Originally from Hawaii, Guy Kawaski, best-selling author of The Art of the Start and successful entrepreneur, is
well known for his connection to Apple
as “chief evangelist” and later as an
Apple fellow( guykawasaki.com). He has also led many a software company as a
result such as ACIUS, Fog City Software , and later really got involved with
investing and other venture capitalists with his creation of Garage Technology Ventures and Alltop. ( guykawaski.com)
In his blog, How to Change the World: a practical blog for impractical people , he clearly explains his stance on the “Art” of the business plan. According
to Kawasaki, The business plan is a necessary step in the formation of a solid
business, but not for the reasons you may think. Perhaps you have been taught
that the purpose of the plan is to convince investors to support your venture. Although
that may be part of the purpose, Kawasaki says that for many investors the
decision whether or not to invest is made during the sales pitch where the plan
is presented, rather than from reading the plan itself. The purpose of the
plan, in his mind, is to help the creators of this start up to solidify all of
the details, to help have a firm grasp of the “who, what, when , where, why,
and HOW” a business should be created, run, and become profitable before it
ever comes into existence.
What are investors looking for?
Investors, while reviewing a plan, are looking for well-written
copy with a consistent flow that has clearly been written by a single author.
Kawasaki believes that the most effective business plan is a n elaboration of a
powerful sales pitch. It is only effective if it addresses these key areas:
“Executive Summary, Problem, Solution, Business Model, Underlying Magic,
Marketing and Sales, Competition, Team, Projections, Status and Timeline, and
Conclusion”.( blog.kawasaki.com) with the Executive Summary as the most crucial
portion. The Executive summary is your “hook”. It is the first thing that your
investor reads and should get them to want to buy whatever it is you are selling,
immediately. Without that initial buzz, why keep reading? Get them to want to
know more. Kawaski’s “ no-bull’ approach to business helps people to get to the
point. and fast.
Mr. Moritz has a slightly different stance. He believes that
business plans are unnecessary in the creation of a new business. "You
don't need fancy business plans. An email works fine. If it's a startup
company, no one is going to believe the financial projections (anyway)." (Shinal,
2010)
Michael Moritz is a venture capitalist with Sequoia Capital.
As a former employee of Time Warner and co-founder of Technologic Partners with
an M.BA. from Wharton, Mr. Moritz has served as director and former director of
: Yahoo.Inc, Zappos Inc, Atom Entertainemnt Inc., Weatherbug Inc., Sugar Inc.,
Google Inc, Kayak.com, and currently LinkedIn Corporation. (Bloomberg
BusinessWeek)
He is more concerned with the quality of the entrepreneur
himself than the prose of the business plan. He key things he looks for when evaluating
a venture is the entrepreneur’s desire, the hunger has for problem solving, and
the “mastery of subject” (Shinal, 2010). He needs to know that the entrepreneur
is going to do everything in his power to make a venture succeed, knows his
business well and can identify a problem to be solved knowing that his future
business is the solution.
References:
Shinal, J. ( 2010). What Moritz of Sequoia wants in an Entrepreneur. FINSTechnology. Retrieved March 31 2012 from http://it-jobs.fins.com/Articles/SB129226990799066177/What-Moritz-of-Sequoia-Wants-in-an-Entrepreneur
*quote by Clayton Christensen as told by Guy Kawasaki
