The biggest ‘sink or swim’ factor for companies in any market is the ability to differentiate from the competition and thereby establish a competitive advantage. The “Business Model Canvas”(BMC) developed by Alan Smith is an excellent way for companies in their formative stages to map out exactly what makes them unique. A strong BMC can allow developing companies to identify potential weaknesses in uniqueness and fix such deficiencies before too much time and money are invested into a business that has no long term prospects. In the article “33 Startups That Died Revealed Why They Failed” by Jamie Kingsbery, there are several examples of companies whom could have kept themselves from failing if they’d only noticed and addressed their lack in differentiability from their competition.
Another “significant advantage of a solid business model is that it can give [a business] a competitive edge over other companies in [its] industry”. Once publicly available, well developed business models’ can give a company “a unique reputation in the marketplace”. This “unique reputation” creates more buzz around a companies product and attracts even more consumers to come take a look at what they might be missing out on.
As is shown by the long list of 33 failed businesses in “33 Startups That Died Revealed Why They Failed”, a business model can make the difference between financial success and financial ruin.