Business plans?
One evening I had the privilege of having dinner with David Friend, a serial tech entrepreneur, and currently the CEO and founder of Carbonite (a new back up solution that keeps all your personal data safe). He had a very interesting perspective on business plans. He had never made a business plan for any of his ventures. However, every time he was starting to work on an idea he would open up powerpoint and start creating a presentation. It would include mock ups of the product as he was currently envisioning it and examples of future advertising. Creating advertising copy is an incredibly useful exercise because it forces you to focus on what is the main value your product is offering.
I have taken David’s advice to heart and have since added my own tips to this process.
Keep two powerpoint documents. One is an executive summary of sorts to show to people who are interested in your progress and want to learn more. This should include the problem you are solving, some mock ups, business model, mission, summary financials, etc. The other powerpoint document is for you and your close partners only. It is a place to hold all your ideas, thoughts, links to related articles and resources, next steps, etc.
Why is this bootstrapping? It is saving the entrepreneur time, money, paper, and formality. You are focusing only on the core necessities to make your business happen but still providing some documentation you can show to interested third parties.
Always remember:
“Bootstrappers don’t write lengthy business plans, chase deep-pocketed investors, or indulge in overly academic market research exercises. Instead, they focus all of their considerable energy, brainpower, determination and skills on creating a business that can actually succeed in the real world.”
-Greg Gianforte, CEO, RightNow Technologies
One Comment
Adam Gilbert
August 11th, 2006 at 12:44 pm
Dan-
That is very interesting and makes a ton of sense. Mocking up future advertising really forces you to think about what you are really offering your potential customers. I always try to create businesses that are customer-serving and not self-serving. All too often, entrepreneurs spend countless hours and lots of money developing a product or service they have fallen in love with but somehow forget to ask their target customers if they would value such a product/service.
I also totally agree that creating a formal business plan is nonsense for a bootstrapping entrepreneur. Unless you are going after VC or angel investors there is no need to waste your time. First make $1, then $10, then $100. See if your idea actually works. And if you can’t charge clients then offer your service for free and win them over on the best customer service in the world and test and test and ask them for feedback!
I personally find creating just a simple marketing plan has worked very well for me in the past. Many times that is even unnecessary. I am currently writing about my marketing plan in my blog; I’d love for you to check it out. You can learn so much about your market and customers and if your product really has merit very quickly.
Very interesting piece of advice that is very useful really forcing one to look at why they are in business and how they are going to serve people. Thanks for the tip!
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