This post is part of a 7 part series:
- Competitive Research
- Look At Your Product Critically
- Draft Your Business Plan or Launch Strategy (this post)
- (coming up) Get a Sense for Your Brand
- (coming up) Build a Prototype If You Can
- (coming up) Budget Appropriately
- (coming up) Talk to Others About Your Product
Draft your business plan or launch strategy
This doesn't have to be a 50 page document. In fact, most people would tell you that's a waste of time today. I recommend starting off with one of the tools below:
- use the business model canvas
- create an ugly pitch deck
The reason I recommend tools like this is that at the beginning, it's all a guess anyway. Sure you can model your business after others to an extent, but unless you've run a similar business before and you're following your own playbook, it's still going to require mostly adaptation. In this post I'll use the example of a consumer product for the sake of painting the picture, but you can use these tools for any kind of product, your plan will just look different.
Business Model Canvas Example
I like the business model canvas because it forces you to look at the big picture without getting to tactical in any one area, which is an appropriate level of detail for how unknown the path truly is for most entrepreneurs. I won't go explaining it in this post because there are a plethora of resources on the internet like this one, this one, and this one that will teach you all about it. I will highlight 3 components that in my opinion, deserve extra attention for a physical product:
- Revenue Streams - revenue for a hardware company cannot be ignored unless you have a lot of sophistication and big time funding. Even then it's only applicable to some businesses, mainly SaaS companies that are enabled by the "giveaway" hardware. You're going to have a lot of costs in manufacturing the product so it's important to know what your first, second, and third revenue streams will be, and so on. For example, for a consumer product that may look like Kickstarter, Website Sales, then Amazon to scale up. For what it's worth, revenue streams can't really be understood without looking at cost structure also. Collectively you might call it your "financial model".
- Channels - this is how you reach your customer, and if you can't do that you won't sell diddly. Using the consumer product example, if your first revenue stream is kickstarter then what channels can you use to reach customers pre-kickstarter? Again - a lot is written on the internet about this, so do your research. Some of the top strategies include starting your social media accounts very early to build a following, building a mailing list using a website with a form and optionally spending ad dollars to drive users to it, and working a press angle to make sure your launch get's some attention.
- Key Partners - often overlooked in my opinion, it's very important to think about who your key partners are early on. You don't have to have them all nailed down from day one but think about the roles you will need and how and when you'll fill them. Will they be an internal hire or an outside partner like your manufacturer? A good book for walking you through an exercise like this is the EMyth revisisted.
Create an ugly pitch deck
In my opinion, a lot of time (including my own in a past life) is wasted making pitch decks look good. I think the less information you need on any slide in order to get the point across, the better. If you have a motivating story for why the solution matters and how you're the person/team to solve it, you're already doing better than the majority of founders. But this process isn't just useful for pitching to investors, it's also just a great way to think through your business model in a logical way.
I'm a really big fan of Guy Kawasaki's 10-slide approach which you can read about here. Sequoia Capital also has a 10-slide approach that might be even a little bit better (for example, I love that it includes a "why now" slide). The bottom line is this: you don't have to overthink it right now. Ten slides is more than enough. Your plan is going to change anyway. Get it on paper and be ready to adapt.