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Rethink Your Business Model—Before the Market Does (Updated)

Originally published July 2025  |  Updated February 2026
Peloton burned through $8 billion in market value when its pandemic-era business model collapsed. Bed Bath & Beyond filed for bankruptcy after years of clinging to a retail format customers had abandoned. And right now, AI-powered competitors are replicating in weeks what took mid-market companies years to build.

The forces reshaping business models today—AI, tariff volatility, margin compression, shifting customer expectations—hit growth-stage companies in the $2–15M range hardest, because there’s less margin for error.

If your business is feeling the squeeze—flat growth, tighter margins, customers going quiet—the issue might not be your people or product. It could be your business model. The good news? You can do something about it.

What Is a Business Model—Really?

It’s the logic of how your company creates, delivers, and captures value—in simple terms, how you make money. Alexander Osterwalder’s Business Model Generation offers the most practical framework for mapping this logic.

His Business Model Canvas has been tested globally and adopted by organizations from IBM to Deloitte to countless mid-market companies. It gives you a shared language to describe, challenge, and redesign your model across nine building blocks: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Activities, Key Resources, Key Partnerships, and Cost Structure.

Each block connects to the others. Rethinking just one may ripple across the rest. This is Leonardo da Vinci’s principle in action—everything connects to everything else. The key questions to ask across all nine blocks: Are we serving the right customers? Is our value proposition still differentiated? Are our revenue streams resilient? Could a competitor deliver our offer faster, cheaper, or better using AI and automation?

Why Rethink Now? The 2026 Pressure Points

Every era has its disruptions, but the forces converging now are hitting from multiple directions simultaneously:

• AI is compressing competitive advantages. What took a team of ten and six months can now be prototyped by a competitor in weeks. If your value proposition depends on processes AI can replicate, your differentiation is eroding fast.

• Tariff volatility is reshaping cost structures. Supply chain assumptions that held for a decade are being rewritten. Companies dependent on specific sourcing models are watching margins disappear overnight.

• Customer expectations have permanently shifted. Buyers expect faster delivery, more customization, and greater transparency. Yesterday’s “good enough” is today’s reason to switch providers.

• Capital is more selective. Investors and lenders are scrutinizing unit economics and business model sustainability more rigorously than at any point in the past decade.

• Talent models are evolving. The hybrid workforce, fractional executives, and AI-augmented roles are changing what “Key Resources” looks like. Companies still staffing for 2019 are overspending and underperforming.

Rethinking in Action: Four Levels of Evolution

Rethinking doesn’t mean tearing everything down. There’s a spectrum—from surgical adjustments to full reinvention. Here are real examples from my client work:

• Transformation: A land development firm reinvented itself as a hotel management group, repurposing assets for a completely new value proposition.

• Innovation: An office equipment supplier pivoted to subscription-based SaaS—moving from hardware margins to recurring revenue.

• Strategic Change: A medical device distributor restructured pricing across product lines, unlocking new revenue without adding complexity.

• Operational Tweak: A trucking firm reshaped its territory model to align with shifting demand—a small change that drove measurable growth.

What they shared: they stopped assuming yesterday’s model was still the right one. And none of them waited until the market forced their hand.

The 2026 Rethink Playbook

A practical process to guide your rethink. This isn’t a weekend exercise—it’s a structured commitment that pays compounding returns.

1. Map Your Current Model. Use the Business Model Canvas with your leadership team. Be brutally honest about how things actually work today—not how you wish they did. Document your assumptions explicitly. Where are you making bets about customers, pricing, or delivery that you haven’t tested recently?

2. Pressure Test Each Block. Examine every block through three lenses: Customer—what are they actually saying and doing? Competitor—who’s gaining ground and why? Technology—what could AI or automation do to this block in the next 12–18 months? This third lens is where most mid-market companies have the biggest blind spots.

3. Design New Options. Generate possibilities without committing. Could you repackage for a new segment? Add recurring revenue? Use AI to fundamentally change your cost structure? Partner with a platform that gives you reach you can’t build alone? The goal is volume of options before evaluation.

4. Prototype and Test. Don’t bet the farm. Pick one or two high-potential changes and run a 90-day pilot. Measure what matters. Learn and adapt. Treat your business model with the same discipline you’d apply to product development—build, test, learn, iterate.

5. Align Execution. Make sure people, systems, incentives, and metrics support the new direction. This is where most rethinking efforts stall—the model changes on paper but the organization keeps operating the old way. Alignment is the bridge between strategy and results.

Here’s My Take

Your strategy might be solid. Your product might be strong. But if your business model is outdated, none of it matters. The companies that will thrive are those building models designed for today’s reality—not last year’s.

What you gain from rethinking: new revenue possibilities, more loyal customers, leaner operations, competitive differentiation, and a model that fuels growth rather than stalling it.

Your challenge: Set aside time this quarter to rethink your model—before the market forces you to. The best time to evolve is before you have to. Don’t be the next business obituary.