Here we have a classic example of a battle between business models.

On the one hand, we have the traditional higher education business model in Harvard, a not-for-profit university.

On the other hand, we have the non-traditional model in the for-profit institution, University of Phoenix.

How can you argue with the traditional model? Harvard has been a successful enterprise for nearly four centuries, since 1636, and continues year after year to retain its reputation as one of the best of the best education providers in the world.

University of Phoenix became a phenomenon in its own right after it was founded in 1976. Notwithstanding the current climate surrounding for-profit colleges, UoP pioneered many of the educational innovations that have since been adopted by more traditional models, including online courses and flexible scheduling to encourage a more diverse student body. With annual enrollments in the hundreds of thousands, and testimonials praising its rigorous curriculum, it would be hard to argue with this business model either.

(The recent brouhaha surrounding for-profit colleges, by the way, has nothing to do with the business model itself, but with the mistake of prioritizing Client Acquisition, which is to say, sales and revenue, above Client Fulfillment, that is, delivering educational results to students. And this reversal of priorities is always a recipe for disaster.)

So is the tried-and-true not-for-profit model the better one, or is it the contemporary, for-profit model?

Well, actually, it's neither. Both models are equally viable. It all depends on what result you're trying to produce, and for whom.

Customers come for results. Any business model that is tailored for the specific results your enterprise has been created to deliver, therefore, is the best model.

Harvard's business model is priced, delivered, and developed for those who want the very best, exclusive, elite education and can, by and large, afford to pay for it--its target customers are primarily high school students, and the parents who want this type of education for their children.

University of Phoenix's business model is priced, delivered, and developed for the customer who is determined to get an affordable degree in a convenient manner tailored for working adults--parents don't enter into the equation here.

Both business models work for the exact customer they are designed for.

That's the point.

Your business model starts with the Big Result your enterprise is on this earth to produce and the target customer who will be its beneficiary, and then describes how you are going to make money producing that result--in other words, what type of business is best suited to the result. For example:

Product or service?

For profit or not for profit?

Internet based or bricks and mortar?

Employees or independent contractors?

Company owned or franchised?

High tech or high touch?

The business model you choose is key to the ultimate success and longevity of your enterprise. So remember:

  • Your Business Model is only as good as your Business Idea.
  • Your Business Idea is only as good as your determination to do it better than anyone else has ever done it before, or will conceivably do it in the future.
  • It is the Result you provide--and the way you provide it--that will determine how brilliant your Business Model is or isn't.

What's the result you're committed to produce?

Why is that important?

Which says, who is your most important customer, and why should they listen to you?

Harvard? University of Phoenix?

Your call.

Published on: Oct 18, 2016