Month: April 2010

No plan survives first touch with customers

  • The last word on startup success.
  • Why writing business plans is NOT done first. It is something different that needs to be developed first and that is – a business model.  A summary of the lessons learned is given below (copied from the original blog of Steve Blank HERE):
  • A startup is an organization formed to search for a repeatable and scalable business model.
  • There are no facts inside your building, so get outside and get some.
  • Draw and test the Business Model first, the Business Plan then follows.
  • Few if any investors read your business plan to see if they’re interested in your business
  • They’re a lot more interested in what you learned

Here is another article on the Financial Times (Read FT Article **). The article discusses the act of pivoting in a startup which refers to making minor changes in the original idea of a business rather than going for a completely new business altogether. It points out that though entrepreneurs start with an idea that looks perfect, it is the feedback from the customer that first triggers a pivot. The more successful you are in pivoting, better are the chances of your startup doing well. The article also discusses how along with many others Facebook and Twitter pivoted and then created history. I guess my previous article on Starbucks (Starbucked)also referred to the same without using the term pivot. I mentioned there that Starbucks didn’t start as a food service concept. Their idea was to sell coffee so that people could make it at home!

One interesting quote from Mark Suster in the FT article:

“Every entrepreneur starts with an idea that they believe makes sense. But then your customers start using your products, your competitors come out with new offerings and your partners decide to launch a similar product rather than working with you. You’re forced to pivot on a regular basis.”

For more from Mark, I suggest you follow his blog which is a must read for any entrepreneur. It talks more than just about pivoting!

** You will need to register for the FT article. Don’t worry, there is a free registration that allows you to see upto 10 articles a month. Trust me, it is a good idea to register free for that! Better still if you can go for a premium membership.

10 questions you should always ask once a month

Though the original blog article is meant for entrepreneurs (read here), I believe that a few of the questions would apply to you if you are a manager as well. (Of course, only IF your organisation gives you the liberty to take decisions and implement initiatives. 🙂 ) I have split it up into two parts. The first set applies better to the “managers” but the entrepreneurs would have the tougher job of answering both the sets! 😛

Set One:

  • In one sentence, what does your product do and who buys it?
  • In one sentence, why does someone buy your product?
  • What one thing is most responsible for preventing sales?
  • What’s one thing you could do to get more feedback from customers, potential customers, or sales you’ve lost?
  • If you were forced to hire someone today, how would you define her job such that she would contribute enough revenue to cover her expense?
  • What initiatives could be done half-assed without significant impact?
  • If you could get one solid hour of advice from a guru you respect, what would you discuss and what would be the goal of the meeting?

Set Two:

  • If you had zero revenue from now on, on what date would you run out of money?
  • If someone handed you $100,000 today, how would you spend it to maximize future profits?
  • Which of your business operations do you hate?

These are a brilliant set of questions which brings clarity of thought and clarity of thought is something which is at a great risk always when you are dealing with a highly fluid situation like building a new organisation or spearheading a new product launch.

DNE Blog: Insights from the Livestock Roundtable

Last week, the Centre for Insurance and Risk Management, IFMR, convened a roundtable on Livestock risk that was attended by all the major stakeholders to talk about the various issues and challenges faced by them in bringing effective risk management solutions to livestock owners. The participants involved all the major insurance companies, NGO like PRADAN, apex institutions like NABARD and NDDB, co-operatives like Amul and DRDA, MFI like SKS Microfinance and international organizations like World Bank, ILO and ILRI among others.

Here are the key highlights of the discussions at the roundtable:

  • Lack of dependable information on insured livestock
  • Highly specialized service providers catering to a limited range of services
  • Limited bandwidth of MFIs to offer livestock registration/healthcare services to its clients
  • Difficulty in uniquely identifying livestock and complications in the process
  • Need to build awareness on terms and conditions of the insurance coverage and benefits of livestock insurance
  • Need to evolve models based on community involvement or TPA

Read the details of the event and the insights of DNE at the DNE section of the IFMR Blog .