Just to get this out of the way first…I’m not a fan of business plans for product based software start-ups.  But…that doesn’t mean you shouldn’t make a plan.

Maybe “plan” is a scary word…how about we call it a “product road-map” or  even better, how about “what the heck I’m going to do next”.

Please allow me to explain.

Just yesterday, I was in the audience at a business pitch event and there were two companies presenting.  Both had launched within the past few months, and both had decently attractive websites.  One, in fact, had a quite attractive website and was following the current “manly rustic graphic design” trend that is popular with the cool kids right now.

Your plan should not be to screw your customer

When we got to the Question and Answer part of the presentations, the audience poked and prodded at the companies, and it turns out that neither company really knew what they were doing.  The first company, which was a 100% web application based company, said out loud that they hoped to sign customers up for monthly billing and then they forgot about it and they were still being billed for it four years later.  This was right before they literally said “we don’t know what we are doing.”  I won’t go too much into detail here about some of their other perceived problems, but they had an uncommitted team of 7 people and their product was marketed to restaurants and bars at $7.99 per month.  Running the quick math on that means that they won’t ever make it.  But I digress…

The biggest issue is that they didn’t have any idea of what came next

They were making up answers as the questions came in…not in the answering it correctly off the cuff manor, but the way my 5 year old son does when asked if he broke something but doesn’t want to admit it.  They didn’t have a marketing plan, they think they are going to create a mobile app, they don’t know what market segment to target, they don’t know if they are going to do direct sales or internet sales….the list goes on, but what it boils down to is that they launched their product and that was their goal.

Where are you going with this

I bring all of this up in order to make a few points.  First off, technology people like to solve technology problems.  This is not a big surprise, but it goes along with the next point is that you are not starting a start-up, you are starting a business.  As entrepreneurs and aspiring entrepreneurs, we sometimes get stars in our eyes when we look at things like Twitter, Instagram, and Snapchat because we see that they created a technology solution and hit it big time. More people win the lottery than hit the big time like those applications.  The companies I saw present were solving technology issues, and were not focusing (or thinking about) building a sustainable business. They both came off as amateur and incompetent.

There is a lot that goes into this that you don’t see….that’s one of the reasons why I’m doing this

I have been planning for months.  I have notebooks filled with product descriptions, product plans, feature set lists by version numbers, etc.  For Product #5, I have gone through at least 5 rounds of product revisions (remember, it is a physical product) and I have been researching the US Patent process and talking to lawyers and accountants on how to establish this product as a business, not just a widget.  I still have tons of work to do with it before it is ready to be announced.

Product #4 I have had versions of it in production for a few years, but on a custom level.  The business requirements have been flushed out and the market has already been validated.  Productizing and packaging is the main hurdle for it.

These are just a couple of examples of what goes into the foundation of building a company.  You can’t just stumble upon an idea and turn it into a business.  You have to be deliberate, and you have to, dare I say, have a plan.  The plan may not hold up, but when the plan falls apart, you use that as a lesson.

You will fail.  Your plan will not work like you think it should.  Even though Savas Dimopoulos was speaking of particle physics at the time, his quote really describes what the life of an entrepreneur is really like:

Jumping from failure to failure with undiminished enthusiasm.  -Savas Dimopoulos