The Global Journey of an Asian

My 15th book The Global Journey of an Asian outlines my journey from being a professional into an entrepreneur. The book launched on January 9th is available at the book stores www.amazon.com and www.mphonline.com Many readers have called to discuss some key ideas prompting me to start writing this blog knowing fully well I am an occassional blogger but I hope to share some dieas through this blog. Writing a business plan is important for a successful entrepreneur. management professionals call it codifying the idea. Herein I quote some ideas from a great interview from the Harvard Business Review. Harvard Business School Professor William A. Sahlman's article on how to write a great business plan is a Harvard Business Review classic, and has just been reissued in book form. He says: •A business plan can't be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change. •The people making the forecasts are more important than the numbers themselves. •What matters is having all the required ingredients (or a road map for getting them), not the exact form of communication. •The best money comes from customers, not external investors. Bill Sahlman says: 1. Writing a business plan is a seminal moment in the life of a new venture. Doing so entails committing to paper a vision of the factors that will affect the success or failure of the enterprise. People take the exercise very seriously and get emotionally invested in what they produce. 2. A business plan can't be a tightly crafted prediction of the future but rather a depiction of how events might unfold and a road map for change. I emphasized the notion that successful entrepreneurs constantly seek the right mixture of people, opportunity, context, and deal. They anticipate what can go wrong, what can go right, and they try to balance risk and reward. 3. Business plan writing is not science — it's art and craft. 4. It is important to emphasize the importance of controlling your destiny by being conservative about access to capital. Many great ventures in the Internet era (pre-1999) ended up failing because they assumed they would have continued access to cheap capital. Many of those businesses failed, though the underlying idea was sensible. Similarly, we have seen a period when capital markets got ugly, which has a negative effect on all ventures, sensible and nonsensical. 5. He reinforces the idea that entrepreneurship is critical around the world. We are confronted with many crises from health care to the environment to global poverty. Solutions are likely to come from talented private sector and social entrepreneurs. 6. Business today is global. Take a company like Skype. When I visited Skype several years ago, it had 125 employees from 23 countries. The development team was in Estonia, and its headquarters in Europe. Skype had raised seed capital in Europe and in the United States. That's the new model. 7. What matters for a good business plan is having all the required ingredients (or a road map for getting them), not the exact form of communication. On the first floor of the Rock Center at HBS there is a copy of the original business plan that Arthur Rock wrote for Intel some 40 years ago. It's only a few pages long, but it describes an outstanding team pursuing a new technology. I have seen compelling business plans in the form of a few PowerPoint slides, a couple of scribbled pages, and a brief video. 8. I think entrepreneurs, investors, and employees need to be suitably skeptical about what they read in business plans. I have read perhaps 5,000 plans and have only seen three companies really meet their plan. That sounds like a pattern to me. If anyone makes a bet based on the company doing exactly as written, he or she will be sadly disappointed. At the same time, every player has to be somewhat optimistic about the possibility of overcoming inevitable setbacks. I think of ventures as roller coasters, not rocket ships. 9. The best money comes from customers, not external investors. I think entrepreneurs need ideas that are so compelling they can get early money from customers. I also believe that great teams with great ideas can continue to access capital on quite attractive terms from outstanding investors. If the short term looks unsettled, that often means that focusing on the long term has a big potential payoff. 10. Entrepreneurship is a blend of ideas, persistence and execution. The Global Journey of an Asian is available at the book stores www.amazon.com and www.mphonline.com