Leadership, Pivots, and Investor Readiness

After careful research of Steve Blank, the first lesson that I intend to implement is getting out of the office and listening to the actual customers.  Researching and asking the necessary questions to test my hypothesis will be key to a successful business model.  Although I have completed several pieces of the business plan, now I must test my numbers and go through a series of levels to ensure that I am investor ready.  Steve Blank gives us a demonstration to test one on their investor readiness. 

                                                          

I firmly believe that if a person can demonstrate their capabilities on the metrics that truly work for your business model, investors will bite.  Having a sizable market that demonstrates growth and opportunity is also important.  Investors are going to be looking at how and when they are able to get their money back at a rate that compensable to your growth. 

Steve Blank also discusses how to be smarter than your average investor in one of his blogs in which is done through continuous customer discovery.  We really should be in tune with customer needs, listen, and apply the knowledge.  By demonstrating our insight about the market, and even when the market shifts, it gives us the competitive advantage.

 

Lastly, Steve mentioned the value of pivoting.  When analyzing the top ten companies in the United States, all of them have pivoted at one point to provide customers with the best product and/or service.  Pivoting is one of the key terms Steve Blank uses when determining how to adjust to the customer.  I think the business plan is a great concept, and it gives you your goals in writing.  But what I also believe, is that the business plan for me, will be revised regularly to fit all my necessary pivots in the market.  Being on top of government regulation, and the newest technology in ones field will help to know what’s to come and make adjustments throughout ones business.  Sometimes it takes awhile to get a large company of capacity to get everyone smoothly operating in a different direction.  As a new business owner, I want to be the leader. 

Successful Business Planning

Steve Blank is a well-known serial entrepreneur whom started seven companies, of which 5 went public, two were bought, and one failed.  These statistics are really good.  Steve states that the typical business plans that are required to be written in school as well as for the real world suffer.  Blank (2013) states “A business plan is typically a research exercise written in isolation at a desk before the entrepreneur has even begun to build a product”.  Steve has developed the “lean start-up” strategy that has started to make waves over the past several years.  His theory is that is relevant to get out of the office and ask the customers what they want.  With new information in hand, this allows the entrepreneur to pivot the business model and give the customers exactly what it is they are asking for.   On Steve Blanks website, he discusses his lean launch pad curriculum that many graduates and entrepreneurs have used to build their company. 

            Steve’s business model canvas allows the entrepreneur to build on his or her assumptions, and then tests hypotheses with real customers and in real time.  Lastly, Steve also discourages “business plan competitions” that are held at lucrative schools such as Harvard and Yale University.  MIT is known to have the largest business plan competition in the world.  “Over $350K in prizes are given to aspiring entrepreneurs each year through participation in a series of three contests: the Pitch Contest, the Accelerate Contest, and the Launch Contest.”(MIT, 2014). In a recent article, Blank (2013) states business plans such as this are “Little of it is relevant to the chaos and uncertainty in the life of a startup”.  Although Blank has a lot to say about business plans are the negative aspects of it, he doe not go without offering a solution.  His suggestions are to allow for “Business Model Competitions”.  These measure how well students pivot by getting outside the building and moving according to the changes of time. 

            Another successful and well-known entrepreneur is Tim Berry.  Tim is the “Founder and chairman of Palo Alto Software; entrepreneur, business planner, baby boomer, blogger as well as Co-founder of Eugene Social”(Berry, 2014).  Lastly, he is the business planning coach on Entrprenuer.com.  When it comes to business planning, this man is at the top of the list.  He “Prefers an interactive job, working with you, to develop realistic and credible business planning projections including sales, cost of sales, expenses, profit or loss, balance sheet, and — by far the most important — cash flow projections”(Berry, 2014).  It appears he places a lot of focus on the financials and developing real close projections.  Even with the best projections, if one is not in tune to the customers, a company may not turn out to be a success.

            In my opinion, learning as much from these experts as possible will help guide an entrepreneur through the maze of the business plan.  I seem to lean more towards Steve Blank theories.  He gets to the root of every successful business, and that is giving the customers what they want and pivoting as necessary when new knowledge is brought to attention.  

References

https://archive.harvardbusiness.org/cla/web/pl/product.seam?c=29512&i=29514&cs=72931baa3b05f76aca8090b33db139b0

http://steveblank.com

http://steveblank.com/2010/05/17/no-one-wins-in-business-plan-competitions/

http://www.mit100k.org

http://timberry.com

http://timberry.com/businessplanning