Re: Business Model Reality Check

Subject: Re: Business Model Reality Check
From: "Ed Wurster" <eawurster -at- hotmail -dot- com>
To: "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Fri, 7 May 2004 08:35:24 -0400

Kathryn "Kate" Kaminski wrote:
> Hi,
> I am in _desperate_ need of a reality check. The owner of our very
> small
> company currently makes money selling our services, mine and hers. My
> relationship to her is somewhat like that of sub-contractor to
> contractor.
> With the profits from selling our services, she's been funding the
> development of a product/service that would eventually be the basis
> for the
> company. In the meantime, though, our operating funds depend on
> keeping
> current clients. Given that you should plan on five years before you
> see a
> profit on a new venture, we need to continue to cultivate more
> clients.
> Attrition happens.
> Here's the new model:

lots snipped from here by Ed

> Geez! The groupthink on this one is so overwhelming that I'm starting
> to
> feel like I'm nuts for pointing out holes. Indeed, I've pretty much
> kept my
> counsel on this one, which isn't what I normally do, but it seems
> best in
> this situation. Also, from what I see happening now, the company isn't
> spending enough time on its current business model. If we lose another
> client without making sure we have more in the pipeline, I don't see
> how
> she's going to make it. It takes 5 years to turn a profit on a new
> venture,
> and we've also put two years into development. Were I a business
> owner, I'd
> want to recoup most of that investment.
> Thanks so much for your thoughts.
> Kate

I am interested in this topic, but need you to summarize.

Are you being paid an hourly rate now? If so, then continue working on the

Ed Wurster


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Business Model Reality Check: From: Kathryn \"Kate\" Kaminski

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