A couple of weeks ago, I was asked to help judge the Governor's Cup Business Plan competition. I spent a couple of days last week getting it done. It was an interesting exercise, with widely divergent results. Some plans are better than others.
In my daily work I see plans being carried out, and more significantly, LOTS of action without benefit of much planning at all. Often business happens organically. The plan follows.
A good example is the guy who writes some code, needing it for a business process. Someone else sees it and wants a copy. And another. And another, leading to it becoming a successful software suite.
Or someone who lashes up a unique computer solution for a customer, which then goes on to become not only a new hardware product, but a whole new profitable company. It happens. So, do the best companies come from plans? Or are they simply people responding to need?
It's a bit of both. I've written about starting Sage Computer, which had little planning. It's genesis was about the product and the people.
Plan or not, here are my six "P"s on what makes a good business...
Passion - This can be stated in lots of ways - conviction, drive or perseverance. But it seems to be critical for action to occur. There are literally thousands of good ideas. And every good idea has a thousand people thinking it, all at about the same time. To paraphrase Heinlein, "When it's time to railroad, there will be railroads". The real question is, who drives the first spike? The person with the passion. That's who.
Product - This is almost as important as a bias to action. The product (or service) has to be more than a "little" better. It has to be TWO to TEN times better! That's not always easy. Benchmark your prototype. Is it REALLY worth doing?
People - None of the above happens without the right people. That obviously starts with a leader - and his vision. The rest are almost as critical. Do what you need to get the right team.
Plan - Even if a good idea sneaks up on you, an actual plan at some point WILL help. It can be the key to getting your point across. Even a great vision needs a map.
Principle - The plan will tell you how much capital you'll need. But have a care. I believe more businesses fail from TOO MUCH capital, than not enough. Stay lean. It keeps everyone on the right side of the power curve and motivated.
Production - Don't wait. Get to production as quickly as possible, even as just a test. You'll learn in the process. Take a page from military doctrine - TAKE THE HILL! If you took the wrong one, but took it fast, you'll have time to take the right one. Just like that first spike - do it NOW!
Speaking of great business plans and awards, this is a good time to congratulate a couple of my friends for honorable mention at Reno Gazette-Journal's 2008 Entrepreneur of the Year awards...
Darren McBride - Highly Reliable Systems
Bruce Robertson - Great Basin Internet Services
Nice work guys!
... seeking simple answers to complex problems, and in the process, disrupting the status quo in technology, art and neuroscience.