Came across this interview between Harvard Business Review Ideacast Sarah Green Carmichael and Norman Winarsky, the man behind Siri. Found it interesting so have summarised it as below for anyone that finds it easier to read.
Elements of a good business plan
- Business plan – living document is your value proposition
- Used to establish for yourself, the team, investors what the actual value is that you are creating
- Articulates all the elements you really need to understand
- What the market pain is
- Why it will grow and become a great opportunity
- What your team is, why they are great at making this venture
- What is your differientation? What is your disruptive opportunity is?
- To Sum up
- Market opportunity
- Value proposition
In order to have a technology meet a market need, there are two ways to go about it:
- Either start from a market problem – how can you solve a problem? Find those market problems then find a differientated technology solution – This is the best way to do it (preferred).
- The other way is to start with a technology and say “what is the market problem it solves”. If you think you have a breakthrough in a technology and your compelled to find a market problem.
There is a thing known as “valley of death” between invention and innovation. Invention is when people create great technologies and this happens all the time, usually those technologies do not lead to market opportunities however. They usually occur 5-10 -20 years before there is a real commercialisation opportunity. Unfortunately this is to far and too distant for most companies to fund that kind of opportunity. When companies want to bring a product to market they only want to look 12 – 18 months ahead usually. Between bringing a product to market and where ideas are first invented is often called the “valley of death”.
How you go about crossing the valley of death or bringing technology to market is first of all starting with the market problem, ticking that market problem then finding the technology solution and or differenientation business solution, a great team and then iterating on that and going to market.
Sometimes in enterprises it can take too long to go to market. Going to market is a particularly important element of that. Laying out those plans and laying out your value propositon and your business strategy is going to be essential in the success of your delivery into the market.
What do I do if someone has the same idea as I do? How do you know whether or not it matters if someone else has the same idea?
“First of all you can assume that in this world, if you have a great idea there is probably a 100 people that have it too. The ability to execute on your idea and have a differentiated approach is really what will make the difference.”
- The differentiated approach or the competitive approach is what makes the difference. Once you have a differentiation and people see what your doing, they will follow. People will attempt to duplicate what your doing so the ability to race forward and the ability to have something that other people can’t quite do for at least a year while you’ve done it is essential. And having a great team is a real important part of this. The team that can work in a start up often 7 days a week 12-14 hours a day is the kind of team you want. A mediocre team will create mediocre products, a great team will create great products.
How much of the good business plans that you’ve seen are the ones that are heavy in the numbers/math compared to logical “here’s what we want to do” kinds?
- Business plans are rarely written documents these days. Mostly powerpoints with pictures, text etc
- The numbers are important so that you can understand the market opportunity and can quantify those numbers as well as quantify the value you’ll have and the pricing.
- Getting too carried away with numbers is not a good model. You’re trying to predict where you will be 1 – 2 – 3 years from now. Any longer than that people won’t believe you, and by the way everyone will assume whatever you’ve predicted is going to be wrong. The fact that you’ve predicted it though will at least give you a starting point of how your strategy will be executed and where people can evaluate your strategy.
- I don’t believe the deep maths is as important unless your a deep technology service.
We’ve nearly glamorised failure. Does it have to be that way? Did your team have failures that really re-shaped your course or did it go to plan?
- Establishing a position against failure. I’m against a culture of failure.
- Failure is failure. When you fail, you fail. That doesn’t mean that you don’t pick yourself up and try again.
- When we had Siri we didn’t have a succession of failures we actually had a succession of successes.
- When you’re given venture investment you’re actually given a lifespan. That’s a beautiful thing. Venture money does something wonderful for you – it gives you the burn rate, how much and how fast you’re running out of money and when you run out of money. That means that if you are constantly pivoting, if you are constantly making changes (because of failure) you are burning your venture money and your runway. Once you get venture funding you need to know that you have a plan that you can execute on. There is no alternative. Yes you can modify the plan you have as you go on but that isn’t a strategic change in the company. That is evolution and refinment of your model.
There is a debate going on now versus venture funding and bootstrapping it. Do you think people should bootstrap or get venture funding?
- If you really want to make an impact that touches millions of lives your are not necessarily going to be able to bootstrap. Deep technology and others are going to need a great deal of resources
- You are in a race with so many others. In this hyperfast world we are in you can’t afford to normally bootstrap to get to market.
- All that said, bootstrapping can still good be a good model. It means your keeping it within the company and sharing less with investors.
- The difference between bootstrapping and venture investment – venture capitalists are not just sources of money. They are sources of relationships, their networks, they help you recruit they help you find partners, they help you find customers. They great venture capitalists are the ones that will help you build your company and if you’re bootstrapping you won’t have them by your side.