Long before a consumer buys a product, before a product is manufactured and distributed, and before investors buy in, there has to be a plan. The teams in this class are off to a good start because they already have identified their future customers’ needs. But before an idea can be pitched to investors, the team must answer in the affirmative these questions: Will it work? Can it be made? Will anyone buy it? Can the new company survive and thrive selling it?
Professor Patell again uses examples to illustrate how an implementation plan can answer these questions. He tells how a team from a former class proposed a company in India that would collect garbage bags littering the streets, heat them to a malleable state, form them into roof tiles, and sell them locally. Its implementation plan illustrated how the prototypes worked properly, the tiles could be made easily, there was a demand, and the company could thrive by employing locals to gather bags and make the tiles. The plan went further, stating growth intentions for the first five years of business.
Patell and Stuart Coulson, a coach for this and prior classes who has extensive experience with data communication startups, stress how important it is to start with the individual user and build the company up from there. The team should prototype a product and write a bottom-up, discovery-driven implementation plan that factors in not only end users but how the new company would create employment for materials suppliers, laborers who make the product, and lenders who provide credit to users. The team must determine not only the features of the product but how it can be manufactured, distributed, and sold, and it can count on hitting some snags. There are a lot of moving parts in implementing a business in a foreign country, Patell says, offering the example of one company that ran out of capital because of rules in India requiring a 30-day waiting period on wire transfers of money from outside the country.
The management structure of the nascent company also needs to be included in a successful plan. “Venture capitalists won’t fund you until you sort out the decision-making process,” Coulson says. One of the top two reasons startups fail, Patell adds, is due to a falling out among founders. The plan serves as not only a contract between team members but also a blueprint for the company’s direction.
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