Business Plan – Executive Summary Importance

Guy Kawasaki answers the question: “What is the most important ingredient in a good business plan?”

The most important ingredient of a good business plan is the executive summary. This should be about two pages long and answers the basic questions:

– What do you do?
– What pain are you solving?
– Who is your team?
– What is your business model?
– Who is your competition?

Of this list of questions, the most important is the one about the pain you’re solving. It better be real, big, and obvious to get funding.

Groups are Smarter

Tim Bray points to an article in Wired by James Surowiecki:

Instead of looking to a single person for the right answers, companies need to recognize a simple truth: Under the right conditions, groups are smarter than the smartest person within them. We often think of groups and crowds as stupid, feckless, and dominated by the lowest common denominator. But take a look around. The crowd at a racing track does an uncannily good job of forecasting the outcome, better in fact than just about any single bettor can do. Horses that go off at 3-to-1 odds win a quarter of the time, horses that go off at 6-to-1 win a seventh of the time, and so on. Decision markets, like the Iowa Electronics Markets (which forecasts elections) and the Hollywood Stock Exchange (which predicts box office results), consistently outperform industry forecasts. Even the stock market, though it’s subject to fads and manias, is near-impossible to beat over time.

By contrast, while it’s clear that some CEOs are excellent leaders and managers, there’s little evidence that individual executives are blessed with consistently good strategic foresight. In fact, in an extensive study of intelligent CEOs who made disastrous decisions, Dartmouth’s Sydney Finkelstein writes, “CEOs should come with the same disclaimer as mutual funds: Past success is no guarantee of future success.” Even when executives are smart, they have a hard time getting the information they need – at so many firms the flow of information is shaped by political infighting, sycophancy, and a confusion of status with knowledge. Hierarchies have certain virtues – efficiency and speed – as a way of executing decisions. But they’re outmoded as a way of making decisions, and they’re ill-suited to the complex strategic landscapes that most companies now inhabit. Firms need to aggregate the collective wisdom instead.

One intriguing method of doing this is to set up internal decision markets, which firms can use to produce forecasts of the future and evaluations of potential corporate strategies.

3 Ps of SOA

Phil Wainewright writes how process, profile and policy make up the three pillars of service-oriented architectures:

Process is the part of the application that performs a function. This is the only element that must always remain coded in software. The other elements are purely information.

Profile is where information about identity is stored. It defines the name, location, rights and roles of each entity that participates in an application.

Policy defines when and how a process should be applied. It is the most valuable element of an application, because it is where the core business logic resides … An application matches process to profile in accordance with policy.

101 ways to improve your News Site

From the list prepared by Jonathan Dube:

  • Post a form at the end of a breaking news story asking witnesses to send in details of what they saw and then add the information you can verify to the story.

  • Invite anyone in your community to write Weblogs for your news site.

  • Take the best content from Weblogs on your news site (now that youve got so many) and publish them in your newspaper.

  • Integrate headlines from your competition into your Web site.

  • Create deals with other newspapers in your state to share content at no cost. Then stop paying for The Associated Press and hire new newsroom staffers with the savings.

  • Create games around the news for wireless devices.

  • Get the people behind the glass doors to require that at least 10% of all deals print/TV-side ad sales folks make include online components or else they dont get their bonuses.

  • Give everyone in your company one day off a month to work on whatever project they want or simply just brainstorm new ideas

  • Spyware

    The Economist sums it up nicely — Spam:Email::Spyware:Web.

    Spyware is software that sneaks on to your PC, tracks your online activities, and occasionally splashes pop-up advertisements across the screen. It is more than a nuisance: such software is, in effect, hijacking your PC, monitoring your internet use and unilaterally opening browser windows. Some spyware also harvests personal information, such as your e-mail address and locationor even your credit-card details.

    Spyware that monitors a user’s online activities and triggers advertisements in response is present on over 4% of computers, according to one study. The top three spyware firms claim their software is installed on around 100m PCs. Yet most users are unaware it is there. That is because the software is usually installed in a bundle with other programs, such as the peer-to-peer file-trading software with which many internet users swap music. Another kind of spyware automatically installs itself when a user merely visits a particular site, a trick known as drive-by downloading. Having sneaked on to a PC, spyware applications can severely degrade its performance. Mostly, it is very difficult to remove; some programs are even designed to make removal as hard as possible.

    The most nefarious forms of spyware steal information such as credit-card numbers or passwords by monitoring every keystroke a user types. This kind of software is already illegal, and is relatively rare. Much more common, however, is advert-triggering software, produced and distributed by software companies operating in a legal grey area, who prefer to call their products adware. There is real money to be made in hijacking screen real-estate and selling it to advertisers: the largest adware firm, Claria, had revenues of $90.5m in 2003 and recently announced plans for an initial public offering.

    The analogy with spam is informative. If legislators had acted sooner, it might have been possible to prevent spam from spiralling out of control. Does that suggest that legislation against spyware will also prove ineffective? Not necessarily, because the people behind spyware are a centralised and traceable group of companies, unlike spammers. Lawmakers have an opportunity to nip spyware in the bud, and help to ensure the integrity of the internet. They should take it.

    Globalisation and India

    Thomas Friedman writes about the rising aspirations of the Indian people:

    If you want to understand why the antiglobalization movement which was always a mishmash of groups and ideologies has lost its edge, you should study the recent Indian elections. And if the antiglobalizers want to understand how they could again become relevant, they should study those elections as well.

    To everyone’s surprise, India’s elections ended with the rightist Hindu nationalist B.J.P. alliance being thrown out and replaced by the left-leaning Congress Party alliance. Of course, no sooner did the B.J.P. which ran on a platform of taking credit for India’s high-tech revolution go down than the usual suspects from the antiglobalization movement declared this was a grass-roots rejection of India’s globalization strategy. They got it exactly wrong. What Indian voters were saying was not: “Stop the globalization train, we want to get off.” It was, “Slow down the globalization train, and build me a better step-stool, because I want to get on.”

    “Every time an Indian villager watches the community TV and sees an ad for soap or shampoo, what they notice are not the soap and shampoo but the lifestyle of the people using them, the kind of motorbikes they ride, their dress and their homes,” says Nayan Chanda, the Indian-born editor of the invaluable YaleGlobal online magazine. “They see a world they want access to. This election was about envy, anger and aspirations. It was a classic case of revolutions happening when things are getting better but not fast enough for many people.”

    My own recent travels to India have left me convinced that the most important forces combating poverty there today are those activists who are fighting for better local governance. The world doesn’t need the antiglobalization movement to go away now it just needs for the movement to grow up. It had a lot of energy and a lot of mobilizing capacity. What it lacked was a real agenda for helping the poor. Here’s what its agenda should be: Helping the poor by improving governance accountability, transparency, education and the rule of law at the local level, by using the Internet and other tools to spotlight corruption, mismanagement and tax avoidance. It may not be as sexy as protesting against world leaders on CNN, but it is a lot more important. Ask any Indian villager.

    Let’s hope the Indian politicians get the message. It is so frustrating to read about some of the regressive statements that have come out. It is so easy to do the right thing. It takes a lot of effort to mess things up. As I was telling someone, “There are only three places in the world where Communism now exists: West Bengal, Kerala and Cuba.” The problem is that the left-leaning policies now threaten to become mainstream in India.

    This is the time Manmohan Singh and Chidambaram need to act tough. They may not have a full mandate, but the message, as Friedman puts it, is very clear. And it is now what the Leftists want. It is more of what the Congress and the BJP have been doing.

    The next Indian Budget in the first week of July will give an indication of which way the winds will blow in India.

    TECH TALK: Good Books: The Art of Profitability

    It is every entrepreneurs dream to build a company like Wal-mart, Microsoft, Starbucks, eBay, Intel, Dell or Google. Business plans are strewn with references to these companies every entrepreneur wants the business to become the Microsoft of .. And yet few manage to do it.

    Making a business profitable and then growing the profits is one of the greatest challenges of business. Losses and profits are both habit-forming. I have gone through both scenarios in my entrepreneurial career. Running up monthly losses can be quite depressing. It saps energy and morale, besides the obvious cash. At times, it is much easier starting small, and making and keeping a business profitable than taking a loss-making business and turning it around. Once a business is profitable, the task then is to look at how to grow the bottomline and topline. It is like a game of chess combining strategy with execution on the ground, and little margin for error against smart opponents (competitors).

    Adrian Slywotzkys The Art of Profitability is a concise, little book that focuses on how to grow profits. Adrian comes with 23 business models. Narrated in the form of a conversation between an extraordinary teacher (David Zhao) and a senior executive (Steve, from a company called Delmore), the book is an easy read but packs a lot of thought into its chapters. There is also reading material for each chapter. The authors recommendation is to read one chapter a month, and then play with the ideas discussed.

    From the books description: What do Barbie dolls, Nokia phones, and American Express credit cards have in common? They all represent a powerful business model called pyramid profit. How about Intel, Microsoft, and Stephen King? They all exploit another model called value chain position profit. THE ART OF PROFITABILITY reveals the invisible but important governing principles that can mean the difference between business failure and success. Writing with wit and provocative insight, bestselling author Adrian Slywotzy tells the story of eccentric strategy teacher David Zhao and his young student. Each of the book’s twenty-three chapters presents a lesson from the exuberant and always challenging master-and a profit paradigm that will open your mind to the many ways to make profit happen. You’ll understand-from a different perspective-how your company and your competitors generate profit…which business models can be best applied to your profit-making strategy…what specific actions your organization can take in the next ninety days to improve its bottom line…and more. With scores of examples from today’s global marketplace, a weekly assignment, and an eclectic business reading list ranging from Obvious Adams to Einstein’s Dreams, THE ART OF PROFITABILITY invites anyone in business to engage in the lively exchange between mentor and protege. Enter the classroom. Discover the art. And learn which form of profitability will help your company succeed today and grow tomorrow.

    Losses or a lack of growth can enervate even the strongest of companies. Stagnation can cause a downward spiral from which it is hard to recover from. That is where one needs to look creatively at what we can do to build and grow profits at the companies where we work. This is where The Art of Profitability comes in. [You can read the prologue of the book here.]

    Tomorrow: The Art of Profitability (continued)