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By Mark Zimmerman

Lean start-up: Not a mantraOver the last couple of years the “Lean Startup” movement has taken the start-up world by storm.   It’s rare now for me to meet with a web or mobile client who isn’t at least using the jargon; they are all building a minimum viable product, “getting out of the building” and are prepared to pivot.

As I get to know these founders and their businesses better I find that some of them have missed what I think is the key insight of the model. A start-up is a series of experiments.  Or, as Eric Reis more elegantly put it, “The ultimate goal of a lean startup is to identify where its vision intersects with what reality can accommodate.”

These founders have built a prototype, they are showing it to potential customers and they are prepared to change the prototype based on customer feedback.  What they haven’t done is design an experiment that will yield “validated learning“.  In order to achieve that they need to borrow from the scientific method and break their business idea into a series of hypotheses and experiments to test them.

One effective way to do this is to use Ash Maurya’s Lean Canvas (a variant of the Business Model Canvas) to document a business hypothesis and then design experiments to test the assumptions in each box.

Until a start-up has a documented model to test, “Lean Startup” is more mantra than method: A bunch of tactics instead of a strategy.  Don’t get me wrong, getting outside the building and talking to customers is a good use of time for most founders, most of the time.   Talking to customers to test a key business model assumption is a great use of time.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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By Tim Scott

Part 1

You have a revolutionary business idea – an innovation that will change the world! You just know people will knock down your door to buy your product … but you need some financial support to make your dream a reality. So, what’s next? Do you go to your local bank and share the good news? Do you talk to your friends, neighbors and family about your prized idea? What about finding one of those Angel or Venture Capital investment companies who have all the money and ask them to help out? You could, but actually finding funding for your product or idea should really happen in the later stages of your planning – think if it as Stage Two.  First, let’s look at the elements of Stage One – Your Plan.

A strong plan is critical if you want others to buy into your idea, so let’s break down the “Top 10 Things You Must Do to Secure Funding for Your Business”.

Number 10 Have a detailed Business Plan

I’ve worked with a host of companies over the years that completely overlook this necessary step.  A Business Plan is a detailed document you prepare to outline everything about your business; management team, market, product offering, financial overview, etc.  Yes, I know, preparing a Business Plan is a huge effort. But that’s the point. Without all the effort and subsequent detail that comes from researching, writing, and evaluating, you will miss key information – those ‘ah-ha’ moments you will undoubtedly experience while preparing a plan. There are a number of business plan templates you can download from the Internet. Get searching and start building your plan.

Number 9 Be clear about your Financial Requirements

How much support do you need? How will the funds be used? Can you identify an appreciable difference that ‘X’ dollars vs. ‘Y’ dollars will have on your company’s success? The expectation of any lender, whether personal or institutional, is that you have explored every option, considered all the pluses and minuses of your funding requirements, and have settled on the most optimum financial need to support your company path.

Number 8 Create an Elevator Pitch

Can you to describe your business idea in 30 seconds or less? It may sound challenging, but taking the time to craft your story – who you are as a company,  the products or services you provide and who you’re selling to – will give you the ability to clearly articulate your need. Be succinct, be engaged, be a leader and be you. Lenders will buy into you as much as the product or idea you have. Clear communication leads to action.

Number 7 Present the strengths and weaknesses of your Management Team

Take a critical view of you and your team. Do you collectively have the requisite skill sets to make your plans happen? Where are the gaps in your team – experience, education, and knowledge – and what will it take to fill those gaps? Lenders not only review your business plan, they also look at the leader and management team to see if the planning can be executed. If you don’t have an accountant, find one who understands the ins and outs of financial planning – one that can help you successfully navigate the lending minefield. Whether you have the necessary skills to lead this new venture, or not, be transparent with your lenders.

Number 6 Define your Business Strategies

Arguably, this is the most difficult element of the planning process to work through. Too many times individuals or companies take short-cuts and don’t define exactly how they plan to move forward. Take the time to identify the vision you have for the product, and be sure you create an execution plan – complete with specific activities and strategies you will deploy to achieve your vision. Most importantly, define how you plan to monitor the entire process. The stronger the business strategy, the easier it is to keep your company tracking to your plan.

Well, that’s all for now. My next post will include the final countdown to the all-important Number 1 – the must-not-miss information that will help you succeed in securing that ever-evasive funding.

Of course, if you can’t wait, you can give me a call, Tim Scott, Entrepreneur-In-Residence at the RIC Centre to discuss your revolutionary business idea in person! You can reach me at 905-273-3530 or email me at tim.scott@riccentre.com

The RIC Centre (Research, Innovation, Commercialization) is a non-profit organization that provides business and technical services to small and medium enterprises (SMEs) to commercialize their innovation. Tim Scott is the RIC Centre’s Entrepreneur in Residence. In his capacity, he meets with early stage companies and advising them on moving their business models to the next level. RIC’s interests reside in the aerospace, advanced manufacturing, emerging technologies and life sciences sectors. Visit http://www.riccentre.com for more information.

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By Mark Zimmerman

mapWhere are you going?

When I first meet a new client here at MaRS my first question after hearing the overview of their business idea is often “What does success look like to you?”  I’ve been surprised by how often I get a blank stare or a cliche in response.

At the risk of being cliche myself: If you don’t have at least a general vision of where you want to go how can you make smart decisions on how to get there?

There are lots of factors that make entrepreneurship appealing: the autonomy, the creativity, the excitement and energy, the joy of working with smart people you respect, the reward of building something great from nothing and the possibility of creating wealth.   Understanding the relative weight of these is important both at the start and as you share your vision with others.

It’s particularly important that co-founders, early employees and investors all agree on the destination.  And that you revisit the topic and confirm that alignment regularly as your business evolves.

Mark advises entrepreneurs in the information technology, communications and entertainment practice at MaRS. He specializes in B2B enterprise software, SaaS business models as well as security and privacy.

The RIC blog is designed as a showcase for entrepreneurs and innovation. Our guest bloggers provide a wealth of information based on their personal experiences. Visit RIC Centre for more information on how RIC can accelerate your ideas to market.

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2“Using Market Intelligence as Your Strategic Weapon” is the next “Growing Your Business” seminar, held Nov. 18  at a new location this month in Brampton. The monthly workshops are hosted by RIC Centre (Research Innovation Commercialization Centre) and the Ontario Centre for Environmental Technology Advancement (OCETA).

This session, held at the Rose Theatre, located on 1 Theatre Lane in Brampton, will explore the value of market intelligence as a strategic advantage for entrepreneurs.

Three excellent speakers are on board to explore  this subject.

s3-portrait-ckoenigChristine König, Managing Partner at König & Consultants Inc., studied biochemistry in Goettingen, Germany, where she received her PhD in Cell Biology. Her first entrepreneurial activity was to custom develop genetically modified mice that serve scientists as models for human disease. Later, she transferred that knowledge into a research firm developing state-of-the art breast cancer diagnostics. As an entrepreneur Christine has personally experienced the rise and fall of great ideas, potential markets, and partnerships.

s3-portrait-alexanderIsabel Alexander, Vice Chair, Fielding Chemical Technologies Inc., founded Phancorp Inc., a small chemical wholesaling company that became a global standard for the chemical industry. On August 1, 2009 Phancorp Inc. merged forces with Fielding Chemical Technologies Inc. to provide Cradle to Cradle Care of Chemicals. Isabel now serves as Vice Chair, Fielding Chemical Technologies Inc. Since 2002, Ms. Alexander has been recognized as one of Canada’s Top 100 Women Entrepreneurs and in 2009, she was the recipient of the International Women of Influence Award for Emerging/Growth enterprises.

s3-portrait-srinivasanUsha Srinivasan, Director, Market Intelligence, Market Readiness Program, and her team of industry specific and information specialists provide quality and timely market intelligence to entrepreneurs in Ontario through the MaRS Market Intelligence Services. Prior to joining MaRS, she worked at Frost & Sullivan, a leading global market research and consulting company. She has technical and industry background in the water, environment and building technologies space, having worked with global clients such as GE, Siemens, IBM, Honeywell and Brita.

For more information visit  www.riccentre.com. Or  Register here, For further registration details, please contact Sharon Dotan at sharon.dotan@ric-centre.on.ca

Registration deadline for the event is November 17, 2009.

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ken sweeneyBy Ken Sweeney

Post Labour Day can be a great time for strategic planning as children are back to school and employees are back from summer holidays.

With four months remaining in the calendar year and with hopes of a better economic picture in 2010, now is the time to engage management and get your company focused on the task at hand.  But what are the tasks at hand and what are the tactics required for execution?

Step 1: Ownership needs to be committed to the planning.  Without this, planning becomes a useless exercise.  Next, determine who else needs to be involved in the process to establish buy-in and to aid with execution.

Step 2: Schedule time (and plenty of it!) and a place.  I recommend getting out of the office to an alternate private location – without BlackBerries, in order to keep everyone focused.  This may also allow the opportunity for team building, such as dinner or a golf game afterwards, which is never a bad idea to keep employees motivated!

strategyStep 3: Develop a game plan!  This includes a detailed agenda highlighting the areas on which management would like to focus.

These areas may include business development, macro environment impacts or opportunities, human and capital resources, operational challenges and solutions.

Ownership is looking to scope out its overall objectives for the coming period with the tactics to support the execution of those goals.  Note: agendas should always be e-mailed out at least two days in advance as this gives the attendees a chance to digest and reflect upon the topics!

Step 4: Record the minutes and assign tasks. All key points and action items should be recorded into a concise document. This document should be sent out to all stakeholders in a timely fashion as it becomes the road map for the company over the established period of time.  Benefits will include measurement of progress and success and buy-in and accountability from management.

Remember, there is never a bad time to step back and revisit your strategy so post Labour Day is as good a time as any!

Ken is currently the acting CFO for K&K Recycling Services, a Pickering, Ontario-based ferrous and non-ferrous scrap metal processing, brokering and recycling company operating in Canada and the United States.  He is also a founding partner of Growth Equity Partners whose focus has been to support small to medium sized private and publicly listed companies execute transformational business initiatives since 2001. Visit www.growthequitypartners.com

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