Momentum

The Dirty Work of Chaos

Every Monday afternoon Momentum teams gather at Grand Valley State University’s Center for Entrepreneurship & Innovation to discuss the relevance of Guy Kawasaki’s book The Art of the Start and meet with area start up gurus. Momentum’s Art of the Start discussions are facilitated by Mike Morin, Momentum Team Director and SVP at MediaGuide .

The Dirty Work of Chaos

Four weeks into Momentum and our teams are in deep; deep into financial models, business plans, pitching techniques and, well . . . chaos. They aren’t alone. Every start-up faces the C word. Those that make it beyond this chaotic period are better for it. Navigating the chaos is a formative process for entrepreneurs and their ventures. It facilitates refinement, simplicity, and many times, success. On the other hand, this early chaos may be that last nail in the coffin; maybe that business really isn’t viable after all. Either way, meeting the chaos head on is imperative.

Tips for Start-Ups

The Pitch
Hit the benefits right away in your pitch – “Hi, I saved my customers 80,000 dollars.” who wouldn’t want to hear more?

Always make sure people know what problem you are going to solve for them.

Make sure to cut the jargon in your pitch. No insider terminology.

Use the sixth grader trick to simplify your pitch. Pitch to a child and let them tell you what your business is about.

Think about the game of telephone you played when you were young. Keep your pitch simple and clean so it won’t wind up like the game.

Pitch again and again.

Whenever you pitch to someone who is interested, they’ll probably have lots of suggestions to make your business better. You have to know what you will not be and what you will not do. Otherwise everything is open. It isn’t difficult to find opportunities, there are millions of them. Focus on one or two that work for you, and do your best to not be distracted by those other opportunities as you start up.

The Plan
So here’s the thing about business plans – they probably aren’t going to get read. Interested parties may take a look at your executive summary and financial projections, but they know that most of the content in a business plan is bull. They are chock full of assumptions. People who are significantly interested may scan your plan to see if your assumptions are legitimate. Of course the exception to this rule is pre seed funding – if you are up for pre seed monies your plan will be read, probably with a fine tooth comb.

Often times the business plan itself is not very useful, but the process of writing the plan can be vital.

Use the same voice – keep it consistent. Make sure your pitch, pitch deck and business plan all carry the same tone. Try not to have more than one person author the business plan. It is very difficult to read through a plan that has been written in multiple voices.

Everyone knows you’re going to learn as you go and that things change fast, but you can’t get funding based on that. At some point you have to say, for better or worse this is what we plan on doing and how we plan to get there.

You have to drive a stake into the ground and test a specific hypothesis with your business plan. It should lay out what your business is about, and be tightly tied to your business model.

Flesh out your business plan with the specifics you have. Always make sure that the assumptions you base your plan on can be reasonably established.

Know this – you won’t change anyone’s mind with your plan. If they aren’t interested in your pitch, don’t bother giving them your plan.