Platt Perspective on Business and Technology

Taking a simple systems approach when planning and building a business

Posted in startups by Timothy Platt on August 21, 2014

I have found myself thinking about startups and early stage businesses lately, and particularly about a couple of these new ventures that I have worked with. An email from an old colleague can do that, bringing former work experience back into the present. And this has prompted me to address some issues in a perhaps more organized manner that I have touched upon in earlier postings, and particularly in some of my beginning postings to my directory: Startups and Early Stage Businesses.

• When you set out to build a new business, most of the time your focus is going to be on what you would offer as marketable products and services that you could present as offering unique value, not already matched by your would-be competitors. That, I add, does not necessarily mean offering something that is completely, universally unique and new to the world; it simply means offering sources of value to the marketplace that you would target and to its customers, that addresses needs that are not already sufficiently satisfied for them – and that would-be competitors could not just as easily or more so, meet from their here-and-now systems and resources. But either way, when you plan in building a new business your primary focus is probably going to be on what you would produce that could offer perceivable value to others, and for which you and your business would be compensated, and with incoming revenue and with a profit.
• When you actually build this new venture, much of your focus has to shift to questions of how, and to the issues of business processes and the operational and strategic decisions that drive them.

As a specialized if crucially important aspect of that second bullet point and meeting its requirements, I could cite my earlier series: Understanding and Navigating Burn Rate (see Startups and Early Stage Businesses, postings 67-78 for its Parts 1-12.) And I note in that regard that even if a business venture sets out to bring what should be a tremendously valuable new offering to market, if it runs out of available money before it can do so it is probably going to fail – and take its founder’s financial resources with it too.

But a venture’s financials are only one way to look at this puzzle. Building a successful new business venture, and in ways and according to decision making processes that make effective use of financial and other resources, calls for taking a wider angled view of the business and its developing operational and strategic processes and visions.

This posting is all about developing and pursuing a lean and focused business and both strategically and operationally, and with one overarching goal – meeting the basic requirements and objectives of that first of two bullet points at the top of this posting.

• Anything that you would do with and through your business, that does not improve your position for developing your unique value proposition products or services and bringing them to market limits your chances for success by unproductively bleeding off essential resources.

As a case in point, and thinking back to some of the failed dot-com startups that I consulted with from before the first dot-com bubble burst, too many focused way too much effort and way too much of their essential core resources to the goal of making their workplace a “talent attracting” fun place with slate bed pool tables and other luxuries. These perks did attract attention and helped them to bring in staff. But the people they needed most who knew how to work in a successful startup and improve the chances of it being successful, were by and large driven away.

When you set out to build for success in a new business venture, keep things lean and simple and focused on the essentials. Pay close attention to what you offer potential employees when and as you find legitimate need to begin developing a head count, and pay as close attention to what you offer to any founding partners from the very beginning. And be realistic and stay focused on the business itself and on building it from a solid, sustainable foundation. Pay very close attention to your financials and to the issues and challenges of available liquidity. And build with clarity and understanding from there, where this clarity and understanding come from monitoring outcomes and results as you try out ideas and approaches to see how they work, and how they scale-up as you begin to build up.

And not everything is going to work and even when building what turns onto a very successful new business. Always be willing to rethink and retry, and be willing to switch to Plan B alternatives – which you prepare for as you go along as part of your basic, ongoing due diligence:

• What could go right here?
• What could go wrong here?
• And how should I performance measure so I can tell the difference as to which of those is happening and as early on as possible?

I am certain to return to the issues that I address here in future postings. Meanwhile, you can find this and related postings and series at Startups and Early Stage Businesses.

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