How to create a business model for your Swiss startup
Just because you built some innovative tech or have identified a gap in the market, doesn’t mean you have a business in your hands. What’s missing is a business model: figuring out exactly who your customer is, and exactly how much to charge them. Check out the information below for a quick view of some of the most innovative business models discussed on the Swisspreneur Podcast, and a break-down of how to create your own.
Episodes on Business Models
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How to build a profitable business model in Switzerland
- First things first: what is the value that you bring to your customer? Understanding this, as well as the closely related question of your USP (Unique Selling Proposition), is a crucial precursor to creating a successful business model.
- You have many business model options to choose from: advertising-based freemium, reseller franchise, marketplace, affiliates, subscriptions, etc. Subscriptions are often thought to be the best because they give you revenue predictability and tend to lead to higher company valuations, but you shouldn’t force a subscription model on your product/service if it doesn’t make sense.
- Charge for the value you generate for your customer, even if that value is much higher than what it costs to make your product/deliver your service.
- Aim for sustainability by tracking your spending and ensuring you make more money than you spend.
- SaaS subscriptions are useful in this sense, because their lack of variable costs means you often have an 80-90% margin, which gives you more room for error without actually losing money.
- Something like a food delivery startup, by contrast, usually has extremely variable costs and very tight margins, which means that if you make a mistake, you may plunge your balance sheet into the negative. - Consider offering your customers multiple product/service options to choose from, regardless of whether or not you follow a subscription model.
- Update your pricing regularly: increase prices, change your bundling, introduce higher tier plans, etc. This is useful for keeping up with new product/service features and with inflation.
Examples of diverse business models from Swiss startups
Gaël and Christoph from Gratiswasser were motivated by the belief that water as a commodity should be free, but were also determined to make this possible in a market economy, so they decided to use water bottle labels as advertising slots! Gratiswasser places ads in free water bottles to be distributed in stores, at festivals, cafés and in general around town. One of their partners, VIU eyewear, receives the water bottles at their stores and distributes them to customers who drop by.Placing ads in free water bottles has the benefit of associating an advertisement to the positive feeling of getting free stuff. It also is a more trustworthy form of advertising than online advertising, which nowadays seems to have become riddled with deepfakes and other shady ecommerce practices.
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At FOUND, Georg Hirschi turns the tables by having employers pitch opportunities to top talent, through AI-based matching and gamified assessments. How does this work? FOUND only works with fast growing companies committed to providing a great employee experience, and they only accept top talent onto their platform.FOUND’s services are free for talent, and free for employers as well right up until an employment contract is exchanged — then they pay a fixed fee. This way, it’s a 0 risk proposition for both the employer and the employee.
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Roman Odermatt’s startup, PayGreen, created a payment method which calculates transaction fees for online shops based on the shop’s carbon footprint, which they assess themselves. Fees start at 2.5% (compared to 2.75% AMEX and 3% Paypal) and get higher or lower depending on the company’s progress. Customers incur no additional costs, and PayGreen serves as a sort of green checkmark for those looking to buy sustainably.This means the more popular PayGreen becomes, the more the reputation of the shops who don’t have the label will suffer, thereby creating an incentive for shops to commit to reducing their carbon footprint. PayGreen also has no incentive to help companies greenwash, since the less green these companies (actually) are, the more PayGreen earns.
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