Our plan for the first six months and how to measure our progress?

It is easy to be busy, go through days and weeks, feel exhausted, and yet get absolutely nothing of substance done. It happens day in day out across many large companies and organizations. You can also do the same when you are on your own, starting a company. You can still be busy (doing things), even be efficient (doing things well), and yet not be productive (doing the right things). The efficient busy-bee syndrome is shared between large, established companies and startups alike. However, there is a big difference between the two: When you are busy but not productive and working for a large company, you can blame it on leadership and lack of strategy.  But when you are on your own, you have no one to blame for! The problem is that a large company can afford having an army of efficient busy-bee - at least in the short term it can. But a start-up, not only it cannot afford to be efficient busy-bee, being efficient and busy and not productive will cause an early failure before the startup can even get a chance to get started. How can you avoid that as a founder? Have a plan, act on your plan, measure progress and learn from it. Today's post is about our plan for the first six months and how to measure our progress?

We are calling our first six months "phase zero". It is the period we will build our product to get from zero to one paying customer. At its core, this is similar to commonly know phase of building a market-ready product. But, there are two differences between what we are building and  a market-ready product. We want to build a market-ready product that meets two criteria:

1. At least one customer is willing to pay for it (as a proof of value)
2. And, it is designed to scale (as a driver of growth)

​Let's dig a bit deeper... 

Why "one" paying customer?

As a former corporate strategist and an avid investor in stocks of publicly traded companies, I do not invest in a company that does not have a path to making money.  Having a product that someone is willing to say yes to in the form of hard-earned cash proves to us that we have something of value to start with. It is controversial at first, because many startups did not have a business model when they started and they are successful now (Facebook!). Imagine how much more or how sooner they could have been successful had they planed for being valuable from the beginning. As a side note, an advantage we have compared to many other startups is that we are founded by business savvy people (ahem, I'm talking about myself) and we have the luxury of addressing the "business model" question early on. Lastly, getting from zero to one paying customer means a significant growth rate. Much bigger than what you can imagine (zero denominator) and a bigger-than-what-you-can-imagine is what we want.

Why designed for "scale"?

Scale drives growth. We do not think "small is beautiful"! We also do not want to be just big.  We do not plan to meet a certain dollar threshold, count of employees, or even investment capital target. Those are good targets when you are planning to become large. We want to design for scale. You cannot build a product that someone is willing to pay for it, but to replicate it you need lots of resources (investment dollars, hands or brains). That means, there will be a huge gap between your first paying customer and the 1000th. I hear you are counter arguing "but your first product will be very different from your ultimate product. Why would you want to scale something that is not proven yet!". My answer is to check the definition of "scale". A product that is scalable has a rapidly diminishing cost of 1) production and 2) modification.  Not only it is designed to have higher margins as volume increases, also cost of iteration is minimized by design. That's how scale drives growth.

Our goal for the first six months of our startup:
​
"To get from zero to one paying customer with a product that its cost of production and modification diminishes by half as the volume doubles"

(Disclaimer: where did I get "half" and "double" targets for cost and volume in the above goal?
No where! I believe it is reasonable and data shall prove me right or wrong as we go through the first six months)

Now, whatever decision we will be making or activities we will be spending time on must be measured against the above goal. For example, earlier this months, I needed to decide whether I participate in a monthly "FinTech" meetup in San Francisco. I decided to volunteer for one session and help out the organizers and in return I can go to their meetups for one year without cost. It seemed like a great idea! $15 USD per meetup X 12 months of meetups adds ups to $180 USD savings in my pocket. To put it in context, that saving pays for the cost of my domain address for 3 years on Weebly.com, not to mention the learning from key notes and networking value the meetups could bring. So I decided to volunteer. After formalizing our plans for the first six months, I'm reconsidering the priority of going to the meetups as it relates to our goal. These are the questions I would want to answer before going to those meetups:

1. Does going to FinTech meetups in the next 6 months help us get from zero to one paying customer?
2. Does going to FinTech meetups in the next 6 month help us reduce cost of production and modification by half?

​I'm tempted to answer "NO" to both questions posed above. And with that, my meetup time allocation is rapidly shrinking to zero. We expect this approach is going to cut through noise and help us stay focused and productive, and not just a meetup going busy-bee. During our first six months, being productive means an activity that meets the two criteria outlined in our goal statement. Contrary, being a busy-bee is a state where we are going through days and weeks but none of our activities will pass the test of the above two questions. 

There you have it! Our plan for the first six months and how to measure our progress? I am hesitating to wrap-up this post without talking about the longer term plans. The corporate strategist in me is screaming to talk about them ...What about after 6 months? What about long term aspirations and objectives? I recognize they are critical questions to answer and as a matter of fact, we do have answers to them. Having said that, at this point, I'm asking myself "does writing a blog post about our longer-term plans help us get from zero to one paying customer or reduce cost of production and modification by half?" and my answer to both is "No"! While I assure you, those plans exist but you have to wait until writing a blog post about them is in sync with  our priorities! I will though tell you about the next blog post. I will be writing about "how we are acquiring our first paying customer and how we are using it to build a scalable product?" Until then, may you stay away being a busy-bee, whatever you do! Ciao!