Helping Silicon Valley entrepreneurs choose an effective business model

Like people, businesses come in all types and sizes and no two businesses are exactly the same. While this variety provides many different opportunities for business owners, the options when starting a business can be overwhelming. There are many different choices when determining the nature of your business model and, unfortunately, if you do not choose carefully, you can jeopardize your success. Even a brilliant business idea can fail if you start your business in the wrong manner. One highly important decision is the basic business model that your startup will follow.

The experienced startup attorneys at Startup Company Counsel understands why so many startups in Silicon Valley succeed. For decades, Silicon Valley has been the go to place if you want to get your startup off the ground. Our startup attorneys have decades of experience and have been around to see the business model that works. Selecting the appropriate business model to maximize your success is extremely important. We can provide valuable advice regarding business models and many other legal issues that you may face in the process of starting your own company.

The Silicon Valley online business model and potential future hurdles

Many startups in Silicon Valley in recent years have focused on a specific type of business model that has proven lucrative, but also caused business owners to face significant legal and financial hurdles as their business progresses. Many entrepreneurs aim to be a platform to connect individuals with something they need via the Internet. The “something” can be a ride (Uber), a place to stay (Airbnb), messaging service (WhatsApp), or anything else. Next, the business owners seek to automate the entire process through an app and to minimize the number of staff and employees they need. They attempt to relinquish liability by serving only as connectors and relying on others—often independent contractors—to take the risk of actually providing the service.

While this business model may be lucrative, such companies are running into significant legal issues. Lawsuits regarding damage to homes or cars, injuries from accidents and assaults, financial fraud due to malware and phishing campaigns, and even legal challenges to the very premise of the business have cost many tech companies significant sums of money. This does not mean that the business model cannot work—it is simply another example of why it is extremely important to have an experienced lawyer reviewing all of the legal implications of your business models before you launch into operations.

Choose a model that works for you

Due to technological advancements and the ubiquity of the Internet, entrepreneurs have more business models from which to choose than in the past. Business owners in Silicon Valley are especially aware of the effects of technology on both a business idea and the implementation of that idea. However, not every business can be operated solely online and you should still give careful thought to your business model options. The following are some important questions to consider

  • Are you going to quit your current job and devote all of your time to your startup or will it be a part-time commitment in the beginning?
  • Are you selling a product or a service?
  • If a product, will you manufacture it yourself or outsource the manufacturing? Do you need space to store inventory or to display the product?
  • If a service, do you need equipment to provide the service? Can you provide the service online or does it have to be in-person? Do you need transportation?
  • Will you need employees? Can those employees work remotely?
  • Do you want to attract customers through an online marketing campaign? Do you want to attract foot traffic to a brick-and-mortar location?
  • How much capital do you have for startup costs?
  • Do you want to join an already established venture and start a franchise?

There are benefits and drawbacks to almost every type of business model, including a home-based business, brick-and-mortar, franchise, e-Commerce, and others. All of the upsides and downsides should be carefully weighed in light of your startup idea.

The Silicon Valley online business model and potential future hurdles

Many startups in Silicon Valley in recent years have focused on a specific type of business model that has proven lucrative, but also caused business owners to face significant legal and financial hurdles as their business progresses. Many entrepreneurs aim to be a platform to connect individuals with something they need via the Internet. The “something” can be a ride (Uber), a place to stay (Airbnb), messaging service (WhatsApp), or anything else. Next, the business owners seek to automate the entire process through an app and to minimize the number of staff and employees they need. They attempt to relinquish liability by serving only as connectors and relying on others—often independent contractors—to take the risk of actually providing the service.

While this business model may be lucrative, such companies are running into significant legal issues. Lawsuits regarding damage to homes or cars, injuries from accidents and assaults, financial fraud due to malware and phishing campaigns, and even legal challenges to the very premise of the business have cost many tech companies significant sums of money. This does not mean that the business model cannot work—it is simply another example of why it is extremely important to have an experienced lawyer reviewing all of the legal implications of your business models before you launch into operations.

Consult with an experienced startup attorney in Silicon Valley today

If you have a business idea, chances are you want to get your startup running as soon as possible. However, rushing into operations without choosing the most effective business model for your particular venture can put your success at risk. Instead, you should carefully explore the legal, financial, and personal benefits and drawbacks of different types of business models and carefully select the right one. This can be a daunting task as many entrepreneurs are not necessarily experts on many different types of businesses and some have never started their own business before.

At Startup Company Counsel, our goal is to help new business owners in Silicon Valley succeed in their startup ventures. Whether you plan to work from home, have a brick-and-mortar business, sell a service or a product, or simply have an idea, we can help you examine all of the legal and financial implications of your decisions and advise you on your options for a business model and much more. We develop relationships with our startup clients to strive for their continued success throughout the life of their business and assist with many different aspects of business law including formation, contracts, and more. Please call us today at 855-353-5377 to learn more about how we can help you.