Login

Dave Lavinsky's newest article in NY Report.

Read Full Article here:

http://www.nyreport.com/leadership/articles/83707/plan_backward_to_get_bigger

Plan Backward to Get Bigger


 

Why the best business plans start at the end
By: Dave Lavinsky
January 2, 2013
 As Yogi Berra once said, “If you don’t know where you’re going, you probably won’t get there.” This is very much true in business. In order to achieve your vision, you need a game plan, also known as your business plan.

The key to creating a plan that works is to start at the end. That is, start by figuring out your vision of the business you want to create. Once you know what you want your business to become, it’s possible to reverse-engineer your success by identifying what your success looks like, and creating a plan to reach it. I call this process reverse business planning.


Vision in Focus 

The vision is different for every firm. Take the example of a 3-person accounting firm that has no interest in becoming a 1,000-person firm because of the change that would make in the partners’ lifestyle. Their goal might be to staff-up to 10 people, cut back their own hours, and become a $4 million firm with very little bureaucracy.

 

Very often, the end goal is exit success. For example, an owner might want to get to $10 million in revenue, get a certain number of distributors on board and a certain number of retailers stocking the product, then sell the company for five times its revenue.

 

To achieve the future you envision, you will have to complete a series of tasks. The process is very similar to achieving other goals, like losing weight. To do that, you must set a long-term goal (lose 20 pounds this year), schedule new activities and behaviors into your daily schedule (go to the gym, eat healthier), set shorter-term goals (lose 1 pound this week), and measure your progress (get on the scale).

 

Unfortunately, while nearly every person can quickly answer when asked what they think their ideal weight is, many business owners can’t articulate what their ideal business looks like. And if you can’t articulate it, you’ll never build it.

 

 

Here are questions to ask yourself as you begin to describe your vision in detail:

 

What does your ideal business look like?

What are your annual revenues?

What are your annual profits?

What products and/or services do you offer?

How many employees do you have? 

How many customers do you have?

How many vacations are you taking each year?

 

Then, most importantly: What do you need to accomplish this month, this quarter, and this year to put you on the right trajectory to reaching this vision? Finally, set the appropriate goals in your daily and weekly planning to reach your monthly goals.

 

In making your plan, you will need to reverse each core aspect of your business—products, systems, sales, staffing—making financial projections and figuring out the milestones to be met on the way to your vision.

 

This year, 9 out of 10 business owners won’t set a specific goal, or the goal will be broad—“I want to increase revenue.” When an entrepreneur thinks that way, he or she spends the days just trying to run the business better, the way it is. Too many owners work hard and try new ideas, but never really focus on whether they’re getting closer to the end game they want.

 

A reverse business plan that is, by nature, thorough and detailed will keep you heading in the right direction as you build the business of your dreams.

 

Reverse-planning for the people you’ll need

Here’s an example of how to achieve a staffing vision:

 

To start, create the organizational chart of what your business might look like in five years. To get ideas about the roles you’ll need to fill, and the qualifications needed to fill them, look at the organizational charts of more-established companies. If they are public companies, you can find and access this information in their annual reports. If not, most companies have a Team page or About Us section that lists the key management structure of the organization.

 

Next, figure out which of these roles need to be filled this year. Then, map out the game plan for making this hire. Perhaps this month you will document the job description and characteristics of the ideal candidate, and next month you will publicly post the job opening and begin accepting resumes. In the third month, you will conduct interviews. And finally, in month four, you will hire the candidate and begin training him or her. Because you have a five-year vision for your company, you will have hired the kind of person who will help the company be on the trajectory to hitting your goals.

 

Contrast this planning method with how the average business owner hires new people. The hire is typically made when someone leaves the company or when the amount of work is simply too much for the current team to handle. The business owner tends to quickly rush through the hiring process. The result? The company ends up with an ill-qualified person who doesn’t have the skillset to help the company reach its goals.

1 response   //   Posted 5 months ago

Happy Anniversary Andrew!

Andrew Bordeaux started with us on 1/3/07...so today marks his SIX year anniversary with Growthink.

Happy Anniversary Andrew, and thanks for all of your contributions over the years!

[Andrew is also a musician, hence this picture.]

5 responses   //   Posted 5 months ago

2013 is Here!

Growthinkers,

Happy 2013 to all!  It is GREAT to have the holidays behind us, a lot of government budget drama resolved in advance of the 1st business day of the New Year (and a nice stock market opening in response to it), and most importantly a whole new and fresh year left in our care for us to make the most of and to work together toward fulfilling our company's mission of helping entrepreneurs succeed.

A few "sound bites" to share with clients, prospective clients, and each other with the start of the New Year  I also encourage all to respond here with some  good, bullish, and optimistic bullets to share re the positive outlook for the entrepreneurial economy....

Again, please add your good bullets here, and let's all have a GREAT 2013!

3 responses   //   Posted 5 months ago

Merry Christmas and Happy Holidays to My Fellow Growthinkers

My Growthink Colleagues,

It is a true honor and a privilege to work with all of you, thank you for all of your hard work and great enthusiasm for our business and our mission.

Merry Christmas and Happy Holidays to you and your families - let's all have a great holiday, finish the year strong, and get ready to make 2013 the BEST year of all of our lives!

Jay

Click to play this Smilebox greeting

2 responses   //   Posted 5 months ago

Seven Productivity Myths, Debunked by Science (and Common Sense)

The end goal of "productivity" is to spend less time doing the things you have to do so you have more time for the things you want to do. Of course, if you follow every morsel of productivity advice out there, you probably spend more time moving papers and emails around than actually getting anything done. Need to simplify your routine? Let's put an end to some common productivity tropes once and for all.

Myth #1: You Have to Get Up Early To Accomplish Anything

The myth that you can miraculously solve all your productivity problems by forcing yourself to be a morning person is a long-standing one. It all started when Biologist Christopher Randler published a study that pointed out early risers are indeed more productive. He subsequently defended the study in the Harvard Business Review. A lot of the "early riser = more productive" talk came from this, but in reality he only concludes that people who wake up earlier are in a more proactive mindset, and thus willing to tackle more throughout the day. His results can easily be accounted for by considering how most of us are socialized to believe that waking up early equates having a whole day to get a lot of things done. Photo by David Dávila Vilanova.

A 2011 study published in the journal Thinking & Reasoning points out what we should really remember: That the key to being productive and creative (which the study breaks into two different types of activity) is to work the hours that are best for you. If you're an early bird (or someone forced into an early schedule because of your job), get your difficult and most troublesome tasks out of the way first thing, when you're most productive. Then in the afternoon, when you start to wane, it's time to throttle back and spend time brainstorming and being creative instead. The inverse applies to late risers or people who work best in the afternoon or evening. Put simply, you'll have more time if you get up early or work late when no one's around to distract you, but that doesn't necessarily make you more productive.

Myth #2: Power Through Your Slumps

Another popular productivity myth (that's thankfully waned in recent years) is that the best way to get through a slump is to power through it. Put your nose to the grindstone and try and press through your creative or productive blocks and you'll be okay—or so the myth goes. The truth is quite contrary: an old study (1972, in fact) published in theJournal of Personality and Social Psychology debunked this idea a long time ago, and asserted that your willpower is limited, so use it wisely. Photo by stuartpilbrow.

To use an analogy, whipping a horse gets you less speed and distance every time you do it. Trying to push yourself forward gets diminishing returns after a certain point. Instead, you should switch gears and do something else, or take real breaks where you disengage completely and give yourself an opportunity to recharge. Unfortunately, most work environments aren't terribly conducive to this, but it's not impossible to work on a side project for a while, or just get out of the office and take a walk before coming back to what you were doing. A 2009 study by the Society for Human Resource Management published in the Harvard Business Review took the idea a step further, and proposed making time off and away from the office mandatory for employees because of the productivity gains it nets.

Myth #3: Multiple Monitors Increase/Decrease Productivity

We're cheating here because we're playing both sides of this myth, but here's the truth: whether multiple displays enhances your productivity depends entirely on what you do and how you work. It's not an up/down answer. A number of the articles several years ago pushed the idea that multiple displays make us more productive, but the studies they were based on concluded something very different. Here's what they actually said:

The oft-referenced 2005 Pfeiffer Consulting study on multi-monitor productivity was actually commissioned by Apple, and released to coincide with the then-brand-new 30-inch Apple Cinema Display. The study actually concluded that it was real estate that mattered more than number of displays.
A similar 2008 study by the University of Utah found similar results, but it should be noted that study was comissioned by NEC Display Solutions. The results however, were sound, as was the methodology: in the end, for people working with text or spreadsheets, one larger display or two larger displays made them more productive than one smaller one.
Even Microsoft released a very dated study back in 2003 to the same effect, where multiple monitors were somehow subbed in for larger display space, which was the real key to productivity.

In many of these studies, the marketing push was to multiple displays instead of a larger display because larger screens either didn't exist or were prohibitively expensive. It was simply more realistic to suggest to people they get two 24" displays instead of try and find a 30" display, when Apple was the only one selling one and it was ridiculously expensive at the time. We've evencovered both sides of this debate in great detail before, and while the issue has simmered, it's not going away anytime soon. Photo by Sean MacEntee.

So what's the truth? Simple: for most people who do heavy text or spreadsheet-based tasks in relatively few open applications, real estate matters more than number of displays. For people who need delineation between running applications, windows, or workspaces, number of displays matters more than real estate. Figure out what that means for you, find a great deal, and buy accordingly.

Myth #4: The Internet/Information Overload Is Making Us Stupid, So Disconnect to Get Things Done

You'll hear this refrain from a number of people, most commonly in order to sell books. Nicholas Carr and Clay Johnson both propose that the internet is changing the way we think and absorb information, with the consequences being that we learn little, turn to the internet for any research instead of learning to think critically, and are subsequently bombarded with more data than is useful. Photo by BuzzFarmers.

There's some truth to the theory, and wetook a closer look to separate fact from fiction earlier this year. However, it isn't the internet that's making us stupid, and information overload is a failure to filter the firehose of data we all drink from. This 2011 Columbia University study, published in the journal Science, examined Google's effects on memory and concluded that yes, many of us choose to research information we need instead of commit it to memory. What the study didn't do is draw doom-and-gloom conclusions about what that means for human intelligence.

The real myth here lies in the interpretation of scientific data, not the data itself. When asked to recall the speed of sound offhand, Albert Einstein explained that, roughly "[I do not] carry such information in my mind since it is readily available in books." The internet is much the same way—we learn to be careful about the information we memorize because we know we can access more at any time. The downside is that when we do, we get more than we need. Again, it's up to us to manage, instead of throwing out a valuable tool because of a productivity prescription written for us by someone else.

Myth #5: It's Impossible to Get Real Work Done at Home/a Coffee Shop/Library/Away from the Office

If you've been reading Lifehacker for a while, you know we're huge advocates of remote work, but this myth still persists, especially in the minds of managers and HR staff who still believe that "if I can't see them, they're not working." Luckily, science is on our side. Researchers at Stanford University examined 500 employees at a travel agency in China with over 12,000 employees total, and even after a few weeks, the employees who were working from home were showing definitive signs of increased productivity. Their study results are freely available to read, for anyone doubting the methodology. Photo by antony_mayfield.

Another study, published in the December edition of Journal of Consumer Research takes a different approach, and notes that mild, ambient noise—like the din of a coffee shop, makes us more productive. Too much noise—like the furor at a busy office, for example, (especially one with open-air cubicles) can be a productivity killer, but working from home or a mildly buzzing public space can do wonders for our work. Of course, anecdotal evidence also abounds. Workingfrom home or from a coffee shop have their own challenges, but the benefits often outweigh the drawbacks. As with Myth #1, you should do what works best for you. If you work best in an office, head in every day. If you work best at home, convince your boss to let you try it.

Myth #6: Sorting and Organizing Is the Solution to Email Overload

If you're looking to get to Inbox Zero, spending all day sorting and organizing your email into folders may be one way to do it, but that's not really being productive, is it? Remember: the goal of any productivity method or tip is to give you more time to do the things you need to do, not to whittle hours away in the name of productivity. One University of California Santa Cruz study(comissioned by IBM) concluded that email technologies have gotten to the point where filing messages may actually make themharder to find, and more importantly, wastes your precious time. Photo by Jason Rogers.

We touched on this topic before, and suggested that you should just search for messages when you want to find them instead. The study didn't conclude this, mind you—the study noted that it was simply more efficient to search when a message was needed than it is to scroll through folders, and then scroll through messages in a folder. So what should you really do? The study notes that opportunistic access methods are the best for retrieving emails you need. Boiled down, that means the method that gives you the most opportunity to find the exact item you're looking for.

Put simply: reduce your email volume by unsubscribing from crap, automate and filter everything possible (services like Unroll.me and Boomerang help), manually organize little things that need a personal touch, and archive/delete everything else. Then leave the rest to search. That way you get the best of both worlds: a clean, organized inbox that can take care of itself, and you can skip through your inbox and get rid of anything else very quickly. If you need to find something, it's a quick search away, and sorting can make those searches a bit easier. A few filters can go a long way, and don't take much time to set up.

Myth #7: [Insert Productivity Technique] Will Fix Everything and Make You a Happy, Productive Person with More Free Time

This one's about logic, not necessarily hard science, but we can't stress it enough. First of all, there is a productivity technique that works for everyone. The myth, however, is that it's the same productivity technique. Some productivity methods are favored by specific professions (many coders and creatives prefer The Pomodoro Technique, but I've known project managers and directors that prefer GTD, and sysadmins and technicians who prefer Personal Kanban.) Even if you can't find one that works on its own, we've shown you how to remix productivity methods to build one that works for you. Photo byDennis Hamilton.

At the end of the day, the productivity method that works for you is the one you'll actually use. Don't try to shoehorn a method into your workflow because someone else thinks it's the way to go. If you're a project manager and you think GTD is too cumbersome, try Kanban on for size. If you want to take elements from both and mash them together so they work for you, you can do that too. If your system is out of control, go back to basics and give yourself a fresh start. The important thing to remember is that your productivity method should save you time and energy so you can focus on the task at hand. If you spend more time organizing than you do doing the thing you're organizing, you're wasting time. Productivity is about getting to work so you can stop working and do the things you want to do, not about spending all day moving papers from one box to another.

________________________________
Again, these productivity myths only scratch the surface of the ones we see and read posted by productivity blogs around the web every day. We're even guilty of some of them. Regardless, all it takes to debunk many of these is a little digging into the research behind each of these assertions, and looking at the actual conclusions of the studies instead of what others concluded based on the study. Like many things, productivity isn't a one-size-fits-all approach. It's highly individual, and every bit of advice you read—including ours—should be considered as such.


http://lifehacker.com/5965826/seven-productivity-myths-debunked-by-science-and-common-sense
0 responses   //   Posted 5 months ago

Ben Horowitz from Andreessen Horowitz: Old People

Your startup is going well and as your business expands, you hear the dreaded words from someone on your board: “You need to hire some senior people. Some real ‘been there, done that’ executives to help you get the company to the next level.” Really? Is now the time? If so, where do I begin? And once I get them, what do I do with them? And will I know if they are doing a good job?

The first question you might ask is, “Why do I need senior people at all? Won’t they just ruin the culture with their fancy clothes, political ambitions and need to go home to see their families?” To some extent, the answer to all of those may be “yes” which is why this question must be taken quite seriously. However, bringing in the right kind of experience at the right time can mean the difference between bankruptcy and glory.

Let’s go back to the first part of the question. Why hire a senior person? The short answer is time. As a technology startup, from the day you start until your last breath, you will be in a furious race against time. No technology startup has a long shelf life. Even the best ideas become terrible ideas after a certain age. How would Facebook go if Zuckerberg started it last week? At Netscape, we went public when we were 15 months old. Had we started six months later, we would have been late to a market with 37 other browser companies. Even if nobody beats you to the punch, no matter how beautiful your dream most employees will lose faith after the first five or six years of not achieving it. Hiring someone who has already done what you are trying to do can radically speed up your time to success.

But CEO beware: hiring senior people into a startup is kind of like an athlete taking performance-enhancing drugs. If all goes well, you will achieve incredible new heights. If all goes wrong, you will start degenerating from the inside out.

In order to make all go well, if you are considering hiring a senior person, do not chase an abstract rationale like “adult supervision” or “becoming a real company”. A weak definition of what you are looking for will lead to a bad outcome. The proper reason to hire a senior person is to acquire knowledge and experience in a specific area.

For example, as a technical founder, you probably do not have terrific knowledge of how to build a worldwide sales channel, how to create an invincible brand or how to identify and negotiate ecosystem-altering business development deals. Acquiring a world-class senior person can dramatically accelerate your company’s ability to succeed in these areas.

One good test for determining whether to go with outside experience versus internal promotion is to figure out whether you value inside knowledge or outside knowledge more for the position. For example, for engineering managers the comprehensive knowledge of the code base and engineering team is usually more important and difficult to acquire than knowledge of how to run scalable engineering organizations. As a result, you might very well value the knowledge of your own organization more than that of the outside world.

In hiring someone to sell your product to large enterprises, the opposite is true. Knowing how your target customers think and operate, knowing their cultural tendencies, understanding how to recruit and measure the right people in the right regions of the world to maximize your sales turns out to be far more valuable than knowing your own company’s product and culture. This is why when the head of engineering gets promoted from within, she often succeeds. When the head of sales gets promoted from within, she almost always fails. Asking yourself “Do I value internal or external knowledge more for this position?” will help you determine whether to go for experience or youth.

Once They Arrive

Bringing senior people on board can be fraught with peril as I outlined in Why is it Hard to Bring Big Company Execs into Little Companies? and Hiring Executives: If You’ve Never Done the Job, How Do You Hire Somebody Good?

Equally difficult is managing them effectively once they come on board. Senior people pose several important challenges:

  • They come with their own culture – they will bring the habits, the communication style and values from the company they grew up in. It’s very unlikely these will match your environment exactly.
  • They will know how to work the system – because senior people come from larger environments, they usually develop the skills to navigate and be effective in those environments. These skills may seem political and unusual in your environment.
  • You don’t know the job as well as they do – in fact, you are hiring them precisely because you don’t know how to do the job. So how do you hold them accountable for doing a good job?

In order to prevent the internal degeneration mentioned earlier, it’s important to both be aware of the above issues and then employ appropriate countermeasures to make sure they don’t metastasize.

First, you should demand cultural compliance. It’s fine that people come from other company cultures. It’s true that some of those cultures will have properties that are superior to your own. But this is your company, your culture and your way of doing business. Do not be intimidated by experience on this issue, stick to your guns and stick to your culture. If you want to expand your culture to incorporate some of the new thinking, that’s fine, but do so explicitly—do not drift.

Next, watch for politically motivated tactics and do not tolerate them. I describe this in detail in How to Minimize Politics in Your Company.

Perhaps most importantly, set a high and clear standard for performance. If you want to have a world-class company, you must make sure that the people on your staff—be they young or old—are world-class. It is not nearly enough that someone on your staff can do the job better than you can, because you are incompetent at the job—that’s why you hired them in the first place.

Be careful not to set a low bar because you have not done the work to know what good is. For example, I’ve seen many a young CEOs excited about her company’s competency in marketing and PR because she got a bunch of positive stories on her launch. That’s not a high PR standard. Anybody can get reporters to write nice things about a sweet, cuddly, baby of a company. Only world-class PR people can deal with gangly, pimple ridden, teenage companies. World-class PR people can turn around negative stories. World-class PR people can turn chicken shit into chicken salad. Turning chicken shit into chicken salad requires long-term, trusted relationships, deep know-how and the confidence to make use of both appropriately. PR kids don’t have any of the three.

One excellent way to develop a high standard is to interview people who you see doing a great job in their field. Find out what their standard is and add it to your own. Once you determine a high yet achievable performance bar, hold your executive to that high standard even if you have no idea how they might achieve it. It’s not your job to figure out how to create an incredible brand, tilt the playing field by cutting a transformational deal or achieve a sales goal that nobody thought possible – that’s what you are paying them to do. That’s why you hired them.

Finally, you’ll need your new executive to be more than just a goal achiever. She will need to be well rounded and part of the team. My friend Bill Campbell developed an excellent methodology for measuring executives in a balanced way that will help you achieve this. He breaks performance down into four distinct areas:

  1. Results against objectives – Once you’ve set a high standard, it will be straightforward to measure your executive against that standard.
  2. Management – Even if an executive does a superb job achieving her goals, that doesn’t mean she is building a strong and loyal team. It’s important to understand how well she is managing, even if she is hitting her goals.
  3. Innovation – It’s quite possible for an executive to hit her goal for the quarter by ignoring the future. For example, a great way for an engineering manager to hit her goals for features and dates is by building a horrible architecture, which won’t even support the next release. This is why you must look beyond the black box results and into the sausage factory to see how things get made.
  4. Working with peers – This may not be intuitive at first, but executives must be effective at communicating, supporting and getting what they need from the other people on your staff. Evaluate them along this dimension.

Aw Man, You Sold Your Soul

Hiring the first senior people into your company may feel like selling your soul and if you are not careful, you may well end up selling the soul of your company. But if you want to make something from nothing, you have to take risks and you have to win your race against time. This means acquiring the very best talent, knowledge and experience even if it requires dealing with some serious age diversity.


http://bhorowitz.com/2012/12/05/old-people/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bhorowitz+%28ben%27s+blog%29&utm_content=FaceBook

1 response   //   Posted 5 months ago

Dad of Divas' Official Book Review for Dave Lavinsky's Book, Start at the End.

MONDAY, DECEMBER 10, 2012

Click for Full Article!
About the Book
Business owners, and their teams, often lose their way in the midst of the day-to-day stress of generating sales and profits. Suddenly, everyone becomes so focused on short-term goals that the entire organization loses sight of the long-term vision. The solution is to “‘Start At The End’.” When you know where you want your business to end up, you can reverse engineer your business plan to get you there. With a detailed vision of the end, you and your team will stay focused and energized, always moving toward that ultimate goal.

Whether your goal is to sell your business for millions, multiply your revenues, expand operations to a new location, or generate more profits, ‘Start At The End’ offers a unique approach and action steps for business owners and entrepreneurs to redevelop your business plan. You’ll learn how to re-create your long-term vision, and then make continuous progress to achieve that vision while continuing to hit your short-term goals. ‘Start At The End’ offers inspiring stories of other business owners and entrepreneurs who have achieved significant success, as well as easy-to-follow exercises. You’ll learn how to:

  • Build a company you can sell for millions of dollars
  • Create vision statements from a customer perspective and from a business perspective that increase your sales and profits
  • Systematize your business and minimize mistakes
  • Increase your conversion rates and the lifetime value of your customers
  • Improve the performance and productivity of your employees
  • And more!

‘Start At The End’ gives you a chance to take a step back, reevaluate your business, and redesign your business plan to achieve the success you dreamed of when you first launched your company.

About the Author
DAVE LAVINSKY is the cofounder ofGrowthink, a consultancy that helps entrepreneurs and business owners identify and pursue new opportunities, develop new business plans, raise capital, and build growth strategies. Over the past decade, Growthink has helped thousands of companies develop business plans and achieve massive growth. 

Personally, Dave has guest lectured at top universities, developed more than 100 business plans, and has written hundreds of articles on entrepreneurship, business planning, and raising capital. You can read some of Dave's articles on the Growthink blog. Dave also writes the Success Is The Only Option column on Forbes.com and contributes toAmerican Express’ OpenForum.

Dave is a successful serial entrepreneur, having started and exited multiple Internet and product-focused ventures, including Emerge Juice and Nutrition Systems - a wellness products developer and distributor; Shoutmouth - a niche music -focused social networking site; Z Reporter LLC - owner of over 3,000 niche-focused information websites; and TopPayingKeywords - a Search Engine Marketing and Optimization research data firm.

Dave has an MBA from the Anderson School of Management at UCLA and earned his Bachelor's degree from the University of Virginia. He lives in New York with his wife and two children.

My Take on the Book
In reading this book you can tell that the author has done what he is preaching. He has gone out into the trenches and started businesses and used his techniques to be successful and this is something that makes this book unique. I love the ideas that the author shares about visioning and placing the end first as it makes so much sense. I published my second book this year but sales have not been where I want them to be and I really could not figure out why. In reading this book, I re-evaluated my overall goal with the book (which was not to make money though that would be nice) and was able to come up with a new strategy that I think will be successful in 2013 - I am in the planning stages right now! I found so many other transferable pearls of wisdom though in this book that I can put into practice into my everyday work and life as well and I know that you will be able to also!

All opinions expressed in this review are my own and not influenced in any way by the company.  Any product claim, statistic, quote or other representation about a product or service should be verified with the manufacturer or provider. Please refer to this site's Disclaimer  for more information. I have been compensated or given a product free of charge, but that does not impact my views or opinions.
 
1 response   //   Posted 5 months ago

Dave Lavinsky teaches how to remodel your business plan with the release of his book Start At The End

Many of today's most successful businesses got their start without an apparent business model in mind (I'm looking at you, Facebook). But while drifting around for years as a free service without a clear path to profits might work for some businesses, it's not a road that's going to lead most startups to a good place.

That's the clear message from Dave Lavinsky advocates in his new book Start at the End: How Companies Can Grow Bigger and Faster by Reversing Their Business Plan.

A serial entrepreneur who has started multiple companies, both Web and product-focused, Lavinsky is now cofounder of Growthink, a consulting firm that claims to have helped more than 500,000 entrepreneurs identify opportunities and grow their businesses. His reverse engineering approach has useful lessons Whether your business is just getting off the ground or in the early years of startup evolution.

Essentially, Lavinsky told ReadWrite, smart entrepreneurs start by defining the goals they want to achieve and working their way backward to arrive at the steps necessary for success. You might think you've already defined your goals, but Lavinsky is looking for much more detail than the vague goals created when businesses are formed.

Stereo Vision Statements

Start by creating two vision statements:

  1. One customer-focused (which most of us are familiar with)
  2. One from a business perspective, which is what sets Lavinsky's ideas apart.

This vision includes not just your general business goal (Selling your company? Going public? Creating a business that spans three generations?), but also the financial metrics and business assets you'll need to achieve that goal. In other words, if you want to sell your business, how much do you want to sell it for? $40 million? Then what are the financial metrics (dollar revenues, percent market share, dollar EBITDA, financial health ratios, etc.) that will get you there?

Once you've determined these visions, Lavinsky shows you how to assess the opportunities available to you; set annual, quarterly and monthly goals and milestones; and track your progress.

Pivots Are Part Of The Process

Lavinsky is well aware that the road to success is rarely smooth, and you might need to pivot before you hit your goal. "There are several roads you can take to your destination," he says. "Pivoting is about choosing the best road for you and your company."

When you pivot, Lavinsky explains, you're changing your business model based on feedback from your customers and your market. "Because the new model is based on actual market data - as opposed to the "hunch" you had when you launched your company - it's more likely to resonate with customers and yield more success than your previous business model."

Sounds good, but how do you know when it's time to pivot? "If you've been 'spinning your wheels,' then it's time to pivot," says Lavinsky. "If you're continuing to work on your business and try new things, but without realizing the results you want, at some point, you need to come to the conclusion that either you're not executing properly, or your business model is flawed." In the former case, it's time to bring someone in to help you execute; in the latter, it's time to pivot.

Start at the End details several methods for identifying possible pivots and picking the best one for you, including:

SO Analysis: identifying your strengths and opportunities. "You're only going to build a great business if your business plays to your existing strengths, so make sure it does," explains Lavinsky.

Ansoff Matrix: the Ansoff Matrix helps determine the best new opportunities to pursue. Most important, it shows that any new opportunity targeting your current market (since you know and understand those customers) has a higher likelihood of succeeding.

Judge vs. Market Criteria: "When selecting a pivot, make sure the market is ripe for it," cautions Lavinsky.

Pivoting is not something to take lightly, and you can't do it every month, Lavinsky warns. "You need to pivot wisely and dedicate your company to pursuing it for a set period of time-perhaps six months or more."

If you decide pivoting is right for your business, you need to adjust your business plan accordingly. "Most importantly, in your plan, determine how you will execute on the pivot, such as who will be responsible for what tasks and goals." It's also crucial to establish weekly, monthly and quarterly goals and milestones, Lavinsky says, and to constantly gauge your performance against these milestones.

Good Stuff At The End

Perhaps not surprisingly, one of the most useful sections of Start at the Endcomes near the end. "Multiplier Tactics" offers real-life approaches to turbocharge your business. My favorite example? The woman who had never worked in her late husband's business until he left it to her, but then doubled its profits in a year by asking the managers to do more of the 5 things that worked best and less of the 5 things that worked least.

1 response   //   Posted 5 months ago

27 Lessons From 27 Years

Dan Gilbert is a busy guy.  He's the founder and chairman of Quicken Loans, the largest online mortgage company in the world.  He's the majority owner of the Cleveland Cavilers, owner of two casinos in Ohio, and primary investor in over 60 other companies.  He is leading a massive charge to revitalize Detroit, and has purchased millions of square feet of office space in Detroit.  He's a deeply committed philanthropist, who has pledged to give away half his wealth to charity (along with Bill Gates and Warren Buffet).  He's an incredible leader, entrepreneur, humanitarian, and even part-time radio host.

Dan recently shared the "27 things I've learned in 27 years of business." As an inspiration to so many, here are his powerful lessons.  Enjoy! 

27: Don't get distracted by people who want you to review the receipts for the paintbrushes. Your job is to paint. 

26: Building anything great is messy. 

25: The one who tells you there is food on your face is your friend. 

24: The price of knowing is often way too high. 

23: Not everything that can be counted counts, and not everything that counts can be counted. (Thanks Albert E.!) 

22: Spreadsheets are for measuring the past, not the future. Remember, 57.392% of statistics are made up on the spot. 

21: The more you give, the more you get. It's as simple as that. 

20: Winning on the hard stuff does not make the easy stuff easy. 

19: It's not so frickin' funny when it's you, is it? 

18: There is no better joy than helping people around you go to levels higher than they ever thought they could. 

17: Working longer hours does not automatically make you more successful. Working smarter does. 

16: People who are constantly negative, pessimistic and cynical are not spewing their venom towards you or your ideas. They are talking about themselves. Never forget that. 

15: The little things DO matter. Especially to people. 

14: Think big, huge, large, enormous, immense, jumbo, walloping, gigantic, king sized, mammoth, massive, thundering. You have to think anyway... so why not? 

13: Try to please everyone all of the time, and you will end up pleasing no one most of the time. 

12: Be curious. 

11: Any ounce of energy you spend regretting mistakes you made in the past is taking away energy you need from doing things right in the present. 

10: Nothing great and long-lasting is built overnight, but you MUST take the first step NOW. 

9: Appreciate everything. 

8: Light yourself on "fire," and many people will join your mission. 

7: I never learned anything talking. 

6: Thinking (going deep) about problems, challenges, new ways of doing things and creativity is one of THE hardest things you will ever do. It also will bring you the finest results. 

5: There is always a way to turn a problem into an opportunity. Find it. 

4: Some people WILL NEVER get it. Get them out of your team, club, house, life, etc... and both of you will be happier. 

3: If you believe tomorrow will be even more exciting than today, then you have discovered what passion really means. 

2: Nothing clarifies like clarity. 

1: When you love what you do, there is no such thing as "work."

http://joshlinkner.com/2012/27-lessons-from-27-years/
1 response   //   Posted 5 months ago

Seven Phrases Which Make VCs Run in the Opposite Direction

Getting that check from a Venture Capitalist is really hard – there’s no doubt about that. We’re a tough group and there are a lot of reasons why we’ll hate your idea right out of the gate. If you’ve gotten through the first few phases of the vetting process and have a real venture capitalist sitting across the table from you ready to discuss your idea, good for you – that’s a major hurdle to have already crossed. At this point, the single most important short-term goal is to keep this person there, so you can get her team on board to issue your company a term sheet. Make sure you know your data cold. Make sure you exhibit a healthy dose of passion for the project. Make sure you allow an even back-and-forth dialogue. And make sure you don’t say any of these phrases – if you do,  it’s likely I’ll leave the room.

“We plan to flip the business quickly.” Real venture capitalists want to build something real, large, meaningful, and important. We’re not interested in just getting your company to a point to sell it and make a couple bucks in the process. If it doesn’t change the world, why bother?


Gangnam Style Vector Dance

“It will go viral.” If I could look into a crystal ball and come up with the next “Gangnam Style” sensation, I’d tell you how to craft your story. No such thing exists, so you better have a detailed, specific plan on how you plan to market/sell the product, as well as tell the story of your company. Going viral is the result of a successful strategy, not the strategy itself.

“My brother-in-law loves this idea.” Getting approval from your mom or cat is easy, but that doesn’t validate the market.  Receiving legitimate, third party validation is difficult but a necessity. It’s well worth it, because in my eyes as a VC, nothing is better than real, paying customers.

“No one does it all like we do.” By attempting to be all things to everyone, you’ll end up being nothing.  Zero in on one problem – focus on being the best in the world at that one thing and you’re more likely to achieve greatness in your category. The Chinese proverb holds true: “If you chase two rabbits, both will escape.”

 “We don’t have any competition.” Every business has competition, along with a host of other challenges. If there weren’t any challenges, you wouldn’t be sitting across the table from me looking for a partner. Acknowledgment of the soft spots gives your pitch a much-needed dose of reality and humility. We’re happy to help you through those soft spots, but ignoring them altogether just makes us skeptical – and we’ll ultimately question the other things you’ve said, too.

“The small hurdle is we don’t know how to create it.” If you just have a big idea and nothing proven in executing upon that idea, that’s OK. You’re just not ready for a VC check, even with an early-stage investor like my firm, Detroit Venture Partners. You should be focusing on developing relationships, in hopes of finding a partner who can help bring your idea to life. At that point, your founding team could stand to benefit from a business accelerator, such as Bizdom or TechStars.  Once you’ve demonstrated success, learned from a few failures, and reached milestones along the way, come see me.

“If we can just capture 1% of the market, we’re billionaires.” That sounds almost as intelligent as me day dreaming, “If I could just fly to the moon tomorrow…”. I’m smart enough to do simple math – 1% of a large vertical could very well be a billion-dollar opportunity: it’s why venture capitalists are in business. Explain how you get to that 1% acquisition rate. Your detailed, thoughtful plan is much more enticing to me than the grandiose idea of what could be. Tactical roadmaps are critical to get yourself and your company to that grand result.

You’ve got me across the table – now it’s your job to captivate me. Make your meeting count.

http://www.forbes.com/sites/joshlinkner/2012/12/07/7-phrases-that-make-vcs-run-in-the-opposite-direction/
0 responses   //   Posted 6 months ago