In the last post I beat you to death about ditching your business plan but failed to provide an alternative. Okay okay, "Planning == Bad," but the supposed benefits of planning are still important: designing for profitability, understanding your customers and competitors, focusing your attention, deciding what's worth doing next, changing directions, and ensuring the founders agree on important issues. To help you, I'm stealing a trick from therapists.

Cartoon by Andertoons Therapists don't tell you what to do. Rather, they ask probing questions that get you to discover for yourself what is true for you, your situation, and what you want. You're smart. You'll make good decisions. But you also get bogged down in daily minutiae and putting out fires, meanwhile missing the big picture. That's where this article comes in: To splash cold water on your face, forcing you to face reality and continue to defend or change the important choices inside your business. What follows is your startup therapy session. Having to think through and answer these questions forces you to identify what you need to do today to seek profits and growth.

In one sentence, what does your product do and who buys it? In one sentence, why does someone buy your product? These are surprisingly difficult. The shorter and more precise your answers, the more you understand why you exist. If the answer is, "I honestly don't really know why people give us money," that's something to remedy immediately. If you have an answer, is it because you have hard evidence that this is how your customers perceive you and why they give you money, or just because you believe it? "Evidence" means emails and Tweets and testimonials that use those words exactly; otherwise you're likely interpreting their feedback to match your expectations. (I find myself constantly guilty of this disconnect.) If you don't have evidence, it is OK to have a hypothesis but you should be concerned about collecting proof and disproof. If you do know the answer, these two sentences should drive your marketing efforts. If these sentences aren't on your home page, why the hell aren't they? Is there anything else more compelling to potential customers? At the least, these represent the themes that drive your marketing campaigns. What one thing is most responsible for preventing sales? (e.g. people not knowing you exist, pricing, not enough product features, unorganized sales strategy, look-and-feel of website, haven't identified pain points, ...)

Cartoon by Andertoons Most little companies aren't honest about this, yet it's possibly the most important question you could ask. For example, I'm an engineer, so my first answer to "Why don't you have more customers?" is almost always:  "Because we need this feature." You hear some potential customer say "we will buy if you do XYZ" so you conclude that if you implemented XYZ people would start breaking your door down. But is that really the case? If you added one feature and maybe satisfied that one customer (assuming they wouldn't ask for a second thing, and in my experience they usually do), would that get you 100 more sales? For those hundreds of people who downloaded your software and never bought — is the reason "not enough features?" For the hundreds of thousands of people who never came to your website in the first place, or hit the front page and left after three seconds, is the solution "more features?" When you honestly ask yourself this question, it will naturally lead into things you can do right away to get more people to the site, into a trial, and/or into a sale. Don't just rest on what comes easiest. What's one thing you could do to get more feedback from customers, potential customers, or sales you've lost? You already know that external feedback is the only way to empirically determine how to build products people want to buy. Maybe you can't drop everything to solicit feedback (although folks like Eric Ries say you should), but surely it's worth one day every month to go out of your way to collection information from the field. To get the ideas flowing, here are eleven ways to get more feedback, most of which take less than a day to implement. If you had zero revenue from now on, on what date would you run out of money?

Cartoon by Andertoons The first thing this does is force you to nail down your monthly expenses and accounts payable. Second, you know the length of your fuse even in event of disaster (if you have revenue) or if you never manage to land a customer (if you're just starting out). More than that, knowing your "padding" as I used to call it is helpful in making decisions like "Can I afford to try this Risky Expensive Thing," such as making your first hire or trying a $20,000 media blitz. Whenever you're contemplating a new expensive idea that could be awesome but could be setting money on fire, your fuse date helps you know how much time you're risking — time to recover if your bet doesn't pay off. Finally, knowing "The day my business could die" helps focus your attention on activities that bring in revenue. If someone handed you $100,000 today, how would you spend it to maximize future profits? This gets you to crystallize what cost-centric activities would most help your business. We get caught up in free-but-takes-tons-of-time marketing and development activities — and most of the time that's a good way to think — but sometimes it's still true that "you have to spend money to make money." Sometimes the "thing you could do" is so compelling, it might mean you should raise a small angel round or consider debt. Typically it's best to get by with minimal debt and investment, but if the "thing you could do" is transformative, you might reconsider. If you were forced to hire someone today, how would you define her job such that she would contribute enough revenue to cover her expense? I know, you can't afford anyone right now, no one can do as good a job as you, and you don't even know that you'll ever hire someone. That's OK, that's not the point of this question. This gets you to ferret out what tasks are being dropped by the wayside because you've got higher-value things to work on, because you're having to fight fires, or maybe because you've got your priorities wrong. If you honestly can't imagine that there's anything a full-time person could do that would generate enough revenue to cover their salary, that's not a bad thing. But often this churns up one or two very-part-time tasks which really ought to be done but aren't. No need for a new employee of course, but maybe you should re-prioritize those tasks next month. Sometimes you come up with a good answer, which means you should contemplate help. "Help" doesn't necessarily mean a proper, 40 hours/week (OK, who are we kidding, 60 hours/week) employee. It could be a part-time consultant. It could be an intern.  It could be an outsourced office assistant. It could be a new partner willing to work for stock. Which of your business operations do you hate? Do you like creating new features but hate tech support? Enjoy product demos but hate cold-calls? Need to have your arms around company finances but hate bookkeeping? Love writing ads but hate dealing with ad sales agents? Get excited about your field of expertise but hate writing blog posts and Twittering? Part of why you're in business for yourself is creating something from scratch and delighting customers, but the fact is that most business operations just suck. You can't justify avoiding important tasks because they're not fun. I know — I'm the worst procrastinator when it comes to those things! It's useful to identify these undesirable-but-necessary tasks because you can do something about it:

If you shut off email, Twitter, chat, and the phone, and just buckle down, you might be able to get through some of these tasks in under 15 minutes. Bookkeeping is like that. Get it off your plate; you'll feel better. Mundane tasks might be outsourceable. I've found that "virtual assistance" services (like Four Star Service in Austin) are surprisingly affordable if you have a lot of little time-consuming tasks. See if your existing vendors are willing to do some of your tasks for a small fee. For example accountants often provide bookkeeping services at a lower hourly rate. Consider an intern or consultant. Before you argue that the cost is too great, factor in the lost revenue due to you working on those tasks. Can you share the burden with your co-founder or employees? Maybe they don't hate it as much as you do; you can trade hated activities. Or switch off.

If you're still stuck on not wanting to spend any money to save time, remember what Dharmesh says: Act as if someone is paying you $1000/hour for any activities that improve sales (making, selling, and your customer's happiness), and for everything else they're paying you $10/hour. It's accurate.  (Before you argue, don't forget about the cost of lost sales.)

What initiatives could be done half-assed without significant impact? I know, this is a shitty question. If you're like me, you are that aggravating combination of perfectionist and control-freak that on the one hand leads to stellar work but on the other hand means some things take too long. Some parts of your business are core to your success: Which features you implement, how you present yourself and interact with customers, discovering how and why people give you money. But the fact is your to-do list is infinitely long and you have to pick your battles. Your "Contact Me" page has to exist but it doesn't matter what it looks like. Every blog post doesn't have to be a work of art. Your Google Ads need variety (for testing), not hours of wordsmithing. It's better to have an eBook about anything than to have no eBook at all. If it can be done half-assed, and it's not going to impact revenue, maybe it should be half-assed. Allow yourself to delegate (because it's OK if it's not done exactly how you would do it). Push more out the door. If you could get one solid hour of advice from a guru you respect, what would you discuss and what would be the goal of the meeting? This is a fun way of asking: "What knowledge/feedback/direction is critical to your business right now, and which you're uncertain about, and which you feel other people are expert in?" Phrasing the question this way also leads to solutions. For example, maybe you should set aside 4 hours to get your hands on that guru's materials (blog, book, podcasts) and immerse yourself not just in advice but in their mindset. Or email them and see if you can get some advice! Or find other people that guru respects and who might be more accessible. Or hell, ask me! I publish my email address you know.

What tips do you have? Leave a comment!

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"You need a business plan" is the mantra of MBA types. As they say, businesses don't plan to fail, they fail to plan! Who could argue with such a clever turn of phrase?

Let's do some quotes:

"Without a business plan, how will you know whether you can make a profit?" (source) "A complete business plan should include five-year financial projections. These projections will assist investors with making decisions about your business and help you to know how much funding you will need to get things rolling." (source) "Many businesses fail due to poor planning. It is important for every business owner to understand the entire depth, flexibility, strength and weakness of their business plan." (source) "Adjust your business plan as needed, but be sure to not stray too far off of your original idea." (source)

Surely those Harvard MBA grads are correct! After all they don't give out those MBAs for nothing — you have to at least start a business yourself! Oh wait, you don't have to do that? Oh. Trouble is, this advice is inconsistent with how real (small) businesses operate, as you can often see for yourself in the same articles that promote the use of the business plan. For example, Kenrya Naasel writing for Latina.com starts by saying "A business plan is the most important document you'll ever create." (And you thought your website's home page was important? Ha.) But later she quotes a successful entrepreneur who admits "We operated with no real plan for years" and "Things don't generally go as planned." That's one thing everyone can agree with: Things don't go as planned. Yeah, so how are you supposed to write a three-year projection with a straight face? Or take Sean Davis of Success on my Mind who tells us "Writing a business plan is your most important step," but then admits that his past two (successful!) projects were "simply an idea I ran with." The telling part comes in the comment section where Sean adds: Now that I think back on it, I've done plenty of marketing that led sites to success... but it was all from trial and error. Had I known BEFORE what I know now, I could have had a plan and reached my goals much earlier." Here inlies the fallacy. You never "know before what you know now." If success is "all from trial and error," how exactly do you write a plan? Marketing is trial and error! Features, messaging, the path to customers, your competitive edge, your pricing model — all this gets figured out as you go. You can't know what's going to work ahead of time, so why is Sean concluding that he should have wrote a business plan? Business plans are just guesses, and they're almost always wrong. The very idea of "planning" is ridiculous:

If you had written a business plan in 2007, what would your assumptions have been? Investors love "Web 2.0," MySpace is how to reach young people, the economy is growing without limit, and products with demonstrable ROIs will get healthy slices of corporate budgets. Of course every assumption in your plan was reversed in 2008. The world economy exploded. Getting money from budgets is like squeezing water from rock. MySpace is dead, long live Facebook. The term "Web 2.0" is passé. Twitter went mainstream and might be more important for "word of mouth" than blogging. Good thing you spent all that time planning. At the beginning you don't know anything about what your business will look like. Your product will evolve to fit the market. You'll test marketing messages on AdWords and make unexpected discoveries about what works. Good and bad luck shape your company. You have no answers, no predictive power. Nor should you artificially pin yourself down! Even a "plan" buried in a drawer makes you less likely to consider the radical new idea that changes everything and makes you successful. Have you tried actually writing a plan? Go ahead, try it! Be sure to include your mission statement, your vision, your five-year profit-and-loss statement, decide who will be your key personnel, define your pricing strategy, explain the risks, position yourself against competitors. Now be honest, where did this data come from? I'm guessing you reached right up your ass and pulled it out. For the five-year plan you were so deep you tickled your spleen. You know this is crap; why are you doing this when you could, oh I don't know, just talk to potential customers?

But enough from me. What do VCs have to say about this? What if you're trying to raise money, don't you need a business plan? What do other entrepreneurs say?

From Venture Hacks, a great blog written by entrepreneurs-turned-VCs: "Don't send a business plan to investors. Nobody reads them and nobody executes them. ... Document your detailed plans on a napkin." From David Cowham, Bessemer Venture Partners: "Nothing slows down a VC as much as a comprehensive business plan." From Mike Moritz, Sequoia Capital in a Guy Kawasaki fireside chat, "Five-year plans aren't worth the ink cartridge they're printed with." I could fill three pages with links to 37signals railing against business plans (did you like that pun y'all?). From When was the last time you looked at your business plan: "[All three businesses] are still alive but have also completely rethought their original plans. They’ve changed focus, services, salaries, partnership arrangements, etc. ... If these companies' one year projections were so far off, imagine how worthless those year three (or five) projections turned out to be." Or, from The only plan is to learn as you go: "Stop presuming you can be right in a world of massive uncertainty. The only plan you should make is to plan on improvising." A study found that "quality of business plans had zero impact on the amount of VC funding being raised." From VentureBlog, VC David Hornik derides an article on Wired and TechCrunch about how to raise money: "VCs tend not to read business plans because a) they are too long and b) your business will likely have changed by the time anyone gets around to reading your business plan." From Business Insider, Kevin Ryan, founder of six companies, says "I don't do a detailed plan. If a VC focuses a lot on the details on the financial model, I won't work with them." From Steve Blank, "In the real world, most business plans don't survive the first few months of customer contact. And even if they did — customers don't ask to see your business plan." And then from an article called Startups are Inherently Chaos: "As a founder you need to prepare yourself to think creatively and independently, because more often than not, conditions on the ground will change so rapidly that the original well-thought-out business plan becomes irrelevant."

Do I really need to go on, or are you sufficiently bludgeoned into not writing that business plan? In fact, stop reading this article and do something useful like A/B test a landing page. P.S. Next week I'll provide some tips on what you should do instead of writing a plan. What do you think?  Is there value in writing a plan?  Leave a comment.

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Congratulations! You’re out in the real world, living on your own, holding down your own job, building your career one day at a time. You made it through high school, through college, through the job hunt, and now you’re here: at work! But you’re not entirely comfortable, are you? Something is slightly wrong with the world, but you can’t put your finger on it. You like your job, more or less. You like your company and coworkers, more or less. Your career seems to be on track. And yet you feel anxious, out of place, rudderless. I think I know what’s bothering you. The Past The first twenty years of your life have almost no similarity to the rest of your life, and the rest of your life can be a very long time. The crucial difference is that for the first twenty years of your life, your existence is highly structured, more than you ever realized. Every year, you move up a grade in school. Every year, you get a “promotion” complete with a new job title: Freshman, Sophomore, Junior, Senior. You get a new set of classes with new teachers, with new classmates. You get to choose some or all of your classes, every semester. You receive individual grades for each class, for each paper and test! Middle school, high school, college, grad school. You know the whole process from an early age, and there’s little question about your future. You can look ahead five, ten, fifteen years and know exactly where you’ll be. And there is a profound security in that kind of knowledge. The Present You’re at work. You were hired for a particular job for a particular boss at a particular company…and nothing’s changing. Title You have the same job title, year after year. If you are just starting out as a Junior Researcher or Assistant Developer, then maybe after one or two years you’ll get to be a regular Researcher or Developer. But then what? You may go five or ten years before you get another change in job title: Senior Researcher, Special Developer, etc. In school, your “title” changed every year, and that change carried with it a sense of progress, a sense of change and growth and importance. Now, you have no idea when you might be promoted, and it depends on the economy, on your coworkers, on your boss or clients or a hundred other things you can’t control. This can be frustrating. Feedback In school, you got grades on everything. Gold stars, check marks, letter grades, numerical grades, report cards, SAT scores. Constant, measurable feedback on how well you were doing on every little thing. You can develop a very clear picture of yourself with that much feedback. Good or bad, the knowledge is reassuring. But now, there are no grades. You submit reports and hear nothing back. You write drafts and get minor editorial notes. You develop software applications and just get tasks crossed off your To-Do list. At most, your boss says, “Good work” in passing. An entire year passes in this manner, during which time you feel adrift, nervous, uncertain. Hoping that you’re doing well, hoping your contributions are being noticed and will be rewarded. Finally, you have a performance review, an awkward and semi-formal meeting in which your one little mistake is blown out of proportion and you’re too nervous to remember all of your accomplishments. Activities Your life in school prepared you in just the wrong way for your life at work. In early school, your classes are chosen for you, the class material is outlined by the government (of all things). In later schools, you have some say in which classes you take, and what sports or arts you’re involved in. Then in college, a world a freedom! Of choice! You can pick all of your classes, pick your major, even invent a major! Study abroad, switch from economics to veterinary science just by filling out a form, play sports, start clubs, join a fraternity, take summer and winter classes. You’re in charge of everything! Then you get a job, and suddenly, all of that freedom is gone. At work, you do what you are told to do, on someone else’s schedule, to someone else’s standards, regardless of whether you think it’s the right thing in the right way. You have just fallen from the pinnacle of being in control to the depths of being controlled. The Future As I said, back in school you knew the shape of your future: where you would be, and when. But now, who knows? You can hope for a cost-of-living raise, you can hope for a performance bonus, you can hope for a promotion, but the bottom line is that you don’t know if they will ever happen, not for certain. Sometimes at interviews, you’re asked, “Where do you see yourself in five years?” This is one of the most ridiculous questions imaginable in our day and age. When you consider the unpredictable nature of our global economy, and the radical impacts of new technologies, it becomes more and more impossible to predict the future. Whole industries are springing into existence every day, and whole industries are becoming obsolete, albeit a bit more slowly. Unless you work in the military or the government, there is a high likelihood that you will work for many different companies in many different roles, reinventing your career and your goals as often as every five years. Some people find that fact unsettling, even frightening. Others find it exciting. The bottom line is that you start working as early as 20 and could still be working at 70, or later. That’s 50 years of totally unstructured career time. 50! Take a moment to consider how much time that really is, how much time you will spend muddling along and figuring things out for yourself. How to Cope

Be patient. The first thing you need to do is accept the fact that working life plays out much more slowly than school life. There are fewer changes, and they can be quite far apart. This is normal. Be yourself. Stop comparing your career path to those of your friends, your peers, and especially your parents. You are none of those people; you are you. It doesn’t matter if you’re in the exact same job as someone else. Your life, your work, your career is a completely unique thing of your own creation. It will play out at its own rate, in its own way. Focus on yourself, and let others take care of themselves. Be flexible. There is no way to predict what sorts of challenges or opportunities will arise for you, personally. Just being in the right room at the right moment could mean the difference between getting an exciting new assignment, or suddenly (and unpleasantly) realizing that you want to find a new job, or a new career path. Pay attention to the big picture, and remain open to the possibilities that present themselves.

Want something more concrete? Here are two examples from my own life:

I went to college to become an aerospace engineer, and left with a BA in English Literature. I have no idea whether one is any better than the other. I only know that I graduated with the skills and knowledge to support myself and my family in a career I enjoy, which is really all that matters. I took a job as an executive assistant. It was just supposed to be a way to pay the bills until I found a “really good” job, but I discovered a way to turn it into a “really good” job and spent the next six years publishing books and journals as an editor and artist for that same company.

Take the time to reassess what you are doing and your reasons for doing it. Where do you think your career is going, and why? Are you happy with where you are and your apparent progress along your career path? School taught you to follow a plan. But in life, and at work, no plan survives first contact with reality. The ability to adapt (and a sense of humor) will take you farther than any plan.