Question of the Day:
Can your business mission be summarized on the back of a business card?
If not, then I want to make sure you all see this: Sequoia’s Gospel of Startups More True Than Ever. In it, Mike has republished Sequoia Capital‘s 1st Gospel for building successful startups called Elements of Sustainable Companies. it includes things like:
* Clarity of Purpose: Summarize the company’s business on [a] business card.
* Large Markets: Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.
* Rich customers: Target customers who will move fast and pay a premium for a unique offering…. etc.
Mike is right that these principles are even more important in the current market (and we’re glad others are fans of Teddy Roosevelt!)
But also I want to draw your attention to Sequoia’s 2nd Gospel, a list of tips for how to write winning business plans. In Writing A Business Plan, the firm says: We like business plans that present a lot of information in as few words as possible. The following format, within 15-20 slides, is all that’s needed.”. So here’s the list…
* Define the company/business in a single declarative sentence.
* Describe the pain of the customer (or the customer’s customer).
* Outline how the customer addresses the issue today.
* Demonstrate your company’s value proposition to make the customer’s life better.
* Show where your product physically sits.
* Provide use cases.
* Set-up the historical evolution of your category.
* Define recent trends that make your solution possible.
* Identify/profile the customer you cater to.
* Calculate the TAM (top down), SAM (bottoms up) and SOM.
* List competitors
* List competitive advantages
* Product line-up (form factor, functionality, features, architecture, intellectual property).
* Development roadmap.
* Revenue model
* Average account size and/or lifetime value
* Sales & distribution model
* Customer/pipeline list
* Founders & Management
* Board of Directors/Board of Advisors
* Balance sheet
* Cash flow
* Cap table
* The deal
That’s it! Straight form the burning bush otherwise known as Sequoia Capital! Good luck.