Background Note | HBS Case Collection | December 2011 (Revised June 2014)

Business Model Analysis for Entrepreneurs

by Thomas Eisenmann

Abstract

This note defines a business model and its major elements: a customer value proposition, a technology and operations management plan, a go-to-market plan, and a profit formula. For each element, the note lists questions that an entrepreneur must address when evaluating an early-stage opportunity. The note explores in greater depth several business model issues that are especially relevant to entrepreneurial ventures, including the impact of network effects and customer switching costs; conditions when a startup should consider vertical integration; the nature of first and late mover advantage; and conditions that favor viral marketing. The note concludes with practical guidelines for early-stage entrepreneurs on how to conduct business model analysis.

Keywords: Business Model;

Citation:

Eisenmann, Thomas. "Business Model Analysis for Entrepreneurs." Harvard Business School Background Note 812-096, December 2011. (Revised June 2014.)