Table of Contents
What Is the Transitional Business Model?
it is a kind of phase the companies implement to enter a new market or niche, to test traction, and to check if the idea is suitable – and profitable. So the business can secure capital while checking the venture, for market validation. According to the test, the company can consolidate, iterate, or abandon the idea, avoiding great losses. The model is short-term, looking for maturation.
Characteristics of Transitional Business Model
Designed According to the Customer
The business is easier to be employed and adapted by new entrants. For traditional players, on the other hand, might be a challenge, as they need to change their perspective and some established status quo.
Contest and Violate Regulations
To achieve the level of change and innovation the new business model demands, it will violate some current constraints, facing local regulators all over the world.
Reinforce Brand Before the Market
The brand is so strong that it can create a demand for a product/service before the audience asks.
Easily To Adapt
The most important feature is it exists to adapt to customer demands. It is a strategy to predict what the market wishes before it actually knows the wish. No one can guess the future, but some general ideas can be anticipated, by observing behavior change and technology innovations.
How To Implement?
Start With a Smaller Customer Segment
Most cases have started targeting smaller segments and eventually grew its target audience to bigger markets. It will make things less complicated at the beginning. It’s easier to understand customers and adjust products/services, and it allows you to prepare the base to scale later on.
Mix and Balance Old & New Teams
When you go into the transition, your company needs to merge the team you already have, with all their know-how and experience, with some new members, who will bring the knowledge over the innovative processes and technology. The stronger your team is, the bigger the chances of success.
Allow Re-Invention
Sometimes you may find out that new positions and new functions might be created inside the company. People who have been with you for a long time may be able to develop the abilities and skills you need for transition. They’re more likely to get motivated and feel embraced by the company, adding value to the venture.
Communicate the Team
Change is scary, people get more comfortable when they know their feelings are shared and that they are aware of fears and risks. Think about the following questions by responding to your team: “Why is the transition important?” “Why doesn’t the old model work anymore?” “what has changed in the market that requires this kind of transformation?” And you have to repeat WHYS/HOWS/WHATS, as many times as needed, to ensure a sound and successful transition.
Never Forget the Customer
As your business will always depend on your customer’s approval, you must bring them together with you, communicating, explaining, making them understand and feel welcome, and being part of the whole transition process. This can improve your reputation among your audience.
Take Your Time
The transition may be a huge process and that requires time and planning. Plan carefully all the steps the transition will have to take, try to predict the threats, calculate the investments, evaluate suppliers, etc. Try to “put on paper” everything you and your team can anticipate before starting. A gradual change, on the other hand, can give the business the time it needs to learn new processes, face challenges, and correct mistakes.