Interesting. I
just had an epiphany that makes the true purpose of a business plan abundantly
clear. After reading Steve Blank’s article title No
One Wins in Business Plan Competitions, the mad sea of entrepreneurial
tools just simplified. Blank says that, “a
business plan is the execution document that large companies write when
planning product-line extensions where customer, market and product features
are known.” The operative word here is, “known”. Certainly, there is prerequisite research entrepreneurs
do to understand their market, but the reality is is that is never enough to
know what’s to come. The future for an entrepreneur
is still unknown. Blank’s article was
inspired by his very public condemnation of schools that host business plan
competitions. Blank thinks judging these
sorts of competitions is a waste of time.
His solution? Building a business
model instead. Blank says that business
models speak to the needs of the customer—not the market. I like this approach.
Steve Blank has founded a business or two in his
time. E.piphany, his most recent marketing
software startup. His other startup
businesses were Zilog and MIPS Computers (two semiconductor companies), and Convergent
Technologies. Convergent Technologies is
a workstation company. Blank’s list of
businesses is filled with five additional startups. Who’s knowledgeable about business plans? This
guy.
Experts are not born.
They are made. Marshall
Mitchell, Co-Founder of Different
Drummer, is a dive-in-and-make-it-work entrepreneur. He’s an expert business plan marker. What this?
It involves a pitch, an entrepreneur’s first round business plan draft,
and a big, fat red Sharpie. Mitchell’s entrepreneurial
leadership styles slap the newbie in the face with common sense. Mitchell’s expertise scream
practicality. If it plan does not make
sense on paper, it will not make sense in real life. In a one-on-one conversation with him,
Mitchell explained that, “Entrepreneurial success cannot simply be
achieved. One has to work their way into
success. Usually, that success never
comes from a business plan, anyway.” Mitchell
suggests that formal business plans are purely prepared out of formality; not
because the idea is good, but because some corporate know-it-all said entrepreneurs
had
to make them. Again, Mitchell’s
expertise is another very candid approach to this world of professional risk
taking. I like It.
Mitchell explained that investors don’t want the
fluff. They want to make sure the dollars
and cents make sense. At the end of the
day, everyone is digging from the same pot of gold. Mitchell left me with the question, “How will
investors get their dough back?”
Two very strong experts have offered similar
approaches and techniques to how to gain the goods from investors. I’m intrigued by both experts because the
approaches are innovative and uncommon.
How else does an entrepreneur expect to get the attention of an investor
other than to be uncommon?
