Increasing the Odds of Success

A fellow blogger recently pointed me to a study done by a couple of Harvard business professors (Gompers and Lerner) titled “Performance Persistence in Entrepreneurship”. This study looked at the track record of first and second time Entrepreneurs creating a successful enterprise. (Success was defined as taking the start-up entity public.) The results of the study were chilling to say the least.

They found that first time Entrepreneurs only had a 22% chance of success and for the 78% who tried it again the Entrepreneur was only 23 % successful in their next venture. They also noted that to a certain degree “success breeds success” - the successful ones who tried a second venture were 34% likely to succeed.

This Harvard research and a companion study done by CIBC World Markets in 2005 suggested that successful ventures had a number of consistent characteristics that made them over achieve. These traits included: a) High Level of Education (2 of 3 Canadian Entrepreneurs have post secondary education), b) Extensive Use of Advisers (Service Professionals, Board Advisers, Board of Directors), c) Outsourcing Strategies (Companies focused on core competencies and outsourced other non-core functions), d) Technology Enablement (Companies utilized Web presence, CRM software to enhance and support customer interactions) and e) Focus on US and International Markets (Canada is only the starting point).

This is where the Ontario Commercialization Network (OCN) comes into play. Eight of the 13 centres have been funded with an Entrepreneur In Residence (EIR). These individuals are seasoned executives who have build, sold and turned around a number of ventures in their careers. The role is to “accelerate the path to commercialization” for these early stage companies.

EIR’s in the OCN all have a unique and individual style in advising their clients on "creating the organization's traction". Supported by Provincial, Federal and Private funds, EIR's across the province rely on a core set of resources to support their clients. These include 1) Education and Reference material, 2) Extensive network of contacts and practical experience, 3) Market Research, 4) Executive Coaching and Mentoring, 6) Assistance in building a Compelling & Focused story.

Entrepreneurs are the key to Ontario’s innovation agenda and are encouraged to sign up with the Commercialization centre in their region. We need to do all we can to increase their odds of "Stunning Success".

Bright & Not Blurry Eyed Business Plans

I finally broke down over the weekend and attacked the stack of 5 Business Plans that I promised to read and comment on. They ranged in length from 15 to 80 pages and covered multiple industries and segments. My mind was whirling as I completed the last "...in conclusion" section. As I compared and contrasted the individual documents I was inspired to write a couple tips to help those Entrepreneurs with their next versions.


a) Capture My Attention Quickly - Perhaps its starts with your overarching vision, but find a clever way establishing and leading our interest in your product or service quickly.

b) Make it Easy to Read and Compelling to Turn the Pages - Think about that spy novel that drives you aborb the content and turn the pages as the plot unfolds.

c) Follow Business Plan Protocol - There are many protocols & templates out there and they all lead the reader through a time tested process. All of the heading and topics will need to be addressed so there are no short-cuts to be taken. One client suggested that since their product was so unique they had no competitors and "never would' - therefore they left the section completely out!

d) Cadence your Content with Appropriate Emphasis - A colleague of mine at MaRS - Andy Haigh (ahaigh@marsdd.com) has developed a 25 page format for the business plan. His rationale is simple - create something that the reader can digest in a single sitting - lean towards 25 pages rather then 60. The flow goes something like:

• Executive Summary (2-3 pages) - Company description, Value Proposition, Key Highlights
• Introduction (2-3 pages) - What is the problem that the company is trying to solve?
• Product & Technology (2-4 pages) - How does your technology solve the problem?
• Market Size (2-4 pages) - Start with the big numbers and narrow it down to your market.
• Go to Market Strategy (2-3 pages) - How do you plan on attacking the marketplace?
• Competition (2-3 pages) - How are you "better, faster, cheaper" ?
• Management (2 pages) - Do you have the team to make it all come together?
• Financial Summary (2-3 pages) - Financial Model, Investment Opportunity, Cash Flows.
• Strong Summary (1 page) - Re-iterate Key Points

e) Visualize at Every Opportunity - 25 pages of solid text will not work for your reader. Since a picture tells a 100o words - the photogragher or graphics designer are the world's most effective writers. Use charts, graphs, pictures, white space and section headings to help illustrate the points and focus the reader.

f) Proof Points - Do you have the customers, beta trials, strategic partnerships and trending financials to clearly demonstrate that you have it right?

g) Strong Finish - Having lead the reader through a compelling 25 page journey, re-iterate the key points to leave them with a lasting impresssion.

I have tried to capture in a few words what is clearly a significant art form. Have Andy and I missed anything? We look forward to your feedback.

Have you seen "In Business" on Rogers 10

In late June I had the pleasure to do some Live TV. David Wojcik the host and producer of In Business (www.rogerstv.com/inbusiness) had been at our Innovator Idol and was inspired to do the final show of the 2008/09 series on Business Incubators. I was joined on the program by Av Utukuri - the CTO of Nytric (www.nytric.com) - a company focused on "bringing exciting new ideas to life." David W facilitated a lively discussion in which AV described a number of the cool companies he was incubating in his Mississauga based office and I got to outline what we do at the RIC-Centre (www.ric-centre.on.ca) as part of the Ontario Commercialization Network. The In Business program was wrapping up for the season - but it will be back in September. If you live in Mississauga and have access to Rogers 10 I suggest you check out the summer re-run schedule. David has done a terrific job packaging a show that concentrates On Business, For Business and of course In Business. I look forward to David's new season and the opportunity to get some of my clients profiled on his program.