Page 127 - 6 Secrets to Startup Success

106 6 SECRETS TO STARTUP SUCCESS

unknowable future, and locks the business into a singular path when
flexibility and agility are paramount.2

But the question of whether or not to plan represents a false
choice. If you are thinking about your venture’s future (and who isn’t?),
you are planning. Every founder anticipates future events, determines
goals and objectives, weighs options, and decides how to proceed and
what to do next—all basic planning activities. The real issue is one of
effectiveness. So, ask yourself: What kind of planning/thinking approach
will best support the current needs of my business?

MATCH YOUR PLANNING TO YOUR PHASE

Too often, planning approaches for mature organizations are unnec-
essarily applied to seed-stage businesses. The right approach for you
will vary depending on where you are in your new venture life cycle.
For this purpose, let’s look at typical planning needs at three phases
in a typical startup journey.

GESTATION/PRODUCT DEVELOPMENT – Here, you are incubating your
startup idea, developing your product or service, learning about
your market, and maybe gathering some early customer feedback.
Your goal is to build something that meets a market need, one that
customers will pay to have resolved. Your most important question
is: Do we have a concept that anyone (other than us) cares about? In this
phase, planning should focus on how to prove your concept, learn
about potential markets, set priorities, and coordinate next steps. You
can lay out a low-cost development path and identify key milestones,
but some elements of a traditional business plan, such as extensive
revenue projections, make little sense. If you don’t yet have a com-
pelling product or a workable business model, focus on developing
these, instead of guessing how much money you will make. One of
the common mistakes of early entrepreneurs, especially those in love
with their idea, is behaving as if they have launched a stable business
when, in fact, they are still in the cave of gestation.

CONSISTENT REVENUE – Once you have achieved some level of recur-
ring sales, everything changes. Early revenue doesn’t always translate

American Management Association • www.amanet.org