I don’t agree with everything Guy says here but I really like his being comfortable with his own opinions, and how he presents them as opinions, not fact. This is a really good one for startup founders and in a classroom situation, for teachers of entrepreneurship to share with students.
(If for any reason you don’t see the video here, click here for the source on YouTube.)
So you want to start a business, but don’t know what kind? Sure, you can get a list of franchises or ask the experts what are good businesses to start. That works for some people. Lists of businesses to start are easy to find. My advice, however, is don’t look for a list of good businesses. Don’t ask what the big opportunities are. Get a clue. Go look in the mirror. And as you look in that mirror, ask yourself these questions:
What do I like to do? How am I different? What is there about me that sets me apart? What excites me? What am I good at?
What do I like to do that other people (or companies) want to have done? What do I like to do that people will pay for? What do I like to do that I do better or differently from others who do it?
What value can I add? What’s missing? How can I do something better than what’s now available? What can I see about the future that others can’t see?
Where can I give value that isn’t there right now?
I’m down on lists because I don’t see the startup process as beginning with some idea that’s on a list, followed by research and putting together a team and developing a plan and starting a business. Instead, I see most good businesses starting with something that the founders believe in, something that they think ought to be done or ought to exist, something that excites them or intrigues them, all of that followed by planning and building a business to make it happen.
Here’s how it goes: you develop the original business plan to establish that your idea is an opportunity. Ideas are a dime a dozen, commonplace, and without any essential value. Opportunities are a subset of ideas. The planning process separates the opportunities from the ideas.
The heart of the business is that trio of identity, market, and focus. A lot of that is about you and what you want to do and what you can do better. And if building the business, I hope you fall in love with the business first. I hope you recognize the need and see how you can fill it. And, I hope you like the vision, know that you want to do it, and discover that you’re excited by it.
Do something you want to do and believe in. That restaurant you’ve always dreamed of, or skiing equipment, or a newsletter … success isn’t based on the idea, it is based on how hard you work at it, how much value you deliver. When somebody close to me wanted to start a graphic arts business, I didn’t say ‘no, don’t, there are a million of them.’ Instead, I said their success would depend on getting customers, providing value, and, in short, working hard.
In the Art of the Start, Guy Kawasaki offers a list of ways to generate new business ideas. If nothing else, read his first chapter. Just click, you can do that now; or later, if you want to keep reading me. Guy talks about getting going, about ideas being generated by impulses like “I want one” and “I can do this better” or “my employer wouldn’t (or couldn’t) do this.” There too, it doesn’t come out of the blue, it starts with you.
In Growing a Business, Paul Hawken shows how a business grows naturally out of the owners and founders doing something they want to do, filling a need they believe should be filled. I recommend it.
To be fair, there are exceptions. Franchise businesses, for example, when they work, are a business formula you pay for and implement, guided and taken by the hand every step of the way. Being a McDonald’s franchisee means you’re a millionaire, it doesn’t mean you like eating or preparing what McDonald’s restaurants serve. You buy a business to run. They tell you how to run it. If it isn’t a set formula and if they don’t give you all you need to know, then it’s a bad deal.
Thanks for asking.
(Note: I posted this on Up and Running several years ago. It’s as valid now as it ever was.)
It’s an obvious question. And if you’re looking for startup investors you’d better be able to answer it well, and quickly too. No wandering eyes. No doubt. If you’re doing a pitch, have a slide for it. And be specific.
I liked this from Ben Yoskovitz’s Instigator Blog on Use of Funds:
…most descriptions of “use of funds” are incredibly generic and standard, typically involving the following: hire key personnel, product development, sales & marketing. Hhhm…the phrase, “No shit Sherlock…” comes to mind.
And on the other hand, there’s this about that, from Perfecting Your Pitch, by Guy Kawasaki’s Garage.com Ventures:
It should be clear from your financials what your capital requirements will be. On this slide you should outline how you plan to take in funding—how big each round will be, and the timing of each—and map the funding against your key near-term and medium-term milestones. You should also include your key achievements to date. These milestones should tie to the key metrics in your financial projections, and they should provide a clear, crisp picture of your product introduction and market expansion roadmap. In essence, this is your operating plan for the funds you are raising. Do not spend time presenting a “use of funds” table. Investors want to see measures of accomplishment, not measures of activity.
So go figure. There are two opposite points of view from two good sources.
I’m amazed, meanwhile, how often I see people pitch startups to investors without having a good answer to that question. I expect an instant answer, without hesitation, and if it’s a slide deck there should be a slide.
And that doesn’t mean that anybody necessarily believes what you say. It’s all educated guessing. But details add credibility. And if you can’t answer that question, what do you think your audience is thinking?
Make a list of the stuff you need to purchase before you start. Include expenses like early salaries, cleaning up the location, developing the website, packaging if relevant, prototypes … it’s a collection of educated guesses, of course. It’s just guessing, but how can you not do it?
Do your projected first year cash flow. Estimate sales, costs, expenses, and payment lags from business customers, your own lags paying your vendors, plus what you need in inventory. If this isn’t a cash deficit, recalculate. In real startups it almost always is.
Add those startup costs with the deficit spending, and that’s what you need from investors.
Reality check: if that calculated amount is way too much, investors will laugh at you, go back and change your plan. Spend less. Look for the startup sweet spot.
Triple reality check: if you’ve got a high-end high-tech startup, looking for serious angel or VC investors, give them a break and show spending the money on things that make for growth, excitement, virality, sizzle. If you don’t know what that is, rethink your plan.
Stories are not just stories; they’re experience repackaged. They can tell a lot more than just a story. If you own a business, or ever want to, you should be able to tell each of these stories well. If you can, you’ve already nailed the essence of long-term strategy. If you can’t, then here’s a good way to rethink your business.
You want to be able to tell these stories because they’ll help you understand, focus, and manage your business better.
1. The Story of The Buying Event
Tell the story of an imagined best-possible customer wanting or needing something, finding your business, and buying from you. Try to describe that person (or company) in detail. Be able to describe the process in glorious detail. What did she want? What did he need? What led her to your business? What was he looking for? What problem did she have? How did he find your business, and what made him decide to buy? What were the important decision factors?
2. The Story of Why We Exist
Be able to tell a simple story about how your business makes some people better off. Guy Kawasaki talks about making meaning, making the world better. And that’s not just the social enterprises or non-profits, that’s the shoe repair business on the corner, the marketing consultant, graphic artist, and the hot dog stand that appears before noon. Every successful business does something for somebody, or it doesn’t last. And that’s a story you should tell yourself. What difference does your business make to the world?
3. The Story of Our Future
We used to call this the vision statement in the old-fashioned formal business plan. I don’t care whether it’s part of a document or not, but it’s a good concept to keep. Imagine your business three to five years from now. What does it look like then? What is it doing differently, then, that it doesn’t do now? How has it changed? Is it in a different location? What new things is it selling, and to whom? How has its meaning changed?
If you can tell these three stories, you’ve got a business strategy.
Some cranky folkloric baseball manager from decades ago was asked why he was such an SOB. He answered: “Nice people finish last.” In Enchantment, however, Guy Kawasaki tells us how and why nice people finish first.
Don’t misunderstand the word enchantment. It’s not magic. There’s no Pied Piper. Guy’s enchantment is good common sense and logic, not magic. This book is a lot like a how-to guide to applying a Guy-Kawasaki-nice-person strategy to achieve personal and business success.
The first few chapters are about you as an individual — how to be liked and trusted. These chapters — Guy’s advice on handshakes, dressing, and even smiling — read a lot like a good father giving advice to grownup children, or as mentor to protege, except a lot more thorough and much better organized. You can feel him wanting to share, give, and help. This is what has worked for me, he’s saying, let me help you.
Moving on from the mostly personal, Guy goes effortlessly on into small business and products, launches, and marketing. He talks about how to be a boss, and, how to enchant a boss. He talks about long-term corporate culture. His last chapter is about how to resist enchantment turned bad, which is common-sense advice to keep you from being one of the rats in the Pied Piper story.
Given the general topic description, you’ll be pleasantly surprised at well Guy brings out concrete specific advice, useful and relevant stories, and even checklists. This book is very practical.
Before I was done, I ordered five copies of this book to share. Sure, much of what he covers is relatively intuitive “nice person” stuff. But he does it in a delightfully thorough and organized way.
Here are some of my favorite quotes, taken in random order:
In ten years of listening to entrepreneurs’ pitches, I’ve never heard one that was too short.
A word to women regarding swearing … My advice is that you heed the rules that I provided above, and let it rip, because the best way to destroy a double standard is to defy it.
This is how premortems work. The team assembles during the launch phase. The team leader asks everyone to assume the project failed and to come up with the reasons why the failure occurred.
Why do people create messages that are not short, simple, and swallowable? Two reasons: first, a committee got involved and group-groped the result. Second, people got overenthusiastic about the wonderfulness of their cause and lost touch with reality.
[on stories as part of a launch strategy] ‘Epic’ is not always necessary. ‘Illustrative’ is enough — for example, personal stories like ‘my father owned a Cadillac, and he drove it 150,000 miles without major problems’ are more effective than ‘this caddy will last a long time.’
Enchanters don’t sell products, services, or companies. Enchanters sell their dreams for a better future.
Push technology brings your story to people. Pull technology brings people to your story.
I hope you get the idea, with just a few quotes, of how the book goes in and out of detail, and stays practical. It’s organized well, it’s full of stories, it’s got enough logic to headers and flow that it’s hard to put down and you’re done before you know it. I read it cover-to-cover on a one-hour plane trip.
Finally, I have to say, I’ve dealt with Guy Kawasaki off and on for about 25 years now. He’s not someone I know well and I’m not somebody he’d consider close. He’s done me favors — he wrote the forward to my last book — and I’ve done him some (my company bundled his book with our product). But that’s typical Guy Kawasaki; that’s him being the person he suggests we all should be. He’s authentic. By that I mean that I can also tell you he is, just as the book is, just as his secret to success is, impossible not to like. While some of what Guy says might sound phony if taken completely out of context, he is completely authentic and so is his book. Guy is preaching what he practices. And, following his own advice, being a mensch, he wants to help you figure it out. And, since he is a gifted communicator, story teller, and simplifier, the book is one of those that I want people I know to read.
I was happy to see Guy Kawasaki’s The Key to Attracting Investors yesterday morning on Amex OPEN Forum. I do know that Guy understands business planning and its place in management (he interviewed me about it in this post, for example). But he also scoffs at the misuse of business plans and the cult of the business plan document. He’s right about that too, but people don’t always understand it’s the misuse and the cult that causes the problem, not the planning. Here’s his key quote in yesterday’s piece:
You should not focus on a business plan, but this doesn’t mean you shouldn’t do business planning.
Yes. And he goes on:
Planning you need to do; that is, think about what your customers need (maybe they can’t even articulate it—that’s when the vision thing comes in), how you can serve these needs, what kind of people you want to hire, and how to finish your product and get it to market.
One of the most valuable outcomes of business planning is getting your team on the same page. You’d be amazed at how founders differ on what’s really happening and what’s really important.
And finally, the reminder: It’s about the business, and the business planning, not the plan document:
Just so you don’t make yourself crazy trying to create the War and Peace of business plans, these are the sections that you need: Executive Summary, Problem, Solution, Business Model, Underlying Magic, Marketing and Sales, Competition, Team, Projections, Status and Timeline, and Conclusion. All of this should add up to less than twenty pages.
I admit it. I got really jealous of all the Zen of this and Zen of that writing, dating all the way back to the book Zen and the Art of Motorcycle Maintenance, which I wanted to like, tried to like, but couldn’t. Yes, I gave into the horrible temptation, and even posted Zen and Business Planning here. I’m sorry. It was a moment of weakness.
Yes, I’m conflicted. Here I am after 30+ years of professional business planning fascinated by Gil Fronsdal and friends on Zencast, trying hard to reconcile Zen and business planning, and failing. Putting Zen and business planning into the same post is kind of like putting a dog and a raccoon into the same laundry bag.
Confession: my vanity license plate reads “not Zen.” If I could add a subtitle, it would be “… but trying.” After all, if I really were Zen, I wouldn’t put it on a vanity license plate. Right?
So you can only imagine my envy when Guy Kawasaki manages to bundle Zen of PowerPoint, Facebook, and Twitter, all at once, in a single post on the American Express OPEN Forum. Complete with 10 Japanese Zen concepts, each of them in Japanese, and each connected to the points he makes. And then 10 more, which is really showing off. Damn, he’s good! He writes:
I love this kind of stuff: not only can these principles improve your PowerPoint pitches, products, website, and outlook on life, but they make people think you’re smart when you mention them.
Amen to that. Or something more Zen than Amen.
(Image: well, at least I get a point for that one. I took that picture in a Zen temple in Kyoto.)
Last night I was halfway through a draft post patting myself on the back, illustrated with champagne glasses, when my youngest daughter, Megan, called from San Francisco, where she lives now. That’s @MeganBerry to you, blogger and social media expert, marketing manager of Klout.com. So I asked her this: “What do I do with my 1,000th post?”
“Do something that matters,” Megan answered. “Do something special.” She talked about favorites, lessons, advice, and reflections.
So, about 12 hours later, this is it, number 1,000. Gulp.
I started in 2006, but did only a dozen posts in the first year. I really started in April 2007, with reflections on family business, a personal note about passing the torch to a second generation. I changed jobs then – my choice – from owner-entrepreneur-president to blogger president of Palo Alto Software.
My personal favorite posts are on the sidebar here to the right. My favorite search is the one for fundamentals, particularly the series of 5 posts on planning fundamentals. My favorite categories come straight from the blog title: planning, startups, and stories: that’s specifically the categories planning fundamentals, true stories, and starting a business. And I also really like advice, reflections, and business mistakes. But I like most of my posts here. You kind of have to, to keep doing it.
Here are 10 blogging lessons I’ve learned:
Imitation isn’t just flattery, it’s learning. When I said I wasn’t a blogger, Sabrina Parsons said “you will be. Just start reading blogs.” So I did. And I imitate a lot of other bloggers I like to read. So many that I can’t name them all here; but my thanks to Guy, John, Pam, Anita, Ann, Steve, Seth, Matthew, Ramon, and so many others. Every blog on my blogroll here to the right.
Titles make a huge difference. That’s not just blogging. It’s been true for a long time. My son Paul, CTO at Huffington Post, teamed up with his younger sister Megan to teach me titles. And Ironically, what they taught me was a lot of what I learned at UPI plus the power of questions, and lists of 5 and 10.
Short and simple: short sentences, short posts. Short thoughts? I like one-word sentences, and one-sentence paragraphs. And short posts, in theory: despite how much I admire Seth Godin’s short posts, I try, and usually fail.
Break grammar rules. Carefully. Rarely. Like right here. There’s no verb in either of the previous two sentences, so this post would have gotten me an F in Brother Salvatore’s 12th grade English class. 30-some years later, I’m glad he gave me that F on a 10-page paper for using “it’s” instead of “its” once. That lesson was worth it. But jeez!
Pictures add meaning. Thanks to John Jantsch for that one. And to Shutterstock for supplying me with the bulk of the pictures I’ve used on this blog for the last year. And don’t ask me to explain the illustration on this one. I didn’t want champagne glasses or cakes and candles.
Write Often, and keep writing. Find your pace. Honor consistency. Once a month doesn’t feel like a blog, but three good posts weekly is better than two good and three not so good. Break your routine occasionally for mental health. I write a lot and like it. I’ve done 1,000 posts here in three years. Plus 700 on Up and Running, and another 200 or so on Small Business Trends, Huffington Post, Amex Open, Industry Word, and Planning Demystified. Plus some guest posts on others. It’s easier to maintain momentum than overcome inertia.
Love the comments. Thank you. Not you spammers. But even you critics with annoying comments. Especially you critics with smart well written disagreements. Not the dumb generic praise intended only for your own SEO benefit, which I delete. But I love the comments, they make it live.
Love Twitter. Twitter has done wonders for my blogging, my daily work flow, and my growing satisfaction with web 2.0 or social media or whatever you call it. If you don’t get twitter, it’s not clutter, it’s not what they had for lunch, it’s blog posts and links and what’s going on in the world, as shared by people you like, now. My 18-point Twitter Primer feels as valid today as when I posted it.
Tell the damn truth. You can’t fake it for long. Keeping track of all your various personae is exhausting. Write as yourself, or maybe (just maybe) who you really want to be. I know this is a lame old quote, but I heard it first from Chris Guilleabeau and I like it: “I have to be myself. All the other people are already taken.”
Tell don’t sell. Lots of us blog for business. Much as I sincerely love the books and software I’ve done, I don’t blog about them here. Sure, the sidebar sells, I hope, but my posts don’t.
Here’s advice, in honor of this being post number 1,000:
Anything anybody can believe is an image of truth (paraphrasing William Blake).
Time is the scarcest resource. Time, not money.
Your relationships with the people you love are WAY more important than proving that you were right.
What happens if you make light of your achievements, shun the spotlight, and pass the microphone on to the next person in line? Will this stunt your career growth?
I’ve worried about this for years. I used to deal with a guy who did very well as a professional expert, while knowing not much more than what he’d read the in a trade journal or two the night before a presentation. That never bothered him. And he did very well. And it kind of bothered me.
And then we have the new world order of personal branding, led by experts like Dan Schawbel, Jonathan Fields, Pam Slim, Guy Kawasaki, Seth Godin, John Jantsch, and many others. Dan is the leading expert as defined by Google. Those others are great personal brands, acknowledged experts. What does personal branding say about humility? Can you get there with humility? (hint: some do, some don’t.)
I’d like to think that the world rewards people who let others tell their achievements. But does it? Can someone who doesn’t love the spotlight be a leader? A leader is defined by followers. What if you never take credit and stick in the background? Will your would-be followers ever find you? Will they give you credit?
A sense of humility is essential to leadership because it authenticates a person’s humanity. We humans are frail creatures; we have our faults. Recognizing what we do well, as well as what we do not do so well, is vital to self-awareness and paramount to humility.
He goes on, in that post, to list ways to demonstrate humility in the workplace. Temper authority, look to promote others, acknowledge what others do.
And yet, much as I like this idea, I think it has to be tempered with reality. People are busy. People need to be told what they think. If you don’t take credit, somebody else will. Baldoni says:
Can you be too humble in the workplace? Yes. If you fail to put yourself, or more importantly your ideas, forward, you will be overlooked. Chances for promotion will evaporate, but worse you will not give anyone a reason to believe in you. All of us need not lead others, but those who do seek to influence, to change, to guide, and to lead their organizations, need to find ways to get noticed. Again humility comes to the rescue. That is, if you celebrate team first, self second, people will notice what you and your team have achieved.
Damn: paradox. Lack of a general rule. All of it case by case. And maybe, just maybe, there’s a conclusion there about doing the right things in moderation. What do you think?