The Mullins’ Seven Domains model was created by John Mullins – a professor at London Business School – and outlined in his 2017 book The New Business Road Test: What Entrepreneurs Should Do Before Launching A Lean Start-up.
Understanding the Mullins’ Seven Domains model
The Mullins’ Seven Domains model is used by entrepreneurs to determine whether a new business idea is viable.
Mullins believes that opportunities are best understood in the context of three important elements: markets, industries, and one or more key people within the organization.
To that end, his model encourages entrepreneurs to answer the following questions (among others):
The Mullins’ Seven Domains model assesses an idea from seven perspectives (domains):
Four pertain to the micro and macro aspects of the environment and industry, and
Three pertain to the internal factors within a team or company.
Below we will take a brief look at each of the seven domains.
Environment and industry
Market attractiveness (market domain/macro level) – this domain deals with data on the number of customers, sales value, and the number of units sold. It also determines whether a market is on the rise or in decline.
Market benefits and attractiveness (market domain/micro level) – this domain involves a more detailed look at the market segment most likely to buy the product or service. How will they benefit? How would the product be different from the competition?
Industry attractiveness (industry domain/macro level) – how many competitors exist in the industry? By extension, how difficult will it be to enter? It is also important to determine whether the buyer or seller has the most power and if the theft of strategies or ideas is commonplace.
Sustainable advantage (industry domain/micro level) – related to this theft is the idea of sustainable advantage. That is, how easily will the competition be able to replicate the new idea? How could the likelihood of this scenario be minimized via patents, finance, or technology?
Team
Mission, aspirations, and propensity for risk – now it is time to turn inward and analyze the start-up team. Are leadership and subordinates committed to making the company’s dreams a reality? How much risk are they ultimately willing to expose themselves to? Is the business in line with the founder’s personal values?
Ability to execute on critical success factors (CSFs) – these denote high-level goals that play a critical role in organizational success. This means determining the decisions that will negatively impact the business when things are going well and conversely, the decisions that will benefit the business when things aren’t going so well. Does the team have the necessary skills to execute in either case?
Consider team connectedness up, down, and across the value chain – in the last domain, Mullins calls on the start-up to analyze its relationships with suppliers, distributors, customers, investors, and other key stakeholders. How might these relationships hurt the business in the future and how can they be mitigated?
How should the Mullins’ Seven Domains model be interpreted?
For those who are less acquainted with the model, it may appear that Mullins has simply summarised what most people know about starting a new company and evaluating ideas.
Upon closer inspection, however, the model makes a few important distinctions:
Industries and markets are not the same and should never be confused.
Industries and markets must be analyzed at both the macro and micro level.
The assessment of an entrepreneur or employee’s capabilities should not be confined to their resume or psychological test results, and
The seven domains are neither equally important nor additive. Furthermore, the model should not be construed as a checklist since strengths in a few domains can compensate for weaknesses in others.
Key takeaways:
The Mullins’ Seven Domains model is used by entrepreneurs to determine whether a new business idea is viable.
The Mullins’ Seven Domains model assesses an idea from seven perspectives (domains). Four pertain to micro and macro level factors across the industry and environment, while a further three relate to the team within the start-up.
The Mullins’ Seven Domains model is not a checklist that must be satisfied for organizational success. Nor is it a summary of what most people know about testing a new idea or starting a new company.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
