Ejovi Nuwere

I find business plans to be of little use to a start up. When I went around seeking advice about starting my company I received two types of responses based on the person’s background. I managed to categorize people in one of two ways. Really smart people whose intellectual accomplishments I respected and successful business people, whose entrepreneurial accomplishments I respected.

Being really smart doesn’t mean you can succeed in business and succeeding in business doesn’t mean you are really smart. The really smart people tend to talk about the need for business plans, patents, and venture capital. The successful business people tended to talk about getting the product to market, and getting customers. While it wasn’t clear across the line, smart people asked “what’s proprietary about your product and service?” entrepreneurs asked “when can I see the product?” Smart people asked “how efficient is it?” entrepreneurs asked “who is your target customer?” One group suggested potential lawyers, and business plan writers just because they wanted to help, the other group suggested potential customers and angel investors for a piece of the profit. I prefer the people that want to help based on business profit; they believe there is potential enough to introduce you to their contacts. If they help you make money they make money. That’s just good business. Smart wanted to help me because they felt I needed enlightenment.

I read a lot and so far my favorite startup reads have been Art of the Start and How to start a startup. Both of these accomplished entrepreneurs also recommended building and trying to sell your product or service first. This is the route I’ve taken.

As a result it took us one year to get the product to a point where we are now doing trials. I used consulting to fund product development. It was scary (this is an understatement) because I was never sure I would have enough from consulting to pay for the product developers and my rent, but that has become less of an issue recently. This is called organic growth. The benefit has been that I have become very focused on what works. If the idea sucked, I wouldn’t be able to pay my rent, literally. I’ve eliminated a lot of ideas and features that I thought were cool, but customers weren’t very excited about and since they are paying the bills, they win.

The alternative would have meant 6 months of fund raising (raising money takes a long time!). Then another year of 3-6 months of product development. All before I would have met a customer. Most people give up during the 6 months of fund raising when they can’t find anyone who wants to give them money. Why deal with the hassle?

Build the product, offer the service. Then when you start making money take a moment to write your business plan to make sure you are effectively executing your ideas. But that’s just my opinion.

This entry was posted on Monday, October 10th, 2005 at 4:56 pm and is filed under . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.