I am thoroughly enjoying reading Guy Kawasaki’s latest book “Reality Check“. Much of it is a compilation of some of his best blog posts, but I would recommend buying the book and reading to get it all in one shot.
I particularly like Chapter 8, The Art of the Executive Summary and I agree wholeheartedly with Guy that this is perhaps the most important document you need to write as an entrepreneur.
Guy summarizes the key components as:
- Problem
- Solution
- Business Model
- Underlying Magic
- Marketing & Sales Strategy
- Competition
- Projections
- Team
- Status and Time Line
I think there are some other must reads for entrepreneurs:
- Chapter 9 – The 10/20/30 Rule of Pitching (10 slides, 20 minutes max, 30 point font). I liked Guy’s algorithm for font size, estimate the age of the oldest person in the audience and divide by two for the optimal font size!
- Chapter 10 – The Top Ten Lies of Venture Capitalists. Having myself started several companies and now on the other side of the table as a venture capitalist, I can totally relate to these, particularly “we like early stage investing”.
- Chapter 11 – The Top Eleven Lies of Entrepreneurs. I like “Our projections are conservative” and “Hurry, because several other venture capital firms are interested”. I have yet to see any startup beat their initial projections and venture capitalists don’t respond well to time pressure. It’s particularly hard if they call your bluff and it turns out you did not have others interested.
- Chapter 18, the Art of Financial Projections. Underpromise and overdeliver, something that I’ve painfully learned as an entrepreneur. I sit on a board with veteran venture capitalist Larry Mohr and I don’t think there is a meeting that goes by where he doesn’t drill that into the team. You can’t sandbag your projections but I can assure you that there is nothing worse than having to face your board consistently delivering the bad news that you did not achieve projections.
