Effetti Growth

tools

knowledge

services

about

Wednesday, March 31, 2010

Why you should NOT write a Business Plan...

... & 10 better things to do to ensure success !!...
by David Bookout

Perhaps, you too have seen the recent ads for a new business plan template ? The ads seemed to be on every website I looked at yesterday morning, which prompted this post. The are a number of problems with the whole BPlan concept as I will outline briefly below, but the biggest problem is that business plan writing, for the most part, is a complete waste of time. Really, come on, how many business plans have you ever comprehensively read ? More importantly, how many business plans have you regularly reviewed, let alone followed in your day to day activities within a business ? Be honest.

Business plans are simply a business 1.0 tradition, relics that need to be replaced. What is needed are "Thinking Platforms" like the one we invented here that provides for derivative tools that facilitate business unique effective action on a daily basis.

Here are five reasons why the current business plan thinking is flawed:

A) Lack of differentiation ~ Template plans don't differentiate business concepts. Instead they foster a lumping of your business into a ho-hum pot of business similarity.

B) Lack of thinking ~ Template plans don't generate thinking. Instead they foster "go to the freezer, get the box" list checking, cutting and pasting.

C) Time ~ Custom plans take too much time. While you're in writing your plan, someone else is out validating and selling.

D) Change ~ Change, the biggest flaw factor occurs faster and faster. Technology, demographics and competition are all changing faster than people actually take the time to document in a business plan.

E) A Plan Is NOT Planning ~ Planning is a recurrent process. A plan, in this context, is something typically done once.

F) No one cares ~ Most active entrepreneurs seeking funding will tell you that they invariably NEVER get asked for a BPlan. Instead they get asked for Elevator Pitches, Executive Summaries, and Pitch Decks.

And, as promised, here are 10 things that you would be better off doing:

1) Talk ~ Talking with your desired audience. Call them on the phone. Go see them. Speculate with them, and most importantly LISTEN CAREFULLY to what they have to say.

2) Segment ~ Define specific user groups by their specific concerns. Refrain from staying too general in your work. Specific, valuable solutions drive the highest revenues.

3) Rank ~ Make assessments regarding user concern importance. This is the beginning of your value proposition work. It is also the basis of your design work, and should be revisited and revised often during the initial process.

4) Design ~ Sketch out solutions that address specific user groups and their specific concerns. Beware of committing too much too soon. This is where the costs are that drive business extinction.

5) Validate ~ Again, go talk to your desired audience segments. Use your ranking work to determine where to focus. Again, LISTEN CAREFULLY to what they have to say. Don't defend. Speculate. The right conversations at this stage of business offer development can lead to your customers literally designing your solution for you. Nice, if you can get it.

6) Re-Rank ~ Revisit your ranking work and change accordingly.

7) Refine ~ Shift your design sketches to more comprehensive solution sets. This is where your product roadmap comes in. If you don't have a product roadmap, you don't have enough information. Don't forget that this is another level of detail in the design of your offer, and your chances of having everything all figured out is slim to none.

8) Re-Validate ~ Again, go talk to your desired audience segments. Follow the re-ranking work. Make sure you are getting recurrent feedback from the same people. Avoid weighting one off feedback too heavily. Still LISTEN CAREFULLY to what these people have to say. Again, don't defend and speculate. Test trial closes.

Gather your information, it's critical decision and commitment time.

9) Build ~ Produce the simplest, easy to use, most compelling solution at the lowest total "cost". This doesn't mean the lowest "price". Sometimes things that seem inexpensive are extraordinarily expensive over the long haul. Build in flexibility. Things will change. Avoid feature creep.

10) Go Sell ~ The ultimate validation is a paying customer that would gladly repeat the process tomorrow. Not that they necessarily would, this is about satisfaction and the dreaded buyer's remorse. Repeat, repeat, repeat...

When you've done this list, in this order, and still think you need a business plan, let me know.

© Copyright 2010 - Effetti, Inc. All rights reserved worldwide.

The "Wasting Time" image may be © Copyright to and was found @ PinkForSure.com

Wednesday, March 24, 2010

6 critical tips for launching a startup...

For those of you interested in launching a startup while keeping your day job this article is a good, fun read !!

Read more at Entrepreneur.VentureBeat

Note: Originally posted here

Tuesday, March 23, 2010

Does your business have a Social Media Strategy ?

... & why you should take a closer look !...
by David Bookout

A friend and colleague recently sent out a message that they had made a career change to an up and coming company in a hot sector. So, I visited the company's website and in quick review saw that the company didn't have a clear Social Media Strategy. So, I sent a short email to my friend to inquire and received a quick, unexpected reply - "We have a social media focus and strategy. Our Director of Marketing is out of that world." - that got me thinking about what I may have missed. A few more eMails in the exchange produced the name of the director and a suggestion to search one of the most popular Social Media sites for a recent campaign, the note went on to say "That is a rather innovative use of social media that he came up with.", which intrigued me even more.

Now that I had some specifics, I searched four of the top Social Media sites and found just the use of the director's name and a small range of connections. In each instance there just wasn't enough evidence to lead me to believe that the company had either an effective focus or an effective strategy. In contrast, the individual was on the map, but I kept thinking "what's wrong with this picture ?"...

Brand is the key and companies delving into this new space should be much more brand aware when it comes to what they're doing. Here are two top level things to consider:

First, what brand are you building ? Care should be taken to determine if it is the company brand, the product / service brand, or the personal brand of the individual running the campaign, and the inter relation of each.

From this perspective you will get some clarity on the Social Media Venues and Account Names that you will need, as well as a linking strategy for the different sites you will be using for the campaign.

Second, what is success ? Stakeholder(s) should discuss and design the specifics of the stage they are in ( building awareness, generating interest, facilitating trial sales, or driving recurrent transactions ) and most importantly define the key metrics that they will use to tweak the campaign to ultimate success.

© Copyright 2010 - Effetti, Inc. All rights reserved worldwide.

The "Social Media Landscape" image may be © Copyright to Fred Cavazza

Friday, March 19, 2010

SMMS, Social Media Management Systems...

You've gotta love the internet and the fact that people are always either inventing new tools, or new tools that enable users to better manage other tools.

Jeremiah Owyang has an interesting article this morning on Social Media Management Systems, a recent phenomena that I'm sure you'll be hearing, and seeing more about in the near future.

Read more at Web Strategy

Thursday, March 18, 2010

VCs are people too, honest...

While I don't recommend that entrepreneurs seek funding before they have completed idea validation and have successfully built a focused, profitable and scaleable revenue engine ~ David Homik's recent post about an email mistake, and why it’s always a good idea to remember your manners, is worth another click...

Read more at VentureBlog

Thursday, March 11, 2010

Bootstrapping, Investors...

... & Why Entrepreneurs Should Refine Terms !!!...
by David Bookout

Like moths to a flame, an entrepreneur's chances of real success in a singular venture are slim. Yet, for the most part, they seem perilously attracted to equity financing. Why? It certainly isn't because the model is wildly successful in a general sense. Amongst Angels, VCs and others close to deal making some say that the a new venture's chances for success ( liquidity to shareholders ) are just a mere 1 in 10,000, but that doesn't seem to stop a steady flow of entrepreneurs and new ventures...

Meanwhile, a lively discussion has been taking place over on Sramana Mitra's blog about venture capital ( read as capitalizing your venture ) and why bootstrapping, in particular, is especially critical today for success as an entrepreneur. I should also say that Sramana's views on business building are solid, pragmatic, and refreshingly reinforced in the free Strategy Roundtable discussions that she holds every Thursday morning, where the first 5 entrepreneurs to sign up get to pitch their idea via a Dimdim webinar. More on this later...

This article is an offer to refine the terms bootstrapping and investor and augment the current, broad, and somewhat useless interpretations that can and often do short circuit healthy business growth. Particularly in the start up phase. Sadly, the majority of entrepreneurs still seem intoxicated by the cruel hoax of "getting funded", while ignoring the fact that the days are long gone when cash could be raised on an idea alone.

So, let's take a renewed look at bootstrapping. And, let's take that look while connecting squarely with the essential grounding and proof of concept work that every business and business offer needs to do to become a success. Overnight successes are Hollywood themes, and business magazine fodder that have just plain given people the wrong idea. Many think that bootstrapping is either too painful, or should be considered a form of failure. Instead bootstrapping should be thought of as an essential component of concept testing any new business. The premise being that if people won't pay for a product / service today, there is little chance that an equity based cash injection is going to facilitate payments tomorrow. The sector you're planning to serve doesn't matter. Payment is the only true test of value.

On the investor side, if we also take a renewed look, and move away from the traditional, predominately financial definition of investor, then entrepreneurs are free to adopt a more powerful interpretation that embraces the most precious resource they could receive in launching a new venture. People's time, and commitment. If you have people helping you, they are indeed investing. Investing in you, your idea, and your collective futures. Again, if you, and your investors are unable, or unwilling to ask people to pay for the products and services you're offering, then a big slug of cash isn't going to help.

Additional, and significantly larger, long term benefits of looking at bootstrapping and investors in this renewed way are the cash planning skills, and retained equity positions found amongst the successful owners of Small, Medium Enterprise. Unlike the 9,999 moths that get burned by the flame, the lions share of U.S. GDP comes from the SME sector and entrepreneurs that successfully bootstrap their ventures into those ranks have cause for celebration, as well as the added enjoyment of the improved negotiating power they will have should they so choose.

© Copyright 2010 - Effetti, Inc. All rights reserved worldwide.

The "Moths to a flame" image title and image may be © Copyright to Photo.net and / or Ken Williams.


www.PhaseTwoMarketing.com 416-686-2466
© Copyright 2007-2009 Effetti, Inc. All rights reserved worldwide.
Hosting by Barefoot Digital
Sitemap