Good People, if you want to understand why companies win or fail, do not begin with the CEO, the workers, or even the technology. Begin with the business model. The business model is supreme because it is the logic of the firm, the invisible engine that determines how value is created, delivered, and captured. Leadership and execution matter, yes, but they operate within the boundaries set by the business model. If that logic is flawed, excellence only helps you fail more efficiently.
Two companies can sell the same product to the same market and end up with wildly different outcomes, simply because they chose different business models. A freemium product versus a subscription version of the same offering will reorganize capital, labor, incentives, pricing power, and customer behavior in fundamentally different ways. The product may be identical, but the destiny of the firm will not be. This is why, in many struggling companies, the real problem is not the product or service, it is the model through which that product is taken to market.
This is also why boards do not just hire CEOs to “manage operations.” They hire CEOs to discover, refine, and operate the right business model for the moment. When Mr. A was relieved after eight straight quarters of declining revenue and Mrs. B stepped in, what changed was not the product and not even the team in any material way. What likely changed was the logic of the firm. Mrs. B re-anchored the company to a business model better aligned with market realities, customer behavior, and competitive forces, and suddenly growth returned.
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So, invest time in your business model. Obsess over it. That web product you are building, should it be freemium, subscription-based, ad-supported, or transactional? Each option rewires how your company makes money and how it competes. When you debate these choices, you are not doing accounting; you are designing the economic soul of your company. Get the model right, and execution will amplify success. Get it wrong, and no amount of brilliance will save you.
I am Ndubuisi Ekekwe and from Feb 9, I will be teaching Business Model in Tekedia Mini-MBA. You are invited to register for this academic festival titled “Knowledge: factor of production”. Go here and get big bonus on early bird registration
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