business plan or powerpoint?

Here's the transcript from an IM conversation I had with a friend today regarding business plans.

friend: hey, you have any business plan docs laying around?
friend: that you could share
TimothyJ: you want some sort of template?
friend: no, looking for a real one
friend: that people actually used
friend: and that doesn't suck
friend: i can find templates, but I'd like to see what a real one looks like
TimothyJ: ok. let me see if i can dredge an early copy up. i'm not a huge fan of business plans however. I think there's an internal document you create for brainstorming purposes and then you boil that down into slideware
TimothyJ: you can pretty much use Guy Kawasaki's art of the start as a template for that
friend: ah, interesting
friend: well most of the standard stuff that people put in there is BS
friend: projections of revenue, hiring, etc
friend: but seems like investors want it
friend: even though they know the #s are wrong
friend: way way wrong
friend: vision isn't BS of course
TimothyJ: state your problem, why you are uniquely positioned to solve it, IP, market size, how much it will cost to ramp, a good plan for doing that ramp on a milestone basis
friend: ya, sounds reasonable
TimothyJ: yeah, the investors want to see it's a big market to go after so that's the top down market analysis
TimothyJ: then you do a revenue swag based on percent of market with some sort of ramp the investors can swallow
TimothyJ: first year is to nail down early adopter accounts (and build out product)
TimothyJ: not big revenue expectations
TimothyJ: 2nd year (in your model) would be channel sales relationships and proving out the sales/delivery model are repeatable
TimothyJ: 3rd year is revenue growth, showing scalability
friend: that sounds like a reasonable model
TimothyJ: brainstorm all that, condense it into a deck, and then go practice pitch it to a friendly vc

As you can see, pretty straight forward stuff. I think people get too caught up in creating a comprehensive business plan. In a software startup you need a thesis (the problem), you need to figure out why you have a clear chance of building out what's needed (risk mitigation), and why this grand product will cause people to separate themselves from their money (high value). I think the business plan is a great exercise in force thinking through the business. It just changes so many times over the course of the first 18 months or so it's better to think in terms of slide decks or mind maps.

Henry rollins and me

Wow, one of my punk idols used to stay, at this, the last available
hotel in Soho.

Passive voice is a form of aggression

This sign was posted on the bathroom wall inside Forrester. I'm not
sure what destructive behavior the employees are engaged in but I love
the graffiti comment scrawled across the top.

Forrester Meeting

I had a great meeting with Josh Bernoff, one of the authors of Groundswell today. Josh has a lot on his hands lately with the announcement that Charlene Li and Peter Kim are leaving. Was an informative meeting and always great to work with the people at Forrester. Good luck Josh.

Where am I?

Reasons Collective Intellect is the best

I was in a meeting earlier this week strategizing on an RFP response.
My 9 year old daughter was at the office with me and asked me to
explain what we were trying to do. I told her we wanted to explain to
the other company why we were the best solution. Several minutes
later she pushed a notebook towards me (see above). Incredible! I'm
going to have to put her on payroll...


Looks like the pic is kinda hard to read so here's the list:

1. The best employies [sic]
2. They pull the best info together
3. They pick the finest blogs
4. They give information about everything
5. They give info about the company, it's competitors, and the company's stregths [sic]

truly awesome :)

Interview

I was interviewed the other day by local Colorado marketing blogger Marie Rotter about how Collective Intellect is helping companies track, understand, and engage with social media. It's fun doing interviews with bloggers who are trying to spread the social media word. Very meta I guess. Social media on social media.

I also, ordered Charlene Li's book called, "GroundSwell" off of Amazon today. I recently sat on a panel with Charlene, looks like it has great reviews, and am looking forward to sitting down with it somewhere over America in the near future.

Instapaper

Found this gem on Metzger's blog this morning. Instapaper let's you store things in a folder that you want to read later. It sort of a simple workflow that just creates a list of things and let's you work through it, crossing things off as you've read them. Great idea and much better than bookmarking. The only things it's currently missing IMHO are tagging and sharing. I want to tag things inside to delicious so that I can retrieve them again in the future and I'd like to either share my whole folder, or tag items as shared and share that folder with the public, or email one or more of the items in my list to other people. These shared lists I would then like to widgetize and put up on my blog or facebook page. Let's see if Instapaper is listening...

CTO Series - Out of the Goo

At the outset a company needs a huge amount of energy from a very small set of people to have any sort of chance of making it through the first year. My companies have been fairly complicated software affairs and so much of the energy input has been in the initial product buildout to sufficiently demonstrate the idea. So, in those early heady days of whiteboard brainstorming, myth making, protean moneyless, nothing-else-exists, insomniac haze, everything draws your attention. Servers need to be built. There is no data center so the servers sit half tilted on the desk next to you humming away. Source control needs to be set up. The beginnings of an architecture need to be laid down. You set up the company's email and website. There is no marketing, no sales department, no one booking your flights. You beg and borrow from friend's time to help with various aspects. You push friends and family to the limits of their patience. And you code like crazy, pulling all nighters when you're on a roll and some thorny problem is nearly within your grasp. You're in every aspect of the product, pushing each just far enough along to get that primal system to crawl up out of the digital goo limping into reality.

Key take-aways:

• The early days of startups can get you distracted in a thousand directions so build a plan
• The plan should be optimized to get you into discussions with *real* customers as soon as possible to validate the value
• Don't fall in love with your plan, it will change, perhaps daily some weeks
  
• Build top 10 lists. There's a hell of a lot to accomplish. Figure out what matters most to the plan and create a top 10 list.
  
• In the list take on the hard problems yourself, delegate the easy ones
• Lead by example. Push people but don't expect them to work harder than you do.
• Have someone tend to the business. Incorporation, setting up health insurance, getting office space, chairs, and printers, and a checking account are not where you add value
• Communicate. Constantly elaborate on the vision to any one who will listen and primarily anyone in your startup. This will help you in the evangelism phase later. Things that seem like really great ideas in your head sometimes fail the test when you have to communicate them out loud. This forces you to think through the problem in greater detail.
  
• Don't get distracted. Don't look at your email when you're focusing on the product. If someone has a question that doesn't need to be addressed right away tell them you'll get back to them. Let people know when it's ok or not ok to come ask you questions. Wear a set of headphones when you don't want to be interrupted even if you're not listening to anything. Most people won't bother you if you have headphones on (same as on a flight).
  

Once this is accomplished the road show begins and you spend a lot more time talking to people than writing code. In order for your company to survive you must raise money, either by selling some form of the product, or taking in venture capital. This slows you down to a crawl but gives a lot of perspective on the value of your creation and gives you time to digest the market and what might be important. It also preps you for the next stage in the company's development, R&D growth. Rest here on the bank for a just a moment. There's a lot more evolution coming.

Twitter Micro Markup

Just like the semantic web I think Twitter would benefit tremendously from introducing a micro markup language that monitoring tools could use to pick up data more accurately. It's a fairly hard problem to parse blogs and tag them with semantic and qualitative data. Now think about shrinking that text down to 140 characters and you really don't have a hell of a lot to work with. If we introduce an abbreviated name-value system inside our tweets we can convey a ton of rich information that will be easier to get the message across to the companies and services that anger and overjoy us, events we're attending, observations we make, etc. It's time to take the next step with Twitter.



I think it would be simplest to put an abbreviated 2 letter type code at the start of the message with a sentiment symbol next (+ = good, - = bad, / = neutral), and the subject that you will be talking about. For instance I just got back from a trip to Minneapolis. My flight was delayed again (probably my fourth flight in a row on United that was delayed).

I twittered the following: "RV-UAL another trip, another flight delay on United". In the first 6 characters I know that this is a review of United Airlines and it is negative. Simple, brief, easy for both humans and machines to parse and interpret.

The codes I'm thinking of are:
OB = observation
EV = Event
RV = Review

If it's an event, perhaps the standard could be to create the event in facebook and snurl it for the event subject. what are some others? Let me know what you think!