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How to Solve a Problem

  1. Define the problem
  2. Define a set of criteria for a good solution
  3. Explore potential causes of the problem
  4. Explore existing solutions
  5. Identify alternative approaches for resolving the problem
  6. Select the best approach for resolving the problem based on the criteria for a good solution (number 2 above)
  7. Plan the implementation of this approach
  8. Implement the plan
  9. Monitor the results
  10. Verify the problem has been resolved
[1.05]

Our Purpose in Life

Ahhh, that classic question: What's the meaning of life?  Hmmm ... suppose it really is "42"?! (You'll have to see Hitchhiker's Guide to the Galaxy for those details.)  In the meantime, here's a chart that may help you with your answer ...


The Entrepreneur's Creed

  1. Do what gives you energy ... have fun!
  2. Figure out what can go right and make it happen.
  3. Say "can do" rather than "cannot" or "maybe."
  4. Illegitimi non carforundum: tenacity and creativity will triumph.
  5. Anything is possible if you believe you can do it.
  6. If you don't know it can't be done, then you'll go ahead and do it.
  7. The cup is half-full, not half-empty.
  8. Be dissatisfied with the way things are, and look for improvement.
  9. Do things differently.
  10. Don't take a risk if you don't have to ... but take a calculated risk if it's the right opportunity for you.
[Thank you, Jeffry A. Timmons and Stephan Spinelli]

[1.10]

The SCORE SLATE Mentoring Guideline

The US Small Business Administration SCORE program has a well-refined guideline for business mentoring, using the acronym SLATE ...

S] Stop & Suspend Judgment
L] Listen & Learn
A] Assess & Analyze
T] Test Ideas & Teach with Tools
E] Expectations Setting & Encouraging the Dream

As important as what mentors do is what they don't do: they don't make decisions for the venture team.

[1.03]

Questions That Must be Answered in a Business Model

  1. Who are the target customers for this business venture?
  2. How will this venture create and deliver value for these customers?
  3. What, who, where is the primary competition for this venture?
  4. How is the enterprise different and better than the competition?
  5. What are the primary core competencies of this venture?
  6. What is the scope of products, processes, and activities of this venture?
  7. How is this venture organization structured?
  8. How will this venture capture value for profit?
  9. How will this venture grow, and over what time period?
  10. How will this venture attract and retain talent?

Stages of Venture Evolution

Successful business ventures typically move from a] problem/solution ideation to b] planning to c] startup to d] stable to e] sustainable to f] scalable.

Another perspective ...

1. Opportunity ... gap in market, new technology ... maybe, just maybe, we can do something here
2. Idea ... clear problems, viable solutions ... hmmm, looks like there is something here
3. Concept ... viable strategies for earning a profit solving customer problems better than the competition
4. Venture ... viable innovation concept (product, service, process, position, method); viable team (innovator, entrepreneur, money manager); viable resources (people, places, things, time, money)
5. Organization ... team, roles, clear strategies,
6. Company ... legal entity (corporation, LLC, et alia), pre-sales, unstable financials (raising funds)
7. Business ... low-hanging fruit, sales, customers, stable, positive EBITDA, viable business model
8. Enterprise ... scale, scope, markets, growth, significant EBITDA, defined task and assignments, employees
9. Institution ... significant market share, significant industry position, re-invention, continual innovation
10. Tombstone ... the cows have run out of milk

Marketing Brochure Prototype

A prototype marketing brochure is a good tool for "testing the waters" with prospective customers.
  1. Easy way to test a new product, service, solution idea
  2. Easy to iterate a concept
  3. Easy to put in front of prospective customers for feedback: test, measure, learn
  4. Customer can become part of the design process ... pencil and paper and eraser
  5. Inexpensive ... time, money, resources
  6. Works for most any idea concept
  7. Flexible "size" (number of pages) although the fewer the better 
  8. Can incorporate in the venture business plan, summary
  9. Can use to design and develop a product and/or service based on prospective customer reactions to the product and/or service describe in the prototype brochure
Here's a "pencil sketch" of a marketing brochure template:


Lean Startup Terminology

minimum viable product (mvp)
A minimum viable product (mvp) is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort" (similar to a pilot experiment). The goal of an MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible.

As an example, Ries notes that Zappos founder Nick Swinmurn wanted to test the hypothesis that customers were ready and willing to buy shoes online. Instead of building a website and a large database of footwear, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought the shoes from the stores at full price, and sold them directly to customers if they purchased the shoe through his website.Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion dollar business based on the model of selling shoes online.

[Note: Compare a minimum viable product (mvp) to a Maximum Value Product (MVP) which typically results from mvp iterations over time.]

Continuous deployment (only for software development)
Continuous deployment, similar to continuous delivery, is a process "whereby all code that is written for an application is immediately deployed into production," which results in a reduction of cycle times. Ries states that some of the companies he's worked with deploy new code into production as often as 50 times a day. The phrase was coined by Timothy Fitz, one of Ries's colleagues and an early engineer at IMVU.

Split testing
A split or A/B test is an experiment in which "different versions of a product are offered to customers at the same time." The goal of a split test is to observe differences in behavior between the two groups and to measure the impact of each version on an actionable metric.

A/B testing can also be performed in serial fashion where a group of users one week may see one version of the product while the next week users see another. This can be criticized in circumstances where external events may influence user behavior one time period but not the other. For example a split test of two ice cream flavors performed in serial during the summer and winter would see a marked decrease in demand during the winter where that decrease is mostly related to the weather and not to the flavor offer.

Actionable metrics
Actionable metrics can lead to informed business decisions and subsequent action.[1][24] These are in contrast to vanity metrics—measurements that give "the rosiest picture possible" but do not accurately reflect the key drivers of a business.

Vanity metrics for one company may be actionable metrics for another. For example, a company specializing in creating web based dashboards for financial markets might view the number of web page views[20] per person as a vanity metric as their revenue is not based on number of page views. However, an online magazine with advertising would view web page views as a key metric as page views are directly correlated to revenue.

A typical example of a vanity metric is 'the number of new users gained per day'. While a high number of users gained per day seems beneficial to any company, if the cost of acquiring each user through expensive advertising campaigns is significantly higher than the revenue gained per user, then gaining more users could quickly lead to bankruptcy.

Pivot
A pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."[1] A notable example of a company employing the pivot is Groupon; when the company first started, it was an online activism platform called The Point.[3] After receiving almost no traction, the founders opened a WordPress blog and launched their first coupon promotion for a pizzeria located in their building lobby.[3] Although they only received 20 redemptions, the founders realized that their idea was significant, and had successfully empowered people to coordinate group action.[3] Three years later, Groupon would grow into a billion dollar business.

Steve Blank defines a pivot as "changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO)."

Innovation accounting
This topic focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing.

Build–Measure–Learn
The Build–Measure–Learn loop emphasizes speed as a critical ingredient to product development. A team or company's effectiveness is determined by its ability to ideate, quickly build a minimum viable product of that idea, measure its effectiveness in the market, and learn from that experiment. In other words, it's a learning cycle of turning ideas into products, measuring customers' reactions and behaviors against built products, and then deciding whether to persevere or pivot the idea; this process repeats as many times as necessary. The phases of the loop are: Ideas –> Build –> Product –> Measure –> Data –> Learn.

This rapid iteration allows teams to discover a feasible path towards product/market fit, and to continue optimizing and refining the business model after reaching product/market fit.

Business Model Canvas
The Business Model Canvas is a strategic management template invented by Alexander Osterwalder and Yves Pigneur for developing new business models or documenting existing ones. It is a visual chart with elements describing a firm's value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.[30]

Lean Canvas
The Lean Canvas is a version of the Business Model Canvas adapted by Ash Maurya specifically for startups.[28] The Lean Canvas focuses on addressing broad customer problems and solutions and delivering them to customer segments through a unique value proposition.

[Attribution: Wikipedia]

[2.10]

Let's get ourselves some SPLUCK!

SPLUCK: an acronym for Skills, Passion, and Luck … traits shared by every successful Innovator and Entrepreneur. 

SKILLS can be learned. There certainly are a basic set of skills that most every innovator and entrepreneur must have ... but, they aren't necessarily the same set of skills for all.

PASSION is something internal to every individual … some have lots of it, others don’t. We can try to motivate passion in others, but it can’t be forced upon them. They either are, or they aren’t. Heredity versus Environment?  Closely related to Passion is Persistence ... someone passionate is usually someone persistent, too.

And then there's LUCK ... serendipity! Win the lottery!! YeeHaa.  So many folks wait for luck to change their lives. But the Innovator and Entrepreneur ... they don't wait for change to happen to them. Nope! They are the change they want to see in the world! They make their own luck!

SPLUCK: Skills, Passion, and LUCK! 

[Jim's TooSense: I was looking for word that would summarize the key traits of successful innovators and entrepreneurs. Many articles written about why they are good at what they do, and there is a diversity of other characteristics, too. But put them all in a big pot, and the big three that surface are Skills, Passion, and Luck. So I just slammed them all together into SPLUCK. And now you know the rest of the story!]



The C's of Communications

  1. Clear: Make the goal of your message clear to your recipient. Ask yourself what the purpose of your communication is.
  2. Concise: Your message should also be brief and to the point. Why communicate your message in six sentences when you can do it in three?
  3. Concrete: Ensure your message has important details and facts, but that nothing deters the focus of your message.
  4. Correct: Make sure what you're writing or saying is accurate. Bad information doesn't help anybody. Also make sure that your message is typo free.
  5. Coherent: Does your message make sense? Check to see that all of your points are relevant and that everything is consistent with the tone and flow or your text.
  6. Complete: Your message is complete when all relevant information is included in an understandable manner and there is a clear "call to action". Does your audience know what you want them to do?
  7. Courteous: Ensure that your communication is friendly, open, and honest, regardless of what the message is about. Be empathetic and avoid passive-aggressive tones.
  8. Clutching: Make sure your message has AIDA: grabss Attention, develosp Interest, builds Desire, triggers Action. Be sure there is a clear "path to action" for the reader to take ... call, email, website, et alia.

How Much Money Do We Need?

Q: How much money do we really need to get this new venture concept up and running?

A: It is usually not a fixed dollar amount ... most often, it's a range of desired funding versus the time for the venture to become stable (that is, consistently break-even). Too little money and the venture will not survive, too much money and some will likely be wasted.

The optimal amount is a trade-off with the length of time it will take for the venture to become stable (that is, consistently break-even week after week). The management team needs to know what results they can deliver if the investors do pony up the requested level of funding ... and what could happen with less money raised, or more money raised. The results are usually, but not always, a change in the time to become a stable company.

There are a variety of tools, spreadsheets, and more to assist in making financial projections and setting objectives. Here's a good one from SCORE: https://www.score.org/resource/financial-projections-template

A "lean" startup is a special case ... the venture is basically trying to launch and operate below the minimum level of funding need to become stable. Think of it as an experiment. There are things to be learned in a lean venture, and often the most important lesson is that the venture just isn't going to make it without a critical mass of resources. Another lesson is that money isn't the only answer. Too much money can actually be a bad thing, but usually not as bad as too little!

In general, the more money raised for a new venture, the faster that venture can become stable up to a point. Investors will often ask the range of funding the venture is seeking. What's the minimum level of funding to get it going and sustainable, and how long will it take? What's the minimum time to become stable, and how much funding will it take? And finally,  ... what does the venture team believe is the optimal trade-off between time and money?


A little humor: I once made a presentation to a group of "friendly" investors. Call them "friendly" because they already knew us (the management team). The investors had put a good deal of money into our venture, and were (currently) satisfied with the results. Now, we were seeking to raise new money for a spin-off.

In my presentation, I said we needed to raise $x million and it would take us about y months to get the new venture stable (consistently break-even) and sustainable. One of the investors asked what could happen if they put in half the money we were seeking. I said the venture could still probably make it but it would take so many months longer to stabilize, but that level of funding was still above the failure threshold.

The same investor then asked what could happen if we were able to raise three times the money we were seeking. The "wise guy" in me came to the surface. I said that level of funding was way above the amount needed to make it to the shortest possible time to stability, and that the management team would take the excess funds and all buy Porsches because the venture didn't need the money!  I point out again that these were "friendly" investors and I knew they had a sense of humor! They didn't throw me out the door. Rather, they had a good laugh and said those were exactly the "right" answers ... they were just testing the management team to make sure we knew where the end-caps really were!

--Jim

[1.07]



What's in a Name?

What's in a name? When deciding what to call your venture, the answer is plenty. A venture name can be too broad--or too confining. It can be too quirky--or not memorable enough. The challenge is to pick a name that's catchy, but also fits well with your particular type of venture. Here are 10 questions to ask as you ponder various names, keeping in mind that the choice could make all the difference in establishing your venture in the marketplace.

What do I want a name to accomplish for my venture?
A name can help separate you from competitors and reinforce your venture's image, says Steve Manning, founder of Sausalito, Calif.-based Igor, a naming agency. He suggests clearly defining your brand positioning before choosing a name, as Apple did to differentiate itself from corporate sounding names like IBM and NEC. "They were looking for a name that supported a brand positioning strategy that was to be perceived as simple, warm, human, approachable and different," Manning says.

Will the name be too limiting?
Don't box yourself in, says Phoenix-based Martin Zwilling, CEO and founder of Startup Professionals Inc., an advisor to early-stage startups. Avoid picking names that could limit your venture from enlarging its product line or expanding to new locations, he says, citing the example of Angelsoft.com, a venture formed in 2004 to help connect startup companies with angel investors. A few years ago, the venture realized it needed to appeal equally to venture capital and other types of investors. So, it did a costly rebranding to Gust.com, which is less specific and evokes a nice "wind in the sails" image.

Does the name make sense for my venture?
For most companies, it's best to adopt a name that provides some information about their products and services. That doesn't mean it can't also have a catchy ring. Lawn and Order, for example, is a good name for a landscaping venture because it gets people's attention and also clearly relates to the venture's services, Zwilling says. While unusual words like Yahoo and Fogdog sometimes work, quirky names are always a crapshoot.

Is the name easy to remember?
The shorter the name, the better, Zwilling says, suggesting that venture owners limit it to two syllables and avoid using hyphens or other special characters. He also recommends skipping acronyms, which mean nothing to most people, and picking a name whose first letter is closer to A than Z because certain algorithms and directory listings work alphabetically. "When choosing an identity for a venture or a product, simple and straightforward are back in style and cost less to brand," he says.

Is the name easy for people to spell?
That may seem to be a given, but some companies purposely select names that consumers can't easily spell. It's a risky strategy to try to make a venture stand out, and some naming consultants recommend against it. "If your name looks like a typo, scratch it off the list," says Alexandra Watkins, founder and chief innovation officer of Eat My Words, a naming service based in San Francisco. She also believes that it's important that your name be spelled exactly as it sounds. Otherwise, you will forever have to spell it out for people when saying the name or your venture's email or website address aloud. "Think of how often you have to spell your own first or last name for people," she says. "Why would you want a brand name with the same problem?"

How will potential customers first encounter your name?
Some naming experts believe there are exceptions to the easy-to-spell rule, especially if most people will see your name for the first time in a print or online ad. For example, consider Zulily, the online venture offering daily deals for moms, babies and kids. "If you just heard that name, you might not guess how to spell it, but the venture's aggressive online ad campaign has meant that most people first see it spelled out," says Chris Johnson, a naming consultant in Seattle and author of The Name Inspector blog, who came up with the name Zulily. "The payoff is that the unusual sound and spelling of the name have helped them create a very distinctive brand."

Does the name sound good and is it easy to pronounce?
Manning says the sound of the name is important in conveying a feeling of energy and excitement. You also must be sure potential customers can easily pronounce your venture's name. "It is a hard fact that people are able to spell, pronounce and remember names that they are familiar with," he says, pointing to Apple, Stingray, Oracle and Virgin as strong names. But he doesn't like such venture names as Chordiant, Livent and Naviant. "These names are impossible to spell or remember without a huge advertising budget, and the look, rhythm and sound of them cast a cold, impersonal persona," he says.

Is your name meaningful only to yourself?
A name with hidden or personal meanings evokes nothing about your brand, and you won't be there to explain it when most people encounter it. "Refrain from Swahili, words spelled backwards, and naming things after your dog," Watkins says. She gives the example of Lynette Hoy, who was using her first and last name for her PR firm in Bainbridge Island, Wash. The name didn't work because it failed to evoke Hoy's fiery personality and passion, Watkins says. So, the company was rebranded Firetalker PR, and Hoy took the title of Fire Chief. She called her office The Firehouse, and began offering PR packages such as Inferno, Controlled Burn and The Matchbox. "Her entire brand is built around that name and lends itself to endless ways to extend the name," Watkins says. "Her prior name didn't lend itself to any theme or wordplay."

Is the name visually appealing?
You also want to consider how the name looks in a logo, ad or a billboard, Manning says. He points to Gogo, the inflight Internet service provider, as a good name for design purposes. "It's the balance of the letters, all rounded and friendly, versus a word with hard, angular letters like Ks and Ts and Rs," Manning says. Other visually appealing names include Volvo because it has no low-hanging letters and Xerox for the symmetry of beginning and ending with the same letter.

Have I conducted a proper trademark search?
A great name is worthless if someone else already has laid claim to it. Start with some free resources like Trademarkia.com or USPTO.gov to do a cursory search to see if the name is already in use. Then, hire a trademark attorney to do a more thorough screening, and if the name isn't taken, to register it with the U.S. Patent and Trademark Office. "Get it right the first time," Watkins says. "A third of our business comes from companies who are being threatened with trademark infringement."

[1.09]

Innovation Hot Spots

While innovation is often associated with new products, new gizmogadgets, a broader perspective shows innovation occurring in many areas of a business and often has little or nothing to do with products.

Here are some key areas of innovation opportunity for a business venture ...
  1. Products (yes, still high on the list, of course!)
  2. Services
  3. Processes
  4. Business methods
  5. Business model
  6. Revenue model
  7. Positioning (relative to the competition)
  8. Paradigm (a combination of several innovation areas)
[1.10]

Tips for Writing a Venture Plan

  1. Tell your story, tell it quickly, and tell the truth.
  2. Make sure that on every page the reader gets the information you want them to get.
  3. Creativity helps, but scale it back and be traditional with your headings and your formatting.
  4. Use talking headings to send the reader in the desired direction.
  5. Brand your pages; use appropriate colors; use images and charts and graphs to help reader understand key points; write short paragraphs; use headings that help the reader follow the story you are telling; caption your charts/graphs; use graphics to highlight your sentences and use sentences to explain the graphics. 
  6. Avoid fluff.
  7. Cite your sources. 
  8. Every paragraph should represent a discrete chunk of information. Every paragraph needs a thesis sentence. This is normally the first sentence. The middle of the paragraph should add important information to elaborate on the main point. The last sentence of each paragraph should tie up the specific chunk of information and direct the reader to the next chunk of information in the next paragraph. The reader should know all of your main points by 'reading the first and last sentence of every paragraph.
  9. When using bullets or other formatting maneuvers, decide what you want to emphasize, then use the appropriate marking words or graphics. To emphasize importance, for example, use words or phrases that indicate value; if you emphasize time, then use words that indicate chronology. Make sure that the mixture of bullets and numbers you choose conveys the right tone.
  10. To proofread, print a copy and go through it out loud. Look for any place the reader stumbles out loud. Read it backwards if necessary. Have a friend outside of your team read it out loud and see where they get confused. Read slowly to catch basic errors. Allow adequate time to do all this ... it is time-consuming, so give yourself the time to become perfect.
  11. When in doubt, check for rules of grammar and usage with a handbook. [Jim's 2 cents: Save Swing Jazz, Pelicans, and the Oxford Comma! ... Strunk and White, the Chicago Manual of Style, and the US Government agree!]
[Thank you, Randy Accetta]

[2.05]