Tag Archives: Charlie O’Donnell

Business Planning Back in the Real World

Business Planning

Here’s a great quote:

I’ll admit that writing up a business plan may seem a little archaic after you already have a business up and running—and many businesses don’t start out with business plans. Sometimes they’re just small apps that solve a problem for a few people, and they turn into a lot more than that before anyone has a chance to write a plan down—but I think it’s a critical aspect of running a business.

That’s from Charlie O’Donnell’s post Looking at the World Through Plan-colored Glasses on his This Is Going to Be Big blog.

Here’s more food for the same kind of thought, in his final paragraph:

Writing out plans shouldn’t feel like a chore. When executed well, plans should actually save you decision making time. When new data or opportunities come in, you can quickly go back to a plan as a reference and ask yourself, “Does this fit with the plan? No? Does this inform me that my plan should be different? No? Ok, move on…” They provide a frame of reference for monitoring your progress and enabling others to do the same. They also enable you to better delegate tasks as an entrepreneur. You’ll never be able to communicate to your team exactly what to do in every situation, but with a going strategic plan in place, the people under you will have a frame of reference which will guide them to make informed decisions on the little things that a CEO shouldn’t need to worry about.

He has a nice football analogy, at least nice if you like the sports analogies. I’ve used soccer and basketball analogies for planning as dribbling, eyes up, watching the horizon, while dealing with details. Charlie talks about how a game plan doesn’t mean every play.

More important, he writes from the point of view of an investor dealing with an entrepreneur.

The root of the issue was that both sides were lacking the lens and filter of an explicitly communicated plan. It was tough for the entrepreneur to prioritize new information, problems, and opportunities without placing them in the context of an agreed upon plan… Clearly he was working hard, but was he treading water? Without demonstrable progress towards a stated goal, it was tough to tell.

That’s a good post. Well said.

(Image: KULISHVIKTORIIA/Shutterstock)

Do Investors Make Good Entrepreneurs?

Entrepreneurship, Venture Contests, ,

Interesting thought: lots of entrepreneurs end up as investors. Few investors end up as entrepreneurs. Does that surprise you? Do investors make good entrepreneurs? Hint: it’s a trick question.

This is the gist of what Charlie O’Donnell is saying in Everything I didn’t learn about startups as a VC (…or why VCs don’t make good entrepreneurs) on his blog.

He starts with this refreshing summary:

Many entrepreneurs turned VCs wind up going back, but to start out on the investment side and then successfully launch a company seems to happen much less frequently. … In fact, I don’t really know anyone who has successfully gone the other way.

For the record, I do know some counter examples to Charlie’s thesis, several people who went to VC firms as analysts after business school and ended up moving from there to startups. Usually that’s in a few steps: from VC employee, to management in a startup funded by VC, to a new startup. Charlie also recognizes “there are exceptions to everything,” but he makes a good case for a general rule. I’m not sure, myself, but it’s an interesting discussion.

So why is it a trick question?

Of the various reasons he lists, comparing and contrasting VCs and entrepreneurs, my favorite is this one:

VCs can afford to wait to make decisions most of the time—looking for a little more data, a little more traction… but entrepreneurs are on the clock. Funding is running low, competitors iterating. You often have to make decisions as an entrepreneur without the luxury of getting to wait.

And my second favorite:

VCs plan out the future of a company and what it needs—and are basically willing to support it if you continue to execute. The financing plans are largely in their court, whereas, as an entrepreneur, you deal with what you have and you always have the uncertainty of a future financing affecting your plans.

He makes several other interesting comparisons. Focus on star top management vs. focus on stars in the trenches. Focus on product management. It’s a good read, and an interesting discussion.

It’s a trick question because it’s assuming any specific career prepares anybody for some other career. Maybe, but maybe not, it depends on the case. Do managers make good entrepreneurs? Business professionals? Consultants? Accountants? For that matter, do former entrepreneurs make good entrepreneurs?

(Image: David Everson/Shutterstock)