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The death of the business plan

Posted by Al Doan under Gaining Experience, Reactions to Mentors, techstars

15

May
Hard Knock MBA (Personal MBA)

I know it’s been killed before, but being a recent product of my undergraduate program, I still had a fondness for the pain and drama that business plans brought to my life. The scenario would play out like this –

Kid with great idea: “Hello mentor sir/madam, how are you, I have a great idea… what do you think?”
Mentor who hears a ton of ideas and needs a filter: “Whelp, put together a business plan and we’ll talk, mmm kay?”
Kid with great idea: “Well okay…”

Page 17 of the business plan the enthusiasm is overwhelmed by the utter confusion and disappointment of trying to pull together a business plan that has to be shnazzy yet professional, functional yet fun. A business plan done ‘the right way’ is the holy grail, there’s no way it can be done. Someone always tells you it’s done wrong. This task turns into a huge obstacle for new ideas and I’ve often seen the ideas scrapped completely following the feelings of frustration the process gives. It’s just not healthy.

Enter the business plan killer … Four One Page Briefs!

Ohnoes! you’re all crying. But calm down and let’s talk about this.
Leading out in TechStars, Cohen (inspired by the book “The Four Steps to the Epiphany”) asked each company “who is on the Product Development Team and who is on the Customer Development Team?” (keep in mind he’s talking to companies with 2-3 people). He said that between 2 partners you should have one representing the product, one the customer. He then followed this by giving an assignment to each company with their respective ‘teams’ – Four one pager briefs due in a week –

1. Product Development Brief
2. Customer Brief
3. Pricing / Distribution Brief
4. Market / Competitive Brief

The idea is that they build one page working documents in each of those areas, just from what they understand about their company/industry and the research they’ve done. They will then take these working documents into meeting with mentors where they can run down each page in bullet fashion, getting feedback and critique. They are made to be marked up, red lined all to heck, then redone following each conversation. After 5-6 mentors they should have it tightened up and the result is four very concise documents that speak exactly to the issues and advantages in their company.
Let me breakdown each of the briefs quickly just to give you some direction on where to go with them, then I’ll leave you to your own devices.

  1. Product Development Brief
    1. This is your hypothesis created by the Product Dev Team
    2. Think along the lines of features, benefits, dependencies (does another companies product have to be in play for your product to succeed), product milestones, etc.
  2. Customer Brief
    1. This is your hypothesis created by the Customer Team
    2. Think along the lines of type of customers (decision makers, economic buyers, users, saboteurs, etc), problems they have, a day in the life of your customer (summary of findings for each customer type), influencers, ROI, etc.
  3. Pricing / Distribution Brief
    1. This is your hypothesis created by the Product Dev Team
    2. Think about product cost / pricing, distribution channels, demand generation, etc.
  4. Market / Competitive Brief
    1. This is your hypothesis created by the Customer Dev Team
    2. Think market type (entering existing market, resegmenting a market, creating a new market (not likely))
      1. If existing – who’s the market leader, what is the market share you go for, how do you differentiate, are you bucking standards or embracing them, where do you fall in the cost benefit of competitors?
      2. If resegmenting – what’s your segment and how’s it different, what needs are unmet in existing market that will cause them to abandon what they have, who aren’t people already doing this, how do you educate your market?

If new – what markets will your customers come from, what’s the need that will compel them to jump, how do you educate the new market, how do you create demand, why not resegment an existing market?

The conversation now changes from an obstacle that is thrown at the entrepreneur that discourages and frustrates to a few simple drafts that give a starting point and elicit understanding from the entrepreneur. In the end, a collaborative document that represents the whole team is a refreshing change from the mediocrity that is a majority of business plans.

It’s in the mentor’s best interest as well, you don’t care about their business plan, and you just want to see that they’ve done it, but when it’s done what do you do with it? This is called progress people, embrace it.

So please never write a business plan again. Show me your four one pagers and let’s get down to business.

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Hard Knock MBA (Personal MBA)
Hard Knock MBA (Personal MBA)

What I learned at TechStars Day 1

Posted by Al Doan under Gaining Experience, techstars

12

May
Hard Knock MBA (Personal MBA)

So while I’m here, I am going to try and keep a daily log of what I’m able to glean from my experience here at TechStars (hereafter referred to as TS) in a series of posts I’ll call What I Learned at TechStars Day X (hereafter referred to as WILTS), despite what my intentional grammar play may indicate, I am getting wiser all the time … I promise 🙂

In day 1 David Cohen gave a presentation that lasted for hours… and hours on top of hours… then we had dinner, and he gave another presentation… (I wonder how he feels about the no more than 10 slides rule?) But a couple of gems came out of the discussions, pitch practices, and visiting Tom Keller.  I will now list them in chronological order.

Communicate better.

We talked about sending out a weekly “Friends of the company” email to investors, interested parties, etc.  If you don’t you’re missing out on your earliest audience communication opportunity.  Sending out an email weekly forces you to account for your weeks time (what progress have we made) and offers you the chance to ask some direct help / questions (recommended to be done in red, in clear sentences where one can quickly assess if they can help).  There’s 13 weeks in our summer, we can handle 13 emails.

If you’re not an emailer, there are other options, but the point is that you get in a rhythm of talking about what you’re doing.  Blog or tweet daily, email weekly, conference call, whatever, just something to account for your time.

So if you’re starting a business, or going after a Hard Knock MBA, get used to accounting for your time and work.

Be Concise and Clear

While practicing the 20 second pitches, some teams got up and had a very vague beginning.  5 Why’s (David held up 5 fingers and asked why after each explanation till he was out of fingers) later, we had a very clear, concise pitch that communicated the opportunity, solution, and key differentiator in about a sentence and a half.  The way you can test if you need to use the 5 why-er is by paying attention to people’s first questions.  This is another one of the gems for me, I’m used to listening to people, paying attention, etc, but keep track of people’s first response.  If it’s “Why?” you need to answer that in your pitch the next time and you keep working on it.  If it’s “How are you different from…” or “Have you thought of…” those are good questions, it shows they get it and they are connecting dots in their mind.  So listen and keep track of the first responses, it’s your best indicator of how clear your message is.

Be Bold

Tom Keller gave this thought – “If you ever make a decision based on your data, and it turns out to be the wrong move, did you make the wrong decision?  No.  You won’t ever have the full data, make good decisions based on your current data and move on.”  Often we’ll beat ourselves up over a missed deal, or something not going our way, or making a decision that ultimately turns out to be wrong, big deal.  I will always take someone who can analyze the data and make a decision over a ‘flip flopper’ type who can’t / won’t make up their mind because of all the outstanding variables.  Make the decision and move on.

Then as we were going around giving pitches again, one founder was not the ordained speaker for his company, but the turn came to him and he wasn’t sure what to do, he looked around a bit, explained that it was his partners role to talk, yada yada yada, then Tom gave this commentary “Listen, you don’t have the spotlight on you very often in life, so when you do – don’t make excuses, don’t look at your partner, don’t shy away from it.  You face it and go after it full on.” I liked this thought mainly because I agree with the fact that you don’t get that many moments in life to shine.  No one like to strike out standing, if you’re going to get the opportunity to step in the batter box, you swing at that ball man, even if you don’t have what it takes to hit, you go down swinging (also true in love 🙂 Look that VC/Customer/Antagonist/Whoever right in the eye and go for it, whatever it is.

Not a bad 1st day.

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Hard Knock MBA (Personal MBA)
Hard Knock MBA (Personal MBA)
   
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