Blunt on Business

Jan

3 Reasons Why Business Plans Fail

mistakes, start-ups

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I’ve helped several people put together business plans. The business plan I put together for my comedy club was used as a sample form in a book on business plans. Theoretically, I know something about business plans. I’ve seen some bad ones. The worst ones I’ve seen tend to be bad for one of these reasons.

3 Reasons Why Business Plans Fail

1. Filling in the Blank

There are plenty of software packages and business plan templates out there on the tubes of the Internet. While they can give you bit of structure when you’re completely lost and on your own – they can also have you focusing on issues which make little sense if any. A business plan that’s intended for venture capitalists or other serious investors needs to have an exit strategy – a plan for cashing out the investors. If you’re putting together a business plan for a small business or some business that you want to build and grow – you don’t need an exit strategy. Your exit strategy is filing for bankruptcy and moving back to your parent’s basement. Don’t fill in the blanks if you don’t understand the blanks.

2. Failure to you know, plan

Want to create a bad business plan – don’t use it to detail what you’ll actually do, use it to provide a 10,000 foot view of something you need to have microscopic insight into. This tends to be compounded by the fill-in-the-blank approach, where a business has a ‘marketing plan’ consisting of ‘generating great word of mouth, building the brand and engaging in social media.’ I’m reminded of a stand-up comic who asked an audience member what he did for a living. The guy in the audience said “Nothing” to which the comedian replied “Then how do you know when you’re done?” If your plan is that vague, how do you know when you’re doing it?

3. A Plan for World Domination

Not every business is going to be successful. And yet every bad business plan seems to not only promise success, but promises the kind of success that results in each investor ending up with enough money to buy their own island and flood it with enough filthy lucre to sink the damned thing. Project a reasonable growth arc and realize you’re not going to turn a web design company into the second coming of the Roman empire.

Avoid these common mistakes and keep your business plan alive.

3.5 Tips for Being an Effective Coach (hint: be an asshole)

general

One of the things I’m trying to accomplish with this blog (and with my life at this point) is improving the way in which entrepreneurs are trained. One of the core elements of entrepreneurial training is coaching. I’ve had a fair amount of experience with coaching in different contexts. I’ve coached improv teams (at IO and the Playground in Chicago), and different entrepreneurs starting businesses (Go Comedy, and various entrepreneurs at Bizdom U), and I’ve picked up some tips from some great coaches. So here are some tips for coaching people. BTW, these tips can apply in almost any context where you’re helping someone. If you’re working with someone to help them – then essentially you’re coaching them.

Sympathy for the Devil

Before launching into it, a few words on Mike Leach. Unless you follow college football (and if you don’t you’re a communist), you may not know this, but Mike Leach was the Head Coach at Texas Tech. Generally praised for innovative pass-oriented schemes, he was somewhat of a maverick among coaches. He recently got fired for mistreating a player. I’m not here to defend his tactics (although I’ve dealt with my fair share of people whom I thought were faking it when they claimed they couldn’t do something). Rather I bring it up to simply say that coaching is a tricky business. When your mission is to maximize someone’s potential, you often find yourself doing weird things that you barely understand, much less trying to justify what you’ve done in the court of public opinion. In other words, being a coach, I feel your pain Bobby Knight and Mike Leach. Also, your mileage may vary. These tips have worked for me and helped me. They may strike you as a bit nuts. But listen to a Knute Rockne speech. Coaches are nuts.

3.5 Guideposts for being an effective coach

1. It’s Not About You

It’s very important to focus on your goal as a coach – to maximize the potential of your players/coachees. It’s not about buffing up your glory, making you feel good, validating your worth, etc. It’s about them. Be willing to do anything to achieve your goal – even if it deflates your ego, takes you down a notch or look like an idiot. You also need to be willing to be thought of as an asshole – and play the part of asshole when necessary. Some people are motivated when pushed. Some people are motivated to prove somebody wrong. You may need to be an asshole to motivate these type of people. Be willing to be hated, despised, and the object of scorn. Everyone loves success – and if you can help people achieve success, it won’t matter whether they love, like or respect you. Your job is to put them in the best position to win. Do that because nothing else matters. If you need unconditional love get a dog, don’t look to your players.

1B. Don’t cross the streams

Don’t become friends with your coachees. It’s okay to like them, and when you’re no longer in the coach/coachee relationship, you can be their buddy. That doesn’t mean you can’t be friendly with them. But don’t forget the essence of the relationship.

2. The first pulse you take is your own

While you may occasionally need to take on the demeanor of an asshole or screaming lunatic, internally you’ve got to keep your pulse in check. This is along the lines of not hitting your kids in anger (really – never hit your kids – but you get what I’m saying). It’s okay to be angry, frustrated and even incensed to the point of blinding rage – but you always need to make sure the choices your making in your coaching behavior are coming from a space of maximizing performance – not venting your spleen. If you need to vent your spleen, kick the dog you bought back in tip #1.

3. Know your role, and shut your mouth

Your role is to maximize performance. By focusing on that, and remembering that, you’ll realize that you needn’t coach everything that’s coachable. I see rookie coaches absolutely destroy people’s motivation by criticizing everything that can be criticized in a performance, game or business plan. If you call out every single thing that needs improvement, you’re not coaching, you’re showing off how knowledgable you are, and how observant you can be. That makes it an ego driven process – and – tip #1 – it’s not about you. You’ve got to say and do just enough to motivate maximum performance, then shut the fuck up.

Got any good coaching tips or experience with coaches you’d like to share? That’s what the comments are for friend!

Three Questions Entrepreneurs Need to Ask on Day One

entrepreneurship, start-ups, tips

Mark Kramer of Kramer Communications has a great article on Forbes, The 10 Questions You Should Never Stop Asking. In the article, Mark (we’re not really on a first name basis) details some of his experiences acting as an Interim CEO of a couple of magazines in Philadelphia. It’s a really great article, and all of his questions are dead on. The implicit assumption of his article is that people started asking these questions at some point, and then stopped. In my work with and study of small startups, it seems these questions don’t get asked initially. If they did the business may never have started, or certainly would have started smarter with a better chance of succeeding.

The questions he brings up cut to the core matters I address at Bizdom U, (as well as in my saucy presentation at TEDx).

The Three Questions You Should Start Asking

Kramer’s first three questions (I’m rephrasing slightly) are:

What is your purpose for existing?
Who is your target customer?
Why does anyone need what you’re selling?

I’m going to take these one at a time.

What is your purpose for existing?

First-time startup entrepreneurs often confuse their business’s purpose in existing with what the entrepreneur hopes to gain from the business. To use a technical term, this is a Big Ass Mistake. Your business’s purpose is most assuredly to help customers satisfy a need – not to bring you personal, spiritual, or emotional fulfillment. If you think that’s why YOUR BUSINESS exists, you’re mistaking your purpose in life (fulfillment) with your business’s purpose (satisfying customers). Confuse this at your own peril. If you keep this straight, you’ll keep your business focused on the customer and helping the customer.

Who is your target customer?

You can’t help people, or more appropriately satisfy customers, if you don’t know who they are and what their needs are. It’s a struggle, but you’ve got to disavow yourself of the notion that your business will appeal to everybody (or some equally ridiculously large subset of everybody). It can’t, it won’t, and it shouldn’t. It will appeal to certain people with common demographics or psychographics and those are the people you need to have in mind and help.

Why does anyone need what you’re selling?

Get out, talk to customers. In person. Face to face. It’s uncomfortable in the digital age, but it will give you deep insight into what clients really want and how to best give it to them. Mark nails it when he says “I have rarely seen a company fail if management literally spoke to customers and gave them what they want.”

A bonus word to educators, consultants, incubators, etc.

If you’re in the position where you’re advising someone on starting up a business, make sure you’re encouraging your advisees to ask these questions. Push them on these questions. Hard. Really hard. The kind of hard that leaves a bruise. That hard. We do no service to people if, in the interest of protecting their feelings, we are not blunt, direct and honest in questioning whether they’ve plumbed the depths of these questions and come up with honest answers. In my opinion, this is the great failing of entrepreneurial education, consultation, advising and incubation: the unwillingness to give honest feedback to someone and tell them their idea (as currently formulated and researched) is most assuredly crap. In the interest of being kind, and not ‘crushing someone’s dream’ we let them blindly soldier forward to their doom. If I see someone running headlong toward the edge of a building, I’m not going to encourage them. I’m not going to try and support them in their dream of flying. I’m going to yell “Hey, asshole, you can’t fly!” We all need to be willing to be that direct and blunt.

Blunt on Business