Up until around 2010, many startups would raise pre-product seed rounds using only an investor deck, idea, and the spark in their eyes. Those times are long gone. Today investors know that the cost of reaching a viable product (in many sectors) is low enough that serious founders will create their product, and initial traction, before seeking external funding. Continue reading “The Angel Investor Manifesto: why and how to invest in pre-product startups”
Lean Canvas is popular. It’s used to create a good strategy by breaking the business down into topics and challenging assumptions. The more time and effort one puts in it, the more value is created, and the main derived benefit is expertise in your business. Israelis are results-oriented, not process-oriented, therefore it is no surprise that Israelis suck at Lean Canvas. When an Israeli entrepreneur sees a Lean Canvas he tries to complete the page ASAP with little or no regard for depth. This hurts the entrepreneur in the long run and prevents generating any real business understanding. Bottom line, Israelis: leave the Lean Canvas alone and go back to writing full business plans.
What is a Lean Canvas?
The Lean Canvas is a popular term that everyone is using.
When you Google it, you see a single page that maps out many key elements of the business.
When you read about it, you learn that it’s a tool for the Lean Canvas process which is supposed to be a fantastic business tool.
What is its purpose?
The purpose is to create, and fine-tune, an investable strategy for the business.
At first, the Lean Canvas process seems easy – it’s just one page that needs to be completed, but that’s not how it works.
How does it work?
One is supposed to identify all the business assumptions, question them, and then validate or change them. Once done, everything is put back together in a way that makes more sense.
Business assumptions exist in all topics: need identification, solution usage case, target market, customer definition, business modeling, pricing schemes, distribution channels, and marketing.
Each subject is broken down into its many moving parts.
Is it hard?
The deeper the process, the more valuable it is. When done right, this single page represents hundreds of hours of thinking, analyzing, and validating.
When a lot of background work goes into the canvas, then the page only represents a fraction of what you know. The knowledge behind the canvas is immense.
When this is done seriously and systematically, this process will lead to many benefits.
So yeah… it’s hard.
What are the benefits?
- A management team with members that are true domain experts in their business
- Noticeable expertise in interactions with investors who know the space
- Better decisions in running the business
- A clearer understanding of options and choices along the journey
The Israeli entrepreneur’s undoing is being results-oriented
Israeli entrepreneurs are some of the best in the world. There have been so many startup success stories made-in-Israel that it has enhanced Israel’s national pride.
If you would put the Israeli entrepreneur’s DNA under a microscope you would find a results-orientated chromosome rather than a process-oriented chromosome. Don’t believe me? Try managing Israeli’s and then lets talk. Israelis thrive under high-pressure deadlines, not under what they consider to be bureaucratic processes.
Israelis are amazing at coming up with effective ad-hoc solutions to problems.
Israelis are not built for systematic process-oriented tasks.
So why is Lean Canvas a disaster for Israelis?
The Lean Canvas process is well… a process. When an Israeli sees the Lean Canvas, he doesn’t connect to the process; instead, he tries to complete the page as quickly as possible.
The goal of the Lean Canvas process is to create depth and understanding; it’s not a race to fill out a page.
Being results-oriented and not process-oriented is what makes Israeli’s suck at Lean Canvas.
What should Israeli entrepreneurs do?
Israeli entrepreneurs need to write a 25+ page quality business plan.
This will force a lean-canvas-like process by focusing on the result and ignoring the process.
A by-product of the long-form document will be the strategic depth that makes one investable.
It’s been ten years and 300+ business plans since I started writing business plans and looking back I have gained some insights about the process (and art?) of creating these ubiquitous document, no matter their form: executive summary, one-pager, investor presentation or strategic plan. Specifically, I have come to believe that a successful business plan comes down to nailing three (it’s always three, huh!?) major aspects: balance, storytelling, and attitude. I covered all matters of balance in part 1. This means it is time to talk about storytelling. Continue reading “Lessons from 10 years of writing business plans (part 2)”
I’ve recently looked back on my career (so far) and was somewhat surprised to discover that I have been in the business of writing business plans for almost a decade now (even more if you take into account business plans I wrote for myself for businesses I started 15 years ago). This seemed like a great opportunity to think about what the process of writing business plans has taught me over the years, and how it has changed both for me and for the industry as a whole during this period. Continue reading “Lessons from 10 years of writing business plans (part 1)”
A recent LinkedIn forum question by Amir Gelman, formerly of The Junction and now of 500 Startups, asked what is missing in Israel’s rich accelerator eco-system. I’ve been mulling this question over for the past few days. It’s not as simple as it sounds. The Israeli accelerator space is full of accelerators with great people helping dozens of companies each year reach their next evolutionary level faster. But there is something missing. I agree. Continue reading “Israel - so many accelerators, so why does it feel like something’s missing?”