Published by Startupcoach on 05 Dec 2011 at 11:31 am
Some food for thought
AS the GM of a big Entrepreneurship Center and as a University lecturer on the topics, the last few years have been very interesting as far “how to start a business” has evolved. For a long period of time I kept saying that the “process” of doing a business plan was more important than the result of the “work” on paper.
Much too often, as someone who evaluates business plans for contests, I have seen “good” business plans for which I was sure it wouldn’t make it. Even tough I missed a few my batting average is pretty high. Too many “champions” of the writing process become huge fails in the execution process . Sadly, I’ve seen young entrepreneur spend too much time on the writing g of the “perfect” plan, too much time going from contest to contest to win some kind of “cash” prize or grant instead of focusing on getting real clients. Getting real client is like getting oxygen, grants is like a life-support system, it works but it’s limiting…
A tipping point
The more emphasis I put on turning “the rules of the game” into “The rules of success” , on being ruthless on the expenses of year 1 and by kicking butt so the entrepreneurs go out there and talk to people instead of being behind their computer looking for answers (or so they thought), I noticed a shift.
There are no best planning tool out there but it came to a point where I was wondering if doing a traditional business plan wasn’t counter-productive for a small business.
In the last few years voices started to be heard about the ability of the business plan to really “deliver” on startups. Guy Kawasaki, William Bygrave of Babson College, and John Mullins from the London business School of Economics among many more
There are many point to discuss and business plans lack in short term actions as far as I am concerned. And let’s not forget that doing a formal business plan is very time consuming and time is a very precious resource when you are starting. That is one aspect that I like about the “Lean Startup” approach (more on that in later posts); Small steps of action, put the feedback in the “machine” as soon as possible and Iterate…measuring as you go along…
Getting as fast as possible the Criterias by which your clients choose to buy your product and services is paramount. Don’t ASSUME, ask…
What is the Unique Client Experience felt by your client when using your product or buying your service ? Notice I didn’t say the UCE that they WILL feel…it’s the UCE they got WHILE using your product or services.
Kawasaki said at one point that “a business plan should be the elaboration of a good pitch”
I think elements of a good pitch are what you gather from the field, the “war stories” of your startup. I came to the point where understanding the need behind the decision to buy was the point where most mistakes were made. Like a false premiss on which everything is built. The house is good but the foundations are rotten, so after a while everything falls…So everything starts there…Too many entrepreneurs (and business owners will say, “let me tell you about our solution and you’ll get what the need is” …WRONG!
Convince me there is a need then I will listen to your solution, the other way around is a waste of time. Describe the need in details, make me “want” to hear your solution…Make me go “WOW” at the hole you are filling in the market then I’ll “want” to know what to solution is…and then we can go on with other parts of the plan; competitive advantage (unfair is even better but it better be real, stating an unfair advantage that I see a mere differentiation will piss me off), your tolerance to risk, your business model and how you’re going to make this turkey fly…..