Mentors Magazine: Issue 3

MENTORS MAGAZINE | EDITION 3 | 51

You need to answer these two questions:

Which parts of the business model should

not change? What are the essential ingre-

dients that have made your startup suc-

cessful, and that should be maintained in

scaling? You need to decide which ele-

ments can’t be changed, because they are

core to your sustained operations and

make your offerings the most desirable.

Messing with them would undermine the

business model’s integrity, effectiveness

and competitiveness.

Which parts should change to fit the tar-

geted markets? New markets and different

conditions can require significant changes

to certain parts of your business model.

The elements that could shift to adapt to

the market include the sales model, pric-

ing, target market, staffing and ecosystem

of partners. There may even be changes to

the technology or the value delivered, if

the new markets are sufficiently different

from the original.

If no changes to your original approach

are needed, scaling into new markets is

basically a replication function – the busi-

ness model is recreated exactly the same

everywhere. That may be the right ap-

proach in some situations, as some busi-

ness models fit nicely into a wide range of

market conditions. But to get the right fit

with a new market, you often need to

modify and tailor the business model.

Some startups have used both approach-

es. One startup we worked with in India

developed a business-to-consumer (B2C)

model for its initial launch. It worked very

well. Later, desiring more growth, they ex-

panded into a new state in India by repli-

cating the original model. Though there

were some differences in the new market,

the original model was robust enough

that no change was required. But later,

when they wanted to enter the adjoining

business-to-business (B2B) market, they

realized major changes were needed —

selling to businesses was much different

than selling to consumers. So, they modi-

fied parts of the business model to fit the

new B2B market and scaled successfully.

More recently, they changed the model

more aggressively to expand into the very