Breaking Rules: Either Business Model or Product, But Not Both

I have a theory that you can only have one earth-shattering change at a time when it comes to building a business. What is the thing you a going to do that breaks the status quo?

Most technology businesses break on product. was a great example of this. No one had made CRM software available in the cloud before them. Nike was a break through in product, too.

But some companies are a break through in business model. Google, I would argue, was one of these as no one had proved that people would pay for that kind of ad placement before on the web, in an open market competition. There were hints it would work but no one had truly been successful with it before. Dell is another example, at least when the company started. At that time all computers were sold in retail stores. Dell went mail order, reducing costs and becoming a new, low cost provider in the industry.

The theory, though, is that you can only break one rule at a time when you start a company. You can either be a revolutionary product with a proven business model or you can be a revolutionary business model with a proven product. You can’t be both.

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