In a previous article we explained how understanding the business model – not the idea of the business model that entrepreneurs are “selling” to you – is critical for investing wisely.
A business model has to carefully address three interrelated questions, here is UTEMIS:
First, what are the problems being addressed, are they real? can you easily experience them? (we seriously advise you here to call a friend or someone and just ask)
- Problem 1: Finding companies to do business with, Latin America is very inefficient, finding customers and suppliers overseas is really challenging and time consuming.
- Problem 2: Trusting people. Once you have found someone, how do you trust that it is a legitimate and honorable company?
- Problem 3: Bank transfers. The average commission for a bank transfer in Latin America is 25% (yes… 25%!) there are several political reasons that explains this.
Second, well-crafted products created and designed to solve these specific problems:
- Product 1: UTEMIS is building a large comprehensive database of all companies in Latin America.
- Product 2: UTEMIS Reputational Blockchain, where every transaction conducted is recorded so businesses reputation becomes the driver for bringing in more business.
- Product 3: An escrow account, so 100% of the times, the money from the buyer is protected until the seller has delivered and the buyer has okayed the order.
Third, each product needs to have a revenue model that is already demonstrably proved:
- Revenue model 1: Advertising, to have a larger shop or to appear in the priority list.
- Revenue model 2: A fixed 1% commission fee is applied on all transactions after a certain number of transactions that are free per month.
- Revenue model 3: Profitability obtained from managing the escrow account.
Simple elegant solutions based on proven evidence (problems), with tested products and revenue models make the investments that work. Our piece of advice, if you or the entrepreneur find yourselves having to say “if” too many times, it’s probably a reason not to invest.