A Fool’s Wisdom

Or “Companies fail because they run out of money.”

Don Dodge on Why Companies Fail in Hindsight 2.0, Lessons from a Failed Web 2.0 startup about the online calendar service Kiko being sold on ebay ($50,000):

Web 2.0 companies, or any company for that matter, do not fail because of high expectations. They fail because they run out of money. They run out of money because they don’t have a viable business model.

We are talking real businesses correct? Lets take the model out of business.

So what is your business? Do you have one or more professionals figuring this out? Tara Hunt, though I love her, does not count because a business probably can’t be described in a single prose blog post.

It is definitely rude to casually ask other people what their business is.

The term “business model” has bothered me [, Peter Rip,] for a long time. I have always found it to be a glib method of characterizing a company’s relationship with its various constituencies, e.g., customers, suppliers, competitors, etc. The problem isn’t really the concept. The problem is that it’s a complex, multidimensional structure that doesn’t really lend itself to a summary sentence, at least not if you really want to understand the business.

Peter Rip, EarlyStageVC, Business Model, Schmizness Model