How Much Should Designers Ask About The Business Model?
I posted this over on Quora too. It’ll be interesting to see what responses we’ll get.
We’re starting the see the usual cracks in a tech boom where startups are living high on someone else’s money. Evaluating potential opportunities carefully is important especially because of the volatility of our current economy — not all of us are lucky to have great paying jobs.
I’ve seen this dance before. Most of us User Experience types had to do something else after 2000 — I played a programmer on television for a while). Some of the kids I’ve seen running around at the meetups here in San Francisco, not so. I personally don’t want to see another geo-located photosharing app until they have solved the revenue piece.
Now, I go out of my way to make sure wherever I work is a sound idea, if it’s not the equivalent of shipping a 50 pound of dog food cross country for free.
Where I’m working at now, Jobvite, has a great business model — someday I’ll educate you on the advantages of SaaS, and why SalesForce.com has a license to print money. I’ve also turned down other opportunities that were boring, but very, very profitable.
This begs the question — when a designer joins a startup other than own (and maybe especially their own), what should that designer be asking?
Here are the questions I always have:
- Who’s funding it? (Some of the larger VC firms may not always be the best sign.)
- What’s the customer acquisition model? (Notice I didn’t say user acquisition model.)
- What’s the revenue model?
- How quickly can the startup gain and lose market share?
- How crowded is the space? (Having competitors is not a bad thing)
- What are potential pivots?
- How long does the startup give something away for free before it starts collecting money?
- How much runway does the startup have?
For that final statement, if it’s less than a year I would think long and hard about how much savings I have in the bank, because you’re probably going to be looking for a job after it.
How much do you look at the business model? How much should we? And, should it be evaluated during future job interviews?
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