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If you can’t write it down, you probably don’t know it 6 February, 2015

Posted by varoom in Business Plans.
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I’m a big fan of writing stuff down in business; your plans, strategies, agreements, forecasts all benefit from being captured in written form.

Often when you start to write down your thoughts it becomes rapidly clear that you don’t know everything, there remain unanswered questions, gaps in the story or what was simple in your head becomes hard to explain in written form.

The story of a business and where it is going and how it will get there is clear as day in the heads of most entrepreneurs, at least that’s what they think! When a company has several founders it gets worse because they all often have their own idea of what the direction of their enterprise is, but rarely is it the same. More seriously, at some future point, these variances of understanding or unwritten agreements may come back and bite you when you least expect it. A written agreement will force you and your founders to write down what you plan to do and more importantly have the battles about this up front and gain agreement.

When you start writing, don’t look for a template structure to start with, just start writing. The structure can come later. It’s important to start putting down stuff you know, you can explain or you all agree on. For things you don’t know leave gaps or questions that you can come back to later.

This can be a working, evolving document; you can come back to it over time when you have new information or feedback from external reviewers.

The act of writing stuff down is difficult, forces you to face unknowns and make your mind up about key decisions. Another side benefit is that it enables you to explain to others what you are doing, consistently and not depend on your off the cuff explanations.

So start writing….

Grev

All they wanted was a faster horse! 23 January, 2015

Posted by varoom in Business Plans, Strategy.
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In my many meetings with early stage entrepreneurs and later stage companies I hear many say that they plan to ask their customers what they want and just go ahead and develop a product that satisfies that request. It is dangerous to purely depend on your customers having the best vision of the future. Henry Ford was quoted as saying…”If I asked my customers what they wanted, they would have asked for a faster horse!”
You need to have a clear vision of the future needs of the market even ahead of what the market demands today. Many revolutionary products and businesses launch products that are truly original and not what the market would have envisaged for themselves.
Steve Jobs once revealed “You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.” This recognises another side of the problem, time to market, as the marketplace and customers needs are changing all the time you risk always being behind the market if you simply build what you are told the customer needs.
The best approach is to figure out where the market is going or what a potential, unforeseen, problem will face customers in the future. Then conceive of a product strategy that will enable you to launch a product that satisfies a future need just at the right time, hopefully catching your competition out. This has been done many times before and many businesses have succeeded with this approach.
It is a risky strategy, building something that no one is asking for, but if you believe in the future need and can build a business case to go after it. Then go for it.

Grev

Your investor proposition is like a 3 legged stool 24 July, 2008

Posted by varoom in Business Plans, Investment propositions.
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As I regularly prepare companies for investment readiness I’m asked many times what investors are looking for. This is a tricky question especially in these credit squeeze times. However many significant investment funds were financed before the current crisis and may be in a position to invest if the proposition is right.

So what is the right proposition? The situation varies with each investor, timing of their funding, the mix of their portfolio between risky and conservative, between types of technologies or industry sectors, between companies needing a great deal of management involvement and those with a strong team who are self sufficient.

If we meet the ideal investor with money to invest, a healthy portfolio and management capacity to take on another investment. He’s looking for opportunities where his investment will take the company onto a high growth path at a time where the investment risk is at its lowest.

You just have to make your proposition in terms that maximise the potential for growth and minimise the risk.

Once you have passed this hurdle then you start being judged against many criteria in order for investors to choose between the many proposals they have.

In order to simplify this I’ve conceived an analogy. “Your investment proposition is a 3 legged stool”. If you have a weak leg you risk falling on your Ass.

So I believe the three legs are;

First you must have a market or business opportunity for growth. There needs to be a big enough opportunity, measured in terms of accessible market, market share, market growth or raw business potential.

Second you need to demonstrate that you have already got or will soon build a strong team that can deliver on the potential business opportunity reducing risk.

Thirdly defend your position, in the market, with intellectual property, trade secrets, patents, copyrights, know-how, first mover advantage which prevents other competitors from entry. Reducing risk and increasing value again for the investor.

If you can demonstrate that you have three strong legs to your proposition you may get through to the next round….

Grev