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 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.