Advice to Start-ups: Stack the Deck
I read a good number of blogs. I still like magazines (obviously). I love books, and I wish I could find time every day to read the newspaper from front to back. I also have great respect for academic writing.
Lengthy prose, however, has no place in a start-up. While I was working on Brontes Technologies during my second year in business school, our team entered both the Harvard and MIT business-plan competitions. Both contests required the submission of a written business plan. Our plan was 42 pages. It was obsolete before it was even completed.
The judges seemed to have skimmed it, as did our academic adviser, but I don’t think they really read it. Even if they didn’t read it closely, they read more of it than anyone else ever did. We shared it with some investors, but it was clear they never read it. We never referenced it again ourselves. We never gave it to new staff members to help them understand our business. We never edited it as our business changed. We never really used it in any way. It was little more than academic.
No matter how gifted a writer you are, slide presentations, or decks, are a better way to get your message across. Quick to read and easy to edit collaboratively, slide decks are the most concise way to express an idea for discussion and decision making. Prose is great for one-way conversations, but it
falls short for any type of engagement in a group. Ultimately, prose is not agile enough for start-ups.
Start-ups need to move fast, organize their goals succinctly, and edit on the fly. I’ve never seen a start-up go back to rewrite the marketing section of its business plan after rethinking its marketing strategy. I have, however, seen many start-ups in the same situation rip up the marketing slides in their slide deck and insert the updated ones.
This concern doesn’t apply just to business plans, either. Prose should be used sparingly in all types of business communications--annual plans, formal specifications, etc. As an investor, I’ve noticed that I have a very strong bias against teams that send me executive summaries. I rarely read them when they are one page long, and, unfortunately, most are four pages. This is your opportunity to make your company’s narrative inspiring and compelling--don’t waste it by submitting the equivalent of War and Peace. When I get an executive summary, I immediately ask for a deck, which I find much more energizing (when well executed) and digestible.
I think the formal business plan is a relic of the start-up business-plan competitions that originated at academic institutions. If you apply the academic mindset to a start-up, then it probably does make sense to start with a written thesis on the opportunity. Unfortunately, it took me a full year to write my undergraduate thesis, and I don’t remember anyone ever reading it outside of the professors responsible for grading it. I would encourage academic institutions to replace the traditional business-plan competitions in favor of pitch-deck competitions.
As for entrepreneurs, my advice is to discourage your team from writing prose whenever possible. If you want to tell a story, tell it in a compelling and concise narrative slide deck. If you have an argument to make, do it live in a team meeting. If you want to codify what has been agreed to on any aspect of the business, build concise slides that are easily digested, shared, debated, and edited as a group. If you want to slow your business down, stifle real-time discussion, and prioritize the argument over the outcome, write prose.