Why Creating a Business Plan Is a ‘Waste of Time’

When I started exploring entrepreneurship in college, I was exposed to the education paradigm - write a business plan. I was a good student. I wrote 9 business plans in 9 months for my first startup. It turns out, that was not the best way to spend my time. Yes, planning is essential. But it needs to be done in the right proportions. Less at the start. More as you mature.

Professor Carl Schramm recently wrote a carefully researched book called 'Burn the Business Plan.', listen / read to an interview about the book's highlights here.

Hat tip to Jim Geissman.

Nonprofit Accelerator Shark Tank!

Shark Tank 1 Slides - NONA 1 - LI2.png Friday was a big day for the students in my Nonprofit Accelerator's Spring Cohort. They spent from 9am to 3pm practicing and refining their pitches in preparation for the Shark Tank. My thanks to Kelly Minton, Jim Stanczak, and Bill Cole for helping me with the PitchCamp portion of the day!

At 3pm, the above-pictured group of amazing business and nonprofit leaders heard the pitches and gave #LovinglyCritical feedback. They filled in detailed scorecards so the students could see exactly where they were weak and strong. Several sharks offered to provide follow-up help and advice.  What a day!

My students did a great job upping their game and have learned a great deal about what they need to do to get their ideas ready for market. I can't wait to see how they do at the next one in July!

My thanks to our Sharks!

  1. Bill Grinnell - Angel investor, business owner
  2. Katie Zobel - Community Foundation of Western MA
  3. Mary Walachy - Davis Foundation
  4. Murdoc Khaleghi - Serial entrepreneur & angel investor
  5. Nancy Urbschat - Business owner, active nonprofit board member
  6. Philip Silva - Angel investor, social entrepreneur
  7. Randy Krotowski - Retired top-5-in-world CIO (Chief Information Officer) for a fortune 10 company.
  8. Ray Berry - Entrepreneur and former CFO of the United Way
  9. Rick Plaut - Angel investor, entrepreneur, educator
  10. Stephen Brand - Social Entrepreneur and educator
  11. And bonus Shark Sarah Carlan - Family Foundation executive

Announcing the Spring Nonprofit Accelerator Cohort

I am proud to announce the Lean Innovation Institute's Spring 2018 Nonprofit Accelerator Cohort. Classes began back in March and, wow, the energy and dedication in the room is almost identical to what I saw in the VVM Startup Accelerator! These are leaders boldly seeking new ways to create sustainable, unrestricted revenue that furthers their missions. I am privileged to have such great students. The organizations these students hail from are:

www.humanserviceforum.org

www.rise-at.com

www.rsi.org

www.thetechfoundry.org

www.viability.org

Yup, they have two teams in :).

$200k Raised by 1st Nonprofit Accelerator Grad

Last summer I ran a pilot Nonprofit Accelerator with one large local nonprofit (name withheld until they give permission to share :)). Their core business is not education. Yet, over the years they developed a powerful curriculum that worked. They came to me wondering "is this a A) nice program we can slowly expand here in the Valley, or B) something with the potential to impact hundreds of thousands of children around the country and bring in millions of dollars of unrestricted revenue for us?" That was a great question!

We spent six months working through the Lean Innovation curriculum. Their team knew a lot of things, but there was a lot they didn't know... like who was going to pay? How Why would they pay? How much would they pay?

I am proud to share that on graduation day they pitched to their board and a group of potential funders. By the end of the night they had commitments for over $200k to fuel a pilot.

I can't wait to see what our next Nonprofit Accelerator cohort will do!

KISS Canvas 8. Value Models

[This is a part of a series on the KISS Canvas] What price should you charge for your product? How should people pay you? What value do non-paying customers provide you? All of this is covered in the Value & Revenue model column of the KISS Canvas.

https://www.youtube.com/watch?v=-ybTYXi5aDY&list=PLdfQKNp8w2QnXP_JGRiKbpFGcU7qmphJU

Here is each sub-lesson:

  1. Intro
  2. Every customer segment pays
  3. Understand customer expectations
  4. Know your models
  5. Choose your pricing strategy carefully
  6. Discover your price point(s)
  7. Summary

Check out more KISS Canvas Content.

Best Practices for Customer Discovery

At the heart of lean innovation is "getting out of the building" to test your ideas on real live humans! The fastest, cheapest, and most effective way to experiment is with simple interviews. Getting, and then completing, those interviews can be scary as heck for a lot of first-time entrepreneurs. It need not. Here are some tools I use with all of my students to help them find people to interview, secure those interviews, and walk away with the most accurate data possible.

  1. Short lecture on best practices in customer development interviewing (note this is a playlist, so keep listening after the first one is done :))
  2. Scripts for Finding & Securing Interviews
  3. Script for Discovery Interviews (when you aren't really sure what your customer's pains are and want to cast a wide net)
  4. Script for Pain Interviews (when you are ready to test specific pain hypotheses)
  5. Script for Solution Interviews (when you are ready to put a minimum viable product / prototype in front of a customer for feedback on your value proposition)
  6. Script for Get/Keep/Grow (Marketing, sales, customer service) Interviews

KISS Canvas: 7. Grow (Research & Development)

[This is a part of a series on the KISS Canvas] If your flagship product is a success, what next? This section of the canvas helps you think through what new products you might offer and what new customer segments you might approach. This video explains some of the core concepts...

https://www.youtube.com/watch?v=jymJ22-jRuc&list=PLdfQKNp8w2QmhqRTnk0lDBeRuSSqagihV

Here is each sub-lesson:

  1. Intro
  2. Add “sizes”
  3. Solve your customer’s other problems
  4. Bring your existing product to new customer segments
  5. Summary

Check out more KISS Canvas Content.

KISS Canvas: 6. Keep (Customer Retention)

[This is a part of a series on the KISS Canvas] This section of the canvas helps you think through customer retention. Once you a customer purchases your product, how do you prove to them you have kept your promises?

https://www.youtube.com/watch?v=JDRApeFP-xc&list=PLdfQKNp8w2QnxBMFiuo3VottJLI0qP_9V

Here is each sub-lesson:

  1. Intro & Keeping your customers is the right and smart thing to do
  2. Make your benefits visible
  3. Scorecards make benefits visible
  4. Summary

Check out more KISS Canvas Content.

Western Mass Business Show Interview: Innovation in Western Massachusetts

My thanks to Ira Bryck for a wonderful interview on his Western Mass Business Show radio program on WHMP. We chatted about the various ventures I have had the joy of being a part of, especially the River Valley Investors, Valley Venture Mentors, and my new startups Launch413 & the Lean Innovation Institute. You can here the full interview here: Western Mass Business Show 3.31.18 | WHMP-AM – News – Information – The Arts

Proud Prof: Former Student's Company Opens Office in Paris

MassLive and the Springfield Republican kindly did a story on RVI portfolio company and VVM alum Cambridge Blockchain opening a new HQ in Paris. Full article here.

SaaS Best Practices

This article shows what you learn by reviewing the best practices of over 6,000 6,000 Software As A Service (SaaS) businesses. Highlights:

  1. You need to localize your pricing, because we’re in a globalized world
  2. Delinquent churn (AKA credit cards expiring and the like) is a tricky beast that must be slayed early
  3. You need to spend so much more time on your pricing
  4. Annual subscriptions are your friends. Get more friends.
  5. Expansion revenue (AKA more revenue from existing customers) is absolutely key

Want to know more? Read the full article.

Hat tip to my former student Daniel Nelson.

KISS Canvas: 5. Get (Marketing & Sales Channels)

[This is a part of a series on the KISS Canvas] This section of the canvas helps you understand the many different ways you can find and cultivate relationships with your customers (AKA marketing & sales). Here is a video explaining the how to use this part of the canvas and tips for understanding and strengthening your hypothesis around customer acquisition.

https://www.youtube.com/watch?v=hUuYj5ZeWKc&list=PLdfQKNp8w2Qmj2EzvePWSkV9d8TYFB6mJ

Here is each sub-lesson:

  1. Intro
  2. Decide: direct or indirect
  3. Decide: physical or digital
  4. Discover key channel metrics
  5. Decide how you’ll generate leads
  6. Determine cost to acquire a customer
  7. Summary

Check out more KISS Canvas Content.

KISS Canvas: 4. Competitive Advantages

[This is a part of a series on the KISS Canvas] This section of the canvas helps you find and own your niche! Here is a video explaining the how to use this part of the canvas and tips for understanding and strengthening your competitive advantage.

https://www.youtube.com/watch?v=aUPTCDVQxD4&index=1&list=PLdfQKNp8w2QkrkmBQFb29QWus5O6vEPsd

Here is each sub-lesson:

  1. Introduction
  2. Know your competitors
  3. Don’t underestimate the status quo
  4. Competitors are free R&D!
  5. Advantages stem from Benefits
  6. Create a Competitive Landscape Map
    1. TOOL: Get a blank Competitive Landscape Map
  7. Seek barriers to entry
  8. Summary

Check out more KISS Canvas Content.

KISS Canvas: 3. Features & Benefits

[This is a part of a series on the KISS Canvas] On to most entrepreneurs' favorite part of the venture, the product! But to do so, we must first understand the difference between features & benefits. Benefits are what the customer wants. Features are how we give them what they want. Confuse these and you'll keep building the wrong product or providing it to the wrong people.

Here is a video explaining the Features & Benefits columns of the KISS Canvas.

https://www.youtube.com/watch?v=Pu_-xSeQ-u8&list=PLdfQKNp8w2QkuxtOyiq7FPfOYiUFesdRs&index=1

Here is each sub-lesson:

  1. Introduction
  2. Customers buy Benefits, not features
  3. Benefits are the reverse of Pains
  4. Focus on the FIRE!
  5. Features are dictated by Benefits
  6. Know your product status
  7. Good taglines emphasize Benefits
  8. Summary

Check out more KISS Canvas Content.

Why Innovation Fails

This great article on Forbes details the many ways innovation inside of a mature organization can fail. Some of the key points:

  1. Ideation is easy... and not enough: It is relatively easy to hold events (like hackathons). They are fun, engaging, and generate a lot of ideas. But... it is just step one of the journey. Almost all organizations fails to do steps 2+ right, which leads to employee frustration and failure to develop the ideas. Doh!
  2. The model needs to work: Your idea needs a scalable, economically sustainable business model. With, you know... customer who want to pay you more than it costs to make & deliver it :). People often assume that if they have a great idea, making it into a great business is fairly straightforward. Alas, it is not so!

Mature organizations are usually filled with people who are great at executing a proven model. They usually do not have expertise in how to generate, vet, and validate new business opportunities. These are the very issues we help mature organizations work through at the Lean Innovation Institute.

Hat tip to Ric Pratt.

 

Your mature small manufacturing business needs to change? Advice from an expert

Michelle van Schouwen kindly interviewed me for the Succeeding in Small Business Blog. The post, called "Your mature small manufacturing business needs to change? Advice from an expert" reviews some of the core tips of the training I provide through the Lean Innovation Institute. Thanks Michelle!

KISS Canvas: 2. Pains

[This is a part of a series on the KISS Canvas] Once you have identified who your customers are, your next job is to gain deep insights into their pains. This video walks you through the PAIN box of the KISS Canvas, but more importantly, gives you tools for finding the pains that you must solve first if you want to succeed.

https://www.youtube.com/watch?v=aQkOMKe4sG0&index=1&list=PLdfQKNp8w2QmnYEF5jlgQVTOixHXrSBG4

Here is each sub-lesson:

  1. Introduction
  2. Pains are felt by the customer
  3. Only list pains you can address
  4. Pains must be intense
  5. Summary

Check out more KISS Canvas Content.

KISS Canvas: 1. Customer Segments

[This is a part of a series on the KISS Canvas] Knowledge of the customer is the foundation of all great organizations. Mess that up and your organization eventually comes toppling down. If you are a startup and you goof it up you never get off the ground in the first place.

This video series explains the KISS Canvas's 1st box, and in so doing gives you a framework to quickly and effectively identify who your customers are and what critical properties they have.

https://www.youtube.com/watch?v=PgD_B4qa4TM&list=PLdfQKNp8w2QnFm9-ynAKmoVR5v1HTw8iI

Here is each sub-lesson:

  1. Introduction
  2. Users & payers are not always the same
  3. Single or multi-sided market?
  4. Customers are always people
  5. Know the decision chain
  6. Create a "sample customer"
  7. Customer segment evolve
  8. Size your market
  9. Summary

Check out more KISS Canvas Content.

Webinar: Practical Tools to Evaluate Your Marketing & Sales

I like practical, help-me-make-a-living-now tools as much as the next person :). One of my favorite such tools in the Prospecting Plan. Common Capital kindly invited me to do a webinar on this topic AND they made it free and open to the public. You can watch a recording of the webinar, and find links to the tool referenced in it, below. https://www.facebook.com/commoncapitalinc/videos/752346554974367/?hc_ref=ARQ2_euweZIvPDh99Tbxn_XFy2fqM8pEeDzaIZVYPVclvD3dDDX8w0e3Ed7jyooyiQQ

To get a your own copy of the tool I used...

  1. Go to this GoogleSheet.
  2. Go to FILE > MAKE A COPY, or if you like Excel go to FILE > DOWNLOAD AS > EXCEL.
  3. Start filling in your own data.

Hat tip to my friend Jim Mumm, who taught me how to a prospecting plan in the first place :).