Today, let’s talk about business models.

I have repeatedly emphasized that solving needs does not necessarily for earn money, but also requires a good business model.

Business model is a cognitive term.

The design of a business model can, in simple terms, affect how much money our products/services can earn, but the key behind it is that it will affect how long our business can “earn”.

Use Maotai as an example. Maotai‘s outstanding is because it has a top-notch business model.

Maotai’s high profits, high turnover, and high premium combine to form an “impossible triangle”. You use these three points to benchmark other businesses, and they all meet very few criteria.

But Maotai is even more impressive: sustainable management.

Why is Maotai’s valuation so stable? To a large extent, it is because it is a relatively sustainable business model.

‘Sustainability’ is certainly not absolute, but within our measurable cycle, Maotai’s life cycle is long enough.

These are crucial points. But it’s not that we were able to design such a great business model from the beginning of doing business. Many times, it also exists after continuous operation, forming a brand, reputation, and high premium.

Maotai did not reach this level of fire in a very early period, and it underwent an evolutionary process.

So, don’t be too hasty when choosing a business model. It’s already very good to be able to meet the above one or two points.

So how do you design your own business model? Please pay attention to four questions:

Is your product simple enough?

Many people make product designs very complex, some with complex functions, some with complex appearances, and some with complex usage processes. But complexity is not necessarily good. The more complex it is, the less you grasp the true needs of users. Therefore, doing a bunch of messy things to cover it up is a sign of lack of confidence. Direct demand solving is the master.

2. Is your product profitable enough?

This varies from person to person, and I personally do not consider low profit businesses. Because the first consideration for entrepreneurship is whether it addresses one’s own needs. For me, doing a business without sufficient profit not only fails to meet my own needs, but also lacks profit to invest in products to form a positive cycle, let alone meet the needs of the team and business.

3.Can your product generate long-term customer value?

What is long-term value? On the other hand, will customers continue to purchase once they gain value? In our own app’s Mi Ke circle, many user IDs have logos such as 3v, 5v, or even 8v, 9v, and offline courses. 1v means purchasing one course, which means that many users have consumed multiple products on our platform and have long-term value. This is very important.

4.Are you sufficiently professional in shaping value?

If you are professional enough, it will form a good barrier. Being able to block competitors from entering is also a crucial factor in forming a profit gap between you and your competitors.