Hi everyone! For those who are reading a blog of mine for the first time, my name is Freya Shah. I will be in Grade 10 come September at Woburn CI! This week, I had the opportunity to attend an extremely informative workshop with Raaj Chatterjee, and I am so excited to share my experience with everyone today!
Raaj is an extremely dedicated individual, who "always had his mind set on making a difference through technology." In his high school years, Raaj dedicated over 700 hours🤯 to clubs and "green-initiatives." Raaj is also the Founder and CEO of his company, MeaningfulWork. MeaningfulWork is an "online volunteer-matching platform connecting a community of skilled volunteers and nonprofits to build better impact."
Check out this link to learn more about the company!
"Make A Bigger Impact, On Purpose"
Throughout the webinar, I found there was an emphasis on trying out new things, as well as grabbing opportunities. Come to think about it, many of our speakers touched upon these two ideas, and I find that this may be because grabbing opportunities and trying new things are a primary way to build your career! An experience of Raaj's that I really found inspiring was how he grabbed an opportunity to help create a recycling robot for Apple! He explained how he didn't think he was qualified enough, and that others may have more experience than him, however, he still opened that new door! Do you ever feel as if other's know more than you, or that you don't know as much as you are credited for? Well, Raaj explained something called the Impostor Syndrome, which I find applicable to my life as well.
The impostor syndrome is something I can directly relate with, because I have found myself in many scenarios in which I start doubting myself, and thinking that I am not capable of a task. For example, I start hesitating when entering competitions in which I think others are “better” and more “up-to-the-task” than I am. However, after taking the chance and grabbing the opportunity, I come to realize that many others are thinking the same thing I am. Having room to grow is never a negative issue, yet I always realize that AFTER doubting myself in the beginning.
Before diving deep into the 7 steps of money modelling, Raaj went over some steps that allowed us to briefly understand how exactly the Money Model works. Essentially, he briefed the process we would be going over.
The first step was to start rough and refine with more information. This means that you do not need to have the entire model planned out in your head. On the contrary, you need to build off of a small idea, and conduct valuable research to solidify your plan.
Next, you need to develop and conduct a test/experiment to confirm that your plan is feasible and realistic. As per my thinking, I find that market trends are constantly changing and evolving. Due to this, you need to make sure that your model is compatible with the market and your consumers. To do this, you will need to predict, test, and validate your model before putting it into fully fledged action.
Lastly, one of the biggest steps is understanding that the art of storytelling is a key factor in selling your ideas. In order to promote, build, and advance your brand, you will need to be able to pitch yourself in an intriguing way that will build a sense of comfort and trust for your buyers and investors.
Now, to get into the 7 core steps of an effective money model.
Deconstruct a single transaction (Revenue, Direct Costs, Gross Margins) What’s your ability to make a profit in a single transaction and/or over a lifetime? The example that Raaj used throughout his Money Model workshop was a Premium Kombucha Company. For this step, Raaj had the costs broken down.
2. Repeatable Opportunity
This step means to make sure that the SINGLE TRANSACTION can be repeatable. Simply put, try making a plan in which consumers will return to your brand and increase profit more than once. An example of a repeatable opportunity would be giving out coupons or subscriptions to maintain customer loyalty and interaction.
3. Positive Earnings and Cash Flow.
This step focuses on the target market and potential customers. Raaj talked about three important subtopics within this topic, including TA<, SAM, and SOM.
TAM: Total Addressable Market
SAM: Serviceable Available Market
SOM: Serviceable Obtainable Market
TAM refers to the Total Addressable Market. When looking at TAM, you are analyzing demographic data in order to specify how many potential customers there are. As shown in the above diagram, TAM is the largest possible market for your brand.
SAM refers to the Serviceable Available Market. When looking at SAM, you are narrowing down the TAM through attributable filters such as age. For example, you may be targeting an audience between a specific age range, so you conduct some market analysis to figure out approximately how much of the TAM is serviceable. As shown in the above diagram, you are finding how much of the TAM fits your brand.
SOM refers to the Serviceable Obtainable Market. When looking at SOM, you are finding how many of the SAM you can actually reach. This means that you are trying to find the best possible location for your company in which a high amount of potential customers will find commutable.
4. Growth Multiplier and Scaling Mechanisms
This step focuses on how you can increase the growth of your business. Whether that be through tactics such as word of mouth, mobile advertisements, or company events, the strategy chosen must be strategic and well planned out. Although all steps of money modelling are extremely important, I find this step to one of the MOST important. This is because a business inevitably depends on consumers, and therefore strategizing ways to deliver the message of our company to our consumers is extremely important.
5. Capacity Considerations
When looking at capacity considerations, you are looking at specific questions regarding the company's financial constraints. For example, look at the Level of demand, Cost of production, or Availability of funds. This also includes researching and planning out labor costs and costs of your products. Capacity Planning also goes hand-in-hand with this topic. Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products. When looking at capacity planning, you are considering many financial factors in relation to your company.
6. Cash Funding Requirements
When looking at this step, you are focusing on the startup and loan plan for your company. Focusing on how you plan to pay back bank loans is one of the most important parts of this step. Setting up a cash-balance plan is a great way to secure this step. When making this plan, you are predicting and planning exactly how you will pay off any debt and start making profit through your company.
7. Terms, Target Return, and Time Frame
For this step, you are determining how exactly your product effects society. Typically, a company has both a vision and a mission, and this step focuses on how the brand will accomplish these two aspects. What are you trying to achieve? Look at the Why, What, and How of your company. Why refers to purpose, what refers to vision, and how refers to the overall mission.
So, that wraps up the money model aspect, however one of the last things that were talked about is IMPACT.
When focusing on IMPACT, you are determining how exactly your product effects society. Typically, a company has both a vision and a mission, and this step focuses on how the brand will accomplish these two aspects. What are you trying to achieve? Look at the Why, What, and How of your company. Why refers to purpose, what refers to vision, and how refers to the overall mission.
So, that's all from me today! Before I end things off, I'd like to thank Raaj Chatterjee for his wonderful workshop. I learned so much and had lots of fun! Thank you for taking the time to read this post, and if you want to reach out, feel free to connect with me on LinkedIn or shoot me a message on Instagram! I hope you have a great day😁!