Like anything else in life, planning and long term vision will help secure the foundations of success. Starting a ‘killer business’ and making sure it will be in that 10% of successful companies in the next 3-5 years takes months of planning and taking critical decisions.
I love cooking, and when I am cooking something which I have made many times such as an omelette (LOL), I follow my gut feel, but when I am making something new, I follow the expert advice -step by step - word by word. Yes, I am the kind of cook who follows the exact guidance on the instructions written on the back of the pack. I do not want to deviate and will try my best to ensure that once the dish is ready it will taste the same as the experts had intended and as I was hoping for.
[image curtsy : Gula Cookbook project at Kickstarter ]
Why am I telling you this? The reason is simple, every start-up is new and different and you as a founder should plan accordingly. There are many unknowns and it is not always possible to get the answers of all the questions, but it always helps to keep things in the right order and in the right quantities. If something goes wrong, you should know how to correct it for instance in cooking if you have added extra chilli, adding some sugar may help counter the effect.
Knowing what you are making, how many tech resources you need, when you should take the product into the market, how would you enter the market, when and how many sales people need to be hired, how much money will be needed to execute the plan etc. These questions do not come in any particular order; most of these have some dependency on each other. This can be compared to the process of preparing ingredients before you cook a dish, putting them in the right order and in the right quantities.
There is another aspect of this recipe model, you should be clear about how many people are going to eat the dish before you start cooking so you can plan accordingly. Thinking this way is more from an output perspective.
So as a founder you should have a clear picture of your burn rate, gross margins, net margins monthly/ quarterly/ yearly sales targets, gross revenue etc. From an output prospective, for example, clearly knowing the exit plan and timing will help you position better in front of investors when you pitch to raise money for your company.
Although much of this may be obvious, I still meet many entrepreneurs who still have no clue about the areas I have discussed. There is nothing wrong with not knowing but if you don’t know try and find someone who does know. This is why being surrounded by a great team is so important.
So next time when you thinking about your startup - think it as you are cooking somithing :).