Venture dude Josh Kopelman offers up some insight and strong advice when building and evaulation business models. Here is his big concern:

Today, as a VC, I’ve begun to see a trend toward what I call “Domino Rally” businesses. These are business models that require a number of disparate events to occur in order to be successful – and if any one event is missing, the entire business fails.

Here is his great advice:

Rather than have a business model which requires all the moons to line up in your favor, I’d much rather see: (a) a business plan which has several different paths to success; or (b) a business plan where the outcomes of the each component has been tested or proven individually; or (c) a business plan which only requires one or two dominos to fall; or (d) if you still think your business needs multiple dominos, you can show how you can get there cost-effectively.

This stuff is simple, but so damn helpful as I start a few more businesses and fund many more in the coming years. Further, with more money to put to work and two partners to help me find businesses and evaluate plans at Biltmore Ventures , I need to remember the simple guidelines that other experts are offering me. Over time, avoiding mistakes is just as important as the winners.

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