Elements of a Sustainable Business & Business Plan — Sequoia Capital

“The best founders are clear thinkers. they don’t need many words, charts, spreadsheets or slides to express their ideas.”

Sequoia Capital

Sequoia Capital has a concise and strong little number on their website here. Printed below because I want to find this later, regardless of their “web content publishing strategy.”

Elements of Sustainable Companies:

  • Clarity of Purpose. Summarize the company’s business on the back of a business card.
  • Large Markets. Address existing markets poised for rapid growth or change. A market on the path to a $1B potential allows for error and time for real margins to develop.
  • Rich Customers. Target customers who will move fast and pay a premium for a unique offering.
  • Focus. Customers will only buy a simple product with a singular value proposition.
  • Pain Killers. Pick the one thing that is of burning importance to the customer then delight them with a compelling solution.
  • Think Differently. Constantly challenge conventional wisdom. Take the contrarian route. Create novel solutions. Outwit the competition.
  • Team DNA. A company’s DNA is set in the first 90 days. All team members are the smartest or most clever in their domain. “A” level founders attract an “A” level team.
  • Agility. Stealth and speed will usually help beat-out large companies.
  • Frugality. Focus spending on what’s critical. Spend only on the priorities and maximize profitability.
  • Inferno. Start with only a little money. It forces discipline and focus. A huge market with customers yearning for a product developed by great engineers requires very little firepower.

Elements of a Business Plan

  • Company Purpose. Define the company/business in a single declarative sentence.
  • Problem. Describe the pain of the customer (or the customer’s customer). Outline how the customer addresses the issue today.
  • Solution. Demonstrate your company’s value proposition to make the customer’s life better. Show where your product physically sits. Provide use cases.
  • Why Now. Set-up the historical evolution of your category. Define recent trends that make your solution possible.
  • Market Size. Identify/profile the customer you cater to. Calculate the TAM (top down), SAM (bottoms up) and SOM.
  • Competition. List competitors. List competitive advantages.
  • Product. Product line-up (form factor, functionality, features, architecture, intellectual property). Development roadmap.
  • Business Model. Revenue model. Pricing. Average account size and/or lifetime value. Sales & distribution model. Customer/pipeline list.
  • Team. Founders & Management. Board of Directors/Board of Advisors.
  • Financials. P&L. Balance sheet. Cash flow. Cap table. The deal.

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