We’re almost at the end of this year’s Zalando Techspert Series run, but before we have our last hurrah of the year, we’ve had some great input from Berlin companies about picking the right business model.
Our SVP Products, Philipp Erler, was joined by Daniela Cecílio, CEO of fashion search tool Asap54 and Martin Kütter, COO of the world’s first language learning app, Babbel. Together they answered questions from our panel moderator Hannah Löffler out of Gründerszene, which were focused on helping startups tread the right path to getting their business off the ground and into the minds of customers.
Sad to have missed the event? We sat down with our Techsperts who shared their experience in growing businesses and getting them on the track to success.
Zalando: How much research is needed when picking the right business model for your startup? What is your top tip when exploring the options?
Philipp Erler: It depends a lot on the business. For some it can be simple, while for others it turns out to be a lot more complicated. It’s a lot about thinking systemically about what you want to achieve in the long term, and having a clear strategy. Deriving your business model from that is key.
The difficult part here is making sure you’re not destroying any leads in the beginning. Always be open to the option of changing your business model.
Daniela Cecílio: In my case, I knew the problem that I wanted to solve. However, monetizing it was an issue I had to face later down the track. I used Google as a basis for my research model, as well as speaking to people who had worked at Google previously. I also looked at the competitors that were similar to Google and my own business model as part of my research.
Martin Kütter: As Philipp said, it depends on the business. In Babbel’s case, we prefer to dedicate a relatively small amount of time to research in order to produce the most lean idea possible and test it. This is then rolled out in a very limited scenario, with the results then closely studied. I would recommend keeping an open mind and testing all the options available to you.
Zalando: How important is it to study your competitors?
Martin Kütter: Babbel has a very limited group of competitors, so we have just two or three to watch with very different approaches to the market. We tend to make it work in our own way, but are still aware of the competition without having to experience too much friction.
Philipp Erler: My advice would be to be paranoid and ignorant at the same time. For the long term, you should understand what your competitors are doing and what effect or harm they could have on your business. It’s crucial to do what you do best, and do it right. You can monitor your competitors in the short term as well to replicate their success.
Daniela Cecílio: While we don’t have direct competitors as such, my approach is to put myself in the consumer’s shoes. By doing so, you can look at what’s on offer in the market and figure out what’s missing in a competitor’s offering. Businesses can often misstep and fail to recognize what can be leveraged – studying your competitors to see what they’re doing wrong can help to improve your own business for the better.
Zalando: What happens if you fail? How can your business recover?
Daniela Cecílio: You’re going to be failing all the time! What you need to do is be able to bounce back quickly and have a Plan B, C, D, E, F… Basically, picking the option that will work and keeping at it.
It’s also essential to make sure you’re synced with your team – if you’re feeling demotivated after failure, your team can pick you up and get you going again. Every entrepreneur will fail, or has failed, but failure is ultimately the best way for us all to learn.
Martin Kütter: We expect to fail in many of our endeavours, it comes with the process. You should be open to the prospect and put a name or cause to the failure, so that someone is accountable for learning from it.
Philipp Erler: Failure is the ultimate driver of success. If you fail, you should understand why you’ve failed, but don’t spend too much of your energy dissecting the issue – it’ll just drag you down.
Dust yourself off and learn quickly. Be productive in learning from failure – then fail again tomorrow.