By Beth Carter
Posting in Cities
Two entrepreneurs have some advice for would-be startup founders: Don't spend too much time planning when you should be selling.
Starting your own business is a daunting, complicated task. Most people, after incubating an idea and mustering the courage to venture forth, spend time trying to perfect a business plan before they actually interact with a customer.
This is the wrong approach, say Dave Llorens and Ryan Ferrier, four-time entrepreneurs who run a new program called 60 Day MBA.
Consider their friends at San Francisco-based clothing brand Taylor Stitch as an example. Michael Armenta, Barrett Purdum and Michael Maher decided they wanted to make clothes. They knew nothing about logistics and spent the better part of a year trying to plan around that, getting nowhere. Eventually, the three got creative, measuring their friends in bars. They opened several pop-up shops around the city once they gained a little clout.
Now, the guys behind Taylor Stitch have a full-time retail store in the city’s Mission District, along with an online store, where they’re equipped to ship and sell their brand’s limited edition merchandise.
The lesson? Interact with customers first, say Llorens and Ferrier, and plan your company around their feedback. Though the founders of Taylor Stitch weren't 60 Day MBA students, they are a perfect example of how to actually get your business off the ground. It’s the startup approach, just for non-startup people.
“Taylor Stitch is iconic of what we would preach,” Ferrier says. “Don’t plan forever and build the perfect machine. Listen to customers, all good comes from that.”
Why does Lloren and Ferrier's advice matter? Llorens was behind solar buying collective One Block Off the Grid (acquired by Pure Energies Group in 2012), while Ferrier has sold previous ventures to Microsoft and Zynga.
Many other educational programs for entrepreneurs teach a step-by-step lesson on how to create a theoretical business plan. Instead, 60 Day MBA students are taught the three T’s: Talk to the customer, Translate what you’ve learned into an offering, then Try it out.
“We’re interested in helping,” Ferrier says. “We’re not going to tell you to patent and incorporate when you don’t need to,” Llorens adds.
For example, one student, Scott, wanted to start a clothing line called Meridian Elements. His assignment was to talk to people and sell one pair of pants. When he did, he said “Now what?” The goal of Llorens and Ferrier is to get their students to that point, where they have to execute or deliver on a sale. Another student, Andy, is turning his idea to help people looking to expatriate into a cohesive and profitable business (Mon Ami Andy). Another, a marketing professional, is learning exactly what she’s best at to promote her freelance business (LibbyDodd.com).
The 60 Day MBA coursework includes a downloadable set of lessons, accompanied by a weekly training call with peers and an instructor. Llorens and Ferrier weren’t prepared to disclose how much a session costs, but say they will be switching to a subscription model soon for a reasonable fee.
Whether it’s actually measuring strangers in bars for shirts, Llorens and Ferrier's message is to listen to customers and not to plan too much without real information. “Don’t put the cart before the horse,” Llorens says. “It’s about momentum.”
May 20, 2013
That is historically how most small businesses have been started. In most companies the grand business plan usually comes into play when expansion/growth is desired and banks/venture capitalist want a plan in hand that shows projected ROI so they know they get paid back.
No such thing as perfection, so time spent trying to perfect your plan is time wasted. You need a business plan to get financing, but you'll have to adapt to the realities you encounter; so plan on being flexible.
I say there are two different approaches. If you can finance your company on your own via bootstrapping or family/friend investments, then all you need is an idea and then you might as well start dealing with your proposed customers and see what works. Most business plans are just ideas that are completely changed upon implementation. However, if you need a $100,000 investment to start your business, then most investors will want some sort of business plan. Shoot, even if you're already a million dollar company and want an investment to jump up to the ten million dollar category, most banks and investors will want to see a business plan. But don't waste a lot of time planning because battle plans never survive contact with the enemy and business plans never survive contact with the customer. The goal of a business plan is to attract investors. The goal of a business is to attract customers. /* and if you may think all businesses first need customers, let's talk about dotcom booms */