I love the word “degenerate” and I’am sure Dr. Drucker chose the word intentionally.
There is no value in any plan except that it translates to action. The word “degenerate” emphasizes that the plan must transform and go away as soon as it materializes.
I’ve heard it put another way… “Don’t just plan there, DO SOMETHING!”
Strategic Planning and Business Modeling, although important and vital, are worth nothing in themselves. As soon as you have a plan, test it in the market with your customers. They will let you know if you are on the right track.
Blogging Gazelle is published daily by Shawn Carson
Dan Marcum of Relevance Capital says there are three types of business plans; one that is 3 pages long, one that is 30 and one that is 300.
This outlines the stages of involvement in the investment relationship. The 3 page executive summary is your company’s resume. It’s long enough to generate interest and hopefully a request for a meeting. The 30 pager is the typical business plan that provides the details about your market, financials, development and the team. And the 300 page plan is the due diligence checklist you will be given when an investor gives you a term sheet.
The 3 pager is much stronger after the 300 pager is done, BUT!!!! you can’t stop everything and focus solely on the writing a detailed business plan because the moment you finish, it is out of date.
- Keep your Business Model Canvas Current. You should be able to whip out a 3 page Executive Summary when you need it but update it as you go.
- As you iterate the Business Model Canvas, keep a digital folder of every website article, market research report, financial analysis, customer interview, legal document and bank statement. This provides the meat you’ll need to write the 30 pager. Keep it updated every three months or so unless you get a meeting, then tweak it one last time.
- The 300 pager can probably wait until asked for. Each investor has their own and it may be long or short and they will give you a checklist. If you have kept your digital file organized, you will be able to quickly put together all the documents they ask you for.
Orienteering is a sport where one uses a map and compass to navigate a course in the wilderness. The map provides the big picture but it’s the compass that get’s you there. Your destination may involve fording a river or getting around a steep cliff. You may have to climb or descend and the established trail may not take you where you want to go.
For the startup, there is no accelerator program, advanced degree, mentor council or best selling author that can tell you how to be successful. These things all have their value but all of them are no more than a good map.
Your compass is your business model that is built through the discovery of customer value. Obstacles may require a pivot but the business model will keep you pointed in the right direction.
For a guy still in his twenties, Karl has a profound grasp of entrepreneurship.
Follow his blog: http://bit.ly/MnctJY
Actually the email thread went like this:
John: “Business is pretty simple: make stuff, sell stuff”
Jerry: “…Get paid!”
It is amazing how some brilliant people and thought leaders get so focused that they miss true opportunities. This is proof that technical genius is NOT necessary for entrepreneurial success. Michael Dell is one of the people that brought the computer to the masses and he didn’t complete his degree. His products were not all invented by his company.
But, he had a solid business model.
The opinion that counts the most is the customer’s. Don’t run with the pack. “Me Too” business models slug it out in the mud. Find a need that is unmet and one that customers are ready to pay for.
Be different. Be better.
Low Cost Provider is a good business model but only if you have a significant competitive advantage in cost. Mature markets always compete on price until technology changes the game.
Better to compete on value. Solve a big problem in a big market. The iPod was not the first MP3 player. Nor did it enter the market as the cheapest. It cost $300 and in two years, it captured 92% market share. It wasn’t perfect. It didn’t have more features. It had three things:
- 1,000 songs in your pocket
- Easy interface
- You could buy your favorite songs for a dollar
But it had one big thing… it was cool!
People like cool. People paid for cool. A lot of people.
Read “Duct Tape Marketing” by John Jantsch