Thursday, August 24, 2006

Things they don't tell programmers

Today is a rest day from bike riding. I have on my todo list a bunch of F&A items - like expense reports and cleaning out my inbox from old scraps of paper.

I found a scrap of paper with notes on writing a business plan. Waiting for a flight back to Israel from EWR end of June, I was hanging out in a bookstore and saw a shelf of Harvard Business Review books; jeez these books are worse than the dummies series from McGraw Hill - I read the book on Entrepeneurship in about 15' taking notes on a piece of paper I glommed from the guy at the cash register. No wonder my son Yuval, who is doing an MBA at Ben Gurion says that HBS stands for "Half Bull Shit".

So, I reckon this posting is worth about $15.95 for the book and 15' of your time or maybe 45' (if you move your lips).

The 15 minute Business Plan

Identify
1. Value
2. Profit, risk/return
3. Good fit to the founders capabilities
4. Durable, is there a large enough window of opportunity to build and grow a business
5. Amenable to financing, will external capital assist the business development ( I actually liked this one a lot, because practically no business plans I've ever seen really analyze how well the proposed venture is amenable to financing. It's more
like we're top notch entrepreneurs and I need 3M in seed, but not more because we don't want to get diluted...)

Evaluate
1. Market (Analysis of growth, size, TAM)
2. Competition, assess, find an edge
3. Economics of the opportunity
4. Resources required

Market
1. Benefit
2. Size
3. Dynamics
4. TAM
5. Competitors
6. Awareness or latency of demand
7. Name potential cases/clients
8. Access
9. Utility relative to substitute products/services

Economics
1. Price constraints
2. Supply and demand for product/service
3. Elasticity of demand
4. Substitutes
5. Fixed and/or variable costs of operation
6. Cost increases

Business model
1. Revenue sources
2. Cost drivers
3. Investment size
4. Critical success factors


Business plan

1. Executive summary, 1 page
2. Opportunity
3. Company
4. Team
5. Management
6. Operations
7. Finances

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