Comments on: The Virtues of a Three-Headed Business Plan http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/ Trusted Insights and Conversations on the Next Wave of Technology Tue, 24 Nov 2009 01:24:38 +0000 http://wordpress.com/ hourly 1 By: Deidre http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-928367 Deidre Sun, 22 Feb 2009 00:09:48 +0000 http://gigaom.com/?p=23396#comment-928367 Dan, Simple and brilliant! Some SBO's may be thinking this way - but not necessarily putting pen to paper and really creating the strategies to be ready to implement, depending on the scenario that unfolds. Deidre Dan,
Simple and brilliant! Some SBO’s may be thinking this way – but not necessarily putting pen to paper and really creating the strategies to be ready to implement, depending on the scenario that unfolds.
Deidre

]]> By: Rednod » The three kinds of CEO http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-903568 Rednod » The three kinds of CEO Wed, 08 Oct 2008 15:52:47 +0000 http://gigaom.com/?p=23396#comment-903568 [...] put buffers into your models. Instead of one complex model that itemizes cleaning supplies, make three rough ones—one for success, one for likelihood, and one for abject failure. Be open to one-offs and special [...] [...] put buffers into your models. Instead of one complex model that itemizes cleaning supplies, make three rough ones—one for success, one for likelihood, and one for abject failure. Be open to one-offs and special [...]

]]> By: Pete http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-903173 Pete Mon, 06 Oct 2008 14:55:16 +0000 http://gigaom.com/?p=23396#comment-903173 Nice write up, Daniel. I agree the "low / medium / high" approach to business planning is critical in the current environment, but also should occur in any economic climate, regardless of the weather (but enough of the odd eco-speak.) One point I'd add, though, is regardless of which scenario you find your business in, you should always have a measurement plan in place to make sure you're making the right decisions. I.e., in Marketing Plan A, is marketing really responsible for 120% of sales growth or is it due to product development? Likewise, if you're seeing a 5:1 ROI on some marketing programs, they should receive prioritization even when you're exceeding goals, not just when there's a shortfall. - Pete Nice write up, Daniel.

I agree the “low / medium / high” approach to business planning is critical in the current environment, but also should occur in any economic climate, regardless of the weather (but enough of the odd eco-speak.)

One point I’d add, though, is regardless of which scenario you find your business in, you should always have a measurement plan in place to make sure you’re making the right decisions.

I.e., in Marketing Plan A, is marketing really responsible for 120% of sales growth or is it due to product development? Likewise, if you’re seeing a 5:1 ROI on some marketing programs, they should receive prioritization even when you’re exceeding goals, not just when there’s a shortfall.

- Pete

]]> By: Edson T Pasi http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-903159 Edson T Pasi Mon, 06 Oct 2008 14:30:18 +0000 http://gigaom.com/?p=23396#comment-903159 Keep up the fire and good work Keep up the fire and good work

]]> By: Edson T Pasi http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-903155 Edson T Pasi Mon, 06 Oct 2008 14:23:45 +0000 http://gigaom.com/?p=23396#comment-903155 POWERFUL INFORMATION AND WOULD ALSO WANT MORE ON SMALL TO MEDIUM ENTERPRISES SPECIFICALLY. POWERFUL INFORMATION AND WOULD ALSO WANT MORE ON SMALL TO MEDIUM ENTERPRISES SPECIFICALLY.

]]> By: You are right http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-903000 You are right Sun, 05 Oct 2008 08:40:15 +0000 http://gigaom.com/?p=23396#comment-903000 You are spot on. The problem with most entrepreneurs (me) is that you only consider Plan A, and even if it's A- you will run out of money and fail. Plan B is even optimistic. C is really the best that you can hope for. D & F are far more likely. You need to plan for an enormous amount of cushion 3X Minimum to 10X Likely. 3-10X the cost, 3-10X the time, 3-10X the stress, 3-10X the effort, -(3-10X) the return, -(3-10X) the response to your product. It is VERY HARD to be successful... I should know. I have failed because I only planned for Plan A... You are spot on.

The problem with most entrepreneurs (me) is that you only consider Plan A, and even if it’s A- you will run out of money and fail. Plan B is even optimistic. C is really the best that you can hope for. D & F are far more likely.

You need to plan for an enormous amount of cushion 3X Minimum to 10X Likely. 3-10X the cost, 3-10X the time, 3-10X the stress, 3-10X the effort, -(3-10X) the return, -(3-10X) the response to your product.

It is VERY HARD to be successful…

I should know. I have failed because I only planned for Plan A…

]]> By: whackythinking http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-902913 whackythinking Sat, 04 Oct 2008 18:12:44 +0000 http://gigaom.com/?p=23396#comment-902913 i whole heartedly agree with what you're saying. i'm running a very early stage startup myself and its really not so much for putting into a business plan as it is an exercise for thinking about different scenarios and their contingency plans. Like you said, having thought about it before hand allows you to adapt to the situation quickly. Great writeup! i whole heartedly agree with what you’re saying. i’m running a very early stage startup myself and its really not so much for putting into a business plan as it is an exercise for thinking about different scenarios and their contingency plans. Like you said, having thought about it before hand allows you to adapt to the situation quickly. Great writeup!

]]> By: Curtis http://gigaom.com/2008/10/04/the-virtues-of-a-three-headed-business-plan/#comment-902908 Curtis Sat, 04 Oct 2008 17:11:13 +0000 http://gigaom.com/?p=23396#comment-902908 @Daniel, I think your write up is sound, however, I must point out that you've outlined the proper way to write a business plan. Any sound business plan includes contingencies, which are your scenarios. Strangely, the silicon valley entrepreneurial and investment community abandoned planning sometime in the 90's for "eyeballs" and clever "viral growth" tricks (spamming). Whereas solid business planning includes contingencies for reasonable outcomes. Worst case, as an entrepreneur you should be planning a business which can sustain itself as an ongoing concern. Perhaps one day we'll see the Silicon Valley looking at your companies and others that have sound business plans and organic revenue growth, and potential investors analyzing these companies for opportunities to grow and scale more quickly. Best, Curtis @Daniel,

I think your write up is sound, however, I must point out that you’ve outlined the proper way to write a business plan. Any sound business plan includes contingencies, which are your scenarios. Strangely, the silicon valley entrepreneurial and investment community abandoned planning sometime in the 90’s for “eyeballs” and clever “viral growth” tricks (spamming). Whereas solid business planning includes contingencies for reasonable outcomes. Worst case, as an entrepreneur you should be planning a business which can sustain itself as an ongoing concern.

Perhaps one day we’ll see the Silicon Valley looking at your companies and others that have sound business plans and organic revenue growth, and potential investors analyzing these companies for opportunities to grow and scale more quickly.

Best,

Curtis

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