Planning, Startups, Stories

An Interesting Drawing; Useful Viewpoint

This image is from Egghead Marketing, in an announcement of a Twitter business plan contest. It's an interesting summary of a business plan focusing on innovation assessment, written to be read by outsiders; the new world. 

Of course it's a subset. We're talking about twitter, as in extreme social media, extreme Web 2.0, extreme new world. No wonder it puts innovation assessment at the center. Also no wonder it emphasizes business model, market research, and management team. Not at all by coincidence, those are the factors that most influence leading-edge investors when looking at leading-edge companies for leading-edge new deals. 

Business model is particularly remarkable. Who needs to talk about business model? Mainly new deal companies that don't have any obvious way to show investors that they can make money. We didn't talk about business models at all until companies started getting lots of investment money without having one. 

I said subset. This business plan is a selling document, designed to prove concepts to outsiders. It's not what every business needs. Form follows function.If you don't have to prove your market to outsiders, then you might focus more planning attention on what you're going to do and what's going to happen and less on proving to outsiders that it's likely to work. 

One of the fundamentals of my plan-as-you-go business planning approach is that you don't do the supporting information if you're not going to use it. Do the market forecast if you have to prove it. If you're going to just do it anyhow (whatever "it" is), because you're sure of your business and its market, then get to work. It doesn't mean you don't want planning to make it better, but it does mean that your plan isn't a document, and it's done for you, not for outsiders. 

Drawing an Audience, The Old-Fashioned Way

This was in our local paper, the Eugene Register Guard, "from news service reports:"

When Dan Roam wants to make a point in business meetings, he doesn't use Excel or give PowerPoint presentations. He uses paper.

In his recently published book, "The Back of the Napkin," Roam gives tips on how to develop ideas and solve problems with pictures to captivate colleagues, as well as visually capturing those "Aha" moments through sketches. 

The Back of the Napkin: Solving Problems and Selling Ideas with Pictures by Dan Roam Read more about this book...

"I started to notice in business meetings that when I would draw on a piece of paper or white board, people would pay an extraordinary amount of attention," said Roam, who owns a managing and consulting firm [sic]. "It would be like bringing magic into the room."

Roam said even the simplest illustrations -- circles, boxes, stick figures -- are great tools for developing concepts intuitively. "This is something everyone knows how to do, skills we developed in kindergarten, but nobody told us we could use in business," he said.

So I like that tip. By the way, if you have a tablet computer, you can have the best of both ways, with a PowerPoint presentation and the ability to draw live sketches as part of the presentation.

Anticipating The New iPhone Apps -- Can They Do One to Make the Battery Last Longer?

I admit I continue to like my iPhone and I don't regret the purchase, even though I was one of those who paid more to get it sooner. And I'm really looking forward to what David Pogue calls iPhone 2.0 in his column,

Hello BlackBerry, Meet the iPhone in yesterday's New York Times.

But damn, I wish the battery lasted longer. Every time I really use it, a day's worth of use gets the battery into that nasty edge of power area. It turns the battery icon red and complains, and warns, and complains.

In his technology column, David Pogue says:

The release of iPhone 2.0 is over three months away, but I'll stick my neck out and make a prediction: it will be a gigantic success, spreading the iPhone's popularity both upward, into the corporate market, and downward, into the hands of the masses. iPhone 2.0 will turn this phone into an engineering tool, a game console, a free-calls Skype phone, a business tool, a dating service, an e-book reader, a chat room, a database, an Etch-a-Sketch, and that's on Day One.

And I say that's all cool, and I'm looking forward to it, but I'll end up like I now am, loving my iPhone for all its cool features but using it mainly as a phone, because if I get a lot of email with it, or use it as an ipod, it runs out of battery before I run out of day.

Suggestion: Make The Small Modules Work First

I knew a man who made a living with complicated mathematical models that he would provide for large companies. He was a professor at the Stanford Business School, but kept his consulting business on the side.

"One thing you want to look for, always, is the simple easy-to-understand model to use at the start," he said.

"Never propose a big job as a whole package. Instead, always propose a small piece of it as a first step. Assure the clients they can abandon the whole thing if they want after that first step. Make it like a tenth of the whole job.

"Make it something they can see, touch, feel. Make it simple to understand. Make it as visual as possible."

If that first piece doesn't work, then you're better off without the rest of the job."

I've used this tip a lot over the years. With my business plan consulting, with my market research, with some of the product development I've done or supervised. It's very important.

This applies as well to a lot of business situations. Start with something you can show fairly easily.  Look for something that will make your clients understand the benefit of going on.   

Do You Agree? Should We Ignore These Trends?

I've posted about Gene Marks' Business Week columns before. He writes well and he's fun to disagree with. With everybody saying mostly the same things about tech trends these days, Gene's contrarian view is refreshing. Of course he's mostly wrong with this list, but that makes it more fun. Here we have Gene Marks' Tech Trends to Ignore, with some of my commentary added. 

• Radio Frequency ID (RFID). It hasn't been easy or cheap. Many smaller companies can ignore RFID until the technology matures and comes down in price.

But how cool is it when it works? Just wave your card around. Have you been skiing lately in one of the bigger resorts that uses RFID to manage your lift ticket? Why doesn't the hotel elevator know which floor I'm on? Oh, and by the way, do you have a passport? That's got RFID in it too, at least the new ones do. And meanwhile, whether we ignore it or not, there are those hacks ...

• Virtualization. But we small businesses don't need to run Microsoft Outlook in a virtual world. We can barely get it to work right in the real world. This technology needs more time before it makes sense for small business.

And I say hooray for Windows on a Mac. It works. It's worth it. So I'm about to suggest that this is a counter example for Gene, but then -- gulp -- look at what's two points below this one on this list. So much for the Mac.

• Software as a Service. Software in this form makes sense for certain customers—among them, trusting souls comfortable letting other companies hold onto their data; honest, hard-working people who believe the Internet is completely reliable and that data will be secure and can be retrieved regardless of what happens to their provider; business owners who are O.K. paying a monthly amount per user that generally winds up being more expensive over time than purchasing a system outright. Then there are the rest of us—cynical, slothful, apathetic, and miserable. We don't trust anyone—especially with customer and financial data. For SaaS, the jury's still out. But keep an eye on it nonetheless.

I suppose, but seriously, have you seen Google Apps? Now take a look at Netbooks. And watch the numbers on how online bookkeeping is going.

Something has changed.  I remember talking to a very high-level executive at Intuit 10 years ago when they started to look at online bookkeeping. He said "the analysts want it and the journalists want it, but the customers don't." That was then, this is now. Customers want it.

Who would you rather have backing up your data: you? your bright nephew? Or Google, Intuit, or Amazon?

• Apple. We all agree that Intuit (INTU), the maker of Quickbooks, has a lot of small business customers. So why doesn't Intuit sell a multi-user version of Quickbooks for the Mac? Simple. Most small businesses, other than printers or design firms, aren't using the Mac. There's more choice in Microsoft Windows business applications. And there are fewer IT firms providing Mac support. It takes too much effort to be a rebel. So we cave and use Microsoft. But watch out. Those Apple Store geniuses are going to have their day. Every high school and college kid I know has grown up on iPods, Macs, and other Apple products that are just plain better than products made by Microsoft. And when they run their own companies in just a few short years, what do you think they'll be asking for? You won't be ignoring Apple in the future.

OK now, this is getting more fun. Gene's saying ignore Apple, but then he seems to conclude no, never mind, pay attention. My company is done ignoring Apple. We're paying attention to Mac users now.

• Anything Green. Do we not care about the environment? Yes, but not enough to waste money on this year's fire drill. If you can find a technology that helps the environment and is good for your business then go for it. And please let me know too, as I'm still trying to find it.

Now that's a real challenge. This one is so obvious that I posted A Green Challenge about it on Up And Running blog Friday. I pointed out that smart venture money and lots and lots of startups are betting on everything they can find that's green.

So with that, I say that's enough of my commentary. Here is the rest of Gene's list.

• Facebook and MySpace. Unless you're hawking Hannah Montana memorabilia, there's not going to be much of an audience for your product here. Small businesses should ignore these places for now. Want to join a great networking site with business benefits? Try Linkedin.com or Plaxo.com. 
• Open-Source Software. Sure, open-source software may be "free," but the propeller-heads you need to actually get it working, customized, and supported aren't. Spending time customizing a software product, just because it's "open source," doesn't mean that time is well spent. Business owners should stick to the boring, off-the-shelf stuff for now. 
• Windows XP. It's time to start ignoring Windows XP, too. Like it or not, the Microsoft operating system for businesses won't be sold after June 30. We are going to be forced to drink the Vista Kool-Aid. It still starts up slow. It still doesn't work with all devices. It will require a server with more memory than an elephant. But hey, now we get to see our invoices in 3D! And we'll all feel so much more secure, too, right? Whoever said that life gets more complex the older you get definitely works at Microsoft. Goodbye XP and Godspeed. We'll miss you. 
• Microsoft and Yahoo. Frankly, we really don't care about Microsoft's attempt to buy Yahoo. Let us know when it's all sorted out. Then we'll Google the story. 
• Virtual Worlds. There's been a lot of hype around virtual societies like Second Life. Some big companies are taking this stupidity seriously and buying "real estate" to advertise products. These are the same big companies that spend big money on overpriced consultants and gold-painted corporate jets. Small business owners should ignore these virtual worlds—until they find a way for a virtual guy named "Knuckles" to beat the stuffing out of a real-life delinquent customer.

Startup Culture Shock: Is Startup Life Life?

So I think somebody struck a nerve. So what do you think of this tip to save money:

Fire people who are not workaholics. Come on folks, this is startup life, it's not a game. Don't work at a startup if you're not into it. Go work at the post office or Starbucks if you want balance in your life.

That's from Mahalo founder Jason Calcanis, late last week, on his blog. He titled his post How to save money running a startup (17 really good tips). So he's the one calling his tips "really good," not me. Some of them are pretty good tips, but I think they got lost in the storm.

Responses came fast and furious. 111 comments by Sunday morning. Other blogs reacted too: one of the best of them was from 37 Signals, titled Fire the Workaholics, which concluded:

If your start-up can only succeed by being a sweatshop, your idea is simply not good enough. Go back to the drawing board and come up with something better that can be implemented by whole people, not cogs.

That one has 90 comments on it. Two posts about it -- one by Michael Arrington agreeing and another disagreeing --  have about 350 comments between them.

Jason, meanwhile, got hit hard, with some strong words. He quickly toned down the original, striking out a couple of the more quotable phrases. And, to his credit, he shows the edits too, in the post you'll find when you go there.

Fire people who are not workaholics. don't love their work... come on folks, this is startup life, it's not a game. don't work at a startup if you're not into it--go work at the post office or Starbucks if you're not into it you want balance in your life. For realz

What's going on here? I think it's culture shock; war between worlds. These are not simple disagreements. There is a whole lot of aggression and anger in the comments.

There was a joke I heard first in Mexico City. Maybe you've heard an English version, but this is a translation. It's related to all of this.

A man walks into a crowded cantina and starts shooting two six guns in the air, getting everybody's attention. He draws a line across the middle of the bar and issues an order: "I want all the fools on one side of the line and the jerks on the other."

"Wait just a minute," says one man in the crowd. "I'm no fool."

"Then move to the other side of the line."

That's what this controversy is trying to do to startups and people running startups. It's pretty much either or, if you believe the flow and direction of the comment storm: fool or a jerk.

And I don't think it's that simple. I see at least two other issues rolling around vaguely in the middle of this. And perhaps a way to bring them together.

First, how do you define success? Every so often somebody reminds us that it's an important question. But we get lost in the startup tension, or maybe that's the startup culture. I think all we have to do is ask the question, as a reminder. There are so many shades of gray between the back of plain old failure and the white of fabulous billionaire success. Some people want to have a life, and they want the people around them to have lives. And it's not like there aren't examples of startups that respected people and balance. On the other hand, there are lots of stories around. One person's obsession is another's passion. You can paint that picture how you want. Do you want to be coach the kids' soccer team or (have a very small chance to) be on the cover of magazines?

The second issue is founders with blinders. They want the whole team to share the obsession but they forget that only a few of the top founders actually stand to share the pot of gold at the end of that very-hard-to-catch rainbow. Sometimes its leadership, sometimes its selfishness. It's insisting that everybody buy into their private dream, which sometimes is shared, and sometimes not. I've seen that kind of driven-and-driving-founder at work. The younger Steve Jobs was like that at Apple during the Macintosh gestation in 1983. Philippe Kahn had a lot of that when he build Borland International in the middle 1980s. I saw it again from a comfortable distance in the late 1990s, with dot-coms and their hard-driving work-is-everything atmosphere. That reminds me of the late 1990s in Silicon Valley. Back then it happened all over. I knew a company that raised $45 million venture capital in its first year, hired more than 100 employees, nobody over 30, and brought in dinner almost every night and offered video games and ping pong in the office. The 12-hour days were the norm. The long hours, the lack of balance, the obsession is supposed to be shared by the whole team, but, in many of these cases, the supposed rewards at the end of that long trek won't be shared by the whole team.

It can be a bit like the one-size-life-fits-all syndrome, except in this case it's the one-size-no-life fits all. Does that work? It didn't for that company I knew, which (because a legal settlement so required it) shall remain nameless. It did for Apple and Borland. I don't think that works very well for very long for anybody, at least not for any extended period of time. But then again, some of the people who say that it works have a whole lot of money.

And how do we bring it together? I think it might be value. Believing in what you're doing. I've known companies, and teams within companies, that believed that what they were doing in the business mattered, to them and to the world. There's a very special feeling that you get when you walk out the door at the end of the day with the feeling that you've spent your time making the world better, not worse. Some companies are built on making things better, while others are built on getting money out of people's pockets. Some companies respect their customers, some companies bilk there companies. You know who you are. Does that make it better?

(note: I posted this originally on Small Business Trends. I'm crossposting here for readers' convenience)

Guy Kawasaki and Steve Balmer

This is a fun interview. Guy Kawasaki interviewing Steve Balmer at Mix 2008. These are two extremely smart people with a lot to talk about. It might not have any new news -- Steve has to be very careful what he says, the SEC has a lot of rules and it's really easy to get sued in his position -- but Guy doesn't pull any punches and Steve is up to it.

I'm amused by the fact that to see this video I had to download Microsoft's new Silverlight on my Mac. And it worked perfectly.

Watch Steve Ballmer and Guy Kawasaki Keynote | News | MIX Online

Watch Steve Ballmer and Guy Kawasaki Keynote

TheFunded Founder Talks

I remain very impressed with www.thefunded.com. It continues to develop as a repository of reviews and war stories related to the high end of venture capital. You can join for free, and browse through opinions about VC lenders, plus some articles, and generally useful content. I've posted on it several times on this blog previously, and today I received an email from vator.tv with this interview with founder Adeo Ressi.

Silicon Valley's Counterculture Roots

While I doubt that the zen of business planning is going to work anytime soon -- there's some undeniable paradox in trying to work being in the moment with planning -- there is something very powerful about zen that ends up adding to the allure of Presentation Zen, zen habits, and of course the original Zen and the Art of Motorcycle Maintenance, among others. More recently, there's Valley Zen, "at the intersection of zen and technology." 

	Presentation Zen by Garr Reynolds Read more about this book...
	Zen and the Art of Motorcycle Maintenance: An Inquiry Into Values by Robert M. Pirsig Read more about this book...
	From Counterculture to Cyberculture: Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism by Fred Turner Read more about this book..

I've had some email lately with Drue Kataoka of Valley Zen, for several reasons. First, I like that blog. Second, it introduced Alltop, which is good news for all. And third, I've had an ex-hippy connection to zen since I was in Haight-Ashbury in the late 1960s, which, as you might imagine, was a good decade before I became serious about business and entrepreneurship. And if there is any way to connect zen to business planning, I'd like to be the one to do it.

Drue's quick answer to the ex-hippy zen MBA connection was a quick "look at today's blog post," which I did, and with that I discovered From Counterculture to ValleyZen, which is very much aiming at that same target. Synchronicity again, I suppose.

The post is built around a new book by Stanford professor Fred Turner, and an interview he did with Valley Zen. If you don't see the YouTube video here, you can click the link above to see it on the Valley Zen site.

Deep or Wide, But Not Both

Choices. Trying to say too much. Trying to do too much with a presentation. Tradeoffs.

In The Craft of Scientific Presentations Michael Alley touches on a similar idea. In this book he suggests that you can go deep (depth) or you can go wide (scope) but it is very difficult to do both in, say, an hour lecture or conference presentation. The key, then, is to set realistic goals, and if you decide that you need to go deep then you have to seriously consider reducing the scope. Sometimes, in life as in presentations, you just have to make a choice about what's important, and let go of the rest (at least for the time being).

That's from Presentation Zen: Deep or wide? You decide. As you expect from this blog, it's put together very well.

He also has an interesting discovery near the bottom of this post:

You already know about the talks available at TED, but you may not be aware of the hundreds of presentations and speeches available for free that are part of the @Google Talks including Authors@Google, Women@Google, Candidates @Google, etc.