Breaking Glass by Rishi Dean

Summary: There’s more to start-up finance than raising money, here are the “5Ps” you need to know. E-mail. Tweet.

While I try to keep topics on this blog related to innovation strategy, and product development (rather than being a pure “startup” blog) sometimes I need to weigh in on topics that get me a little annoyed. That is, in nearly every meet-up of young startups (the best places to find the seeds of innovation sprouting) the discussion is centered around raising money. All too often venture capital financing is lauded as the holy grail for a startup, over running your business. However, if you’re supposedly operating as a “lean startup”, these are the financials you should be focused on…not raising money.

Financial Management vs. Raising Finance
There is much more that goes into the financials of a start-up (I almost called this post “Why Startup CFOs Matter”). Consider that if the core objective of a business is to make money, and likewise its death is to run out of money, it’s worth examining how the areas of day-to-day financial operations of a startup.

Here I propose “5Ps” of start-up financial management:

• Planning
• Process & Policies
• People
• Pricing
• Partnerships

Let’s explore each of these in more detail.
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Summary: Finding Product / Market Fit is the key for early stage products. The PMF Matrix is a framework to help you get there. E-mail. Tweet.
[UPDATE: This post was updated on July 5, 2010 with new slides]

This presentation centers on the concept of Product / Market Fit: what it is, why it’s important, and how to achieve it. I propose my “Product Market Fit Matrix” that helps to characterize the issues of the start-up and presents various frameworks that can help guide development. In a sense the Product / Market Fit Matrix is a meta-framework, which can be used to characterize your current situation, so that you can employ the right set of tools to achieve your goals.

I originally developed these slides to facilitate a discussion of entrepreneurial MIT alums, mainly from the MIT Sloan business school. My intention was to introduce many of the newer, leaner concepts of early stage start-up development, since MIT tends to see a lot of “technology-in-search-of-a-problem” start-ups, in their early stages.

After receiving a very positive reception, and lots of suggestions from many smart people, I’ve updated this presentation. The presentation below was developed for a talk called “The New Rules of Product Development” for MassChallenge.
See the presentation

This past weekend, I finally watched the latest Star Trek movie (quite entertaining). In reconnecting with the franchise, it reminded me how innovative Gene Roddenberry (and his writers) were in developing some remarkable ideas, like the Transporter.

But despite the “genius” of Roddenberry’s ideas, it’s a stark reminder that ideas aren’t inventions; meaning just because you’ve thought of something doesn’t make it your invention. Last time I checked, Gene doesn’t have a patent on the Transporter, the Replicator, the Warp Drive, or any other Star Trek created idea. Turning ideas into reality is hard, and that’s where the true genius is – let’s not forget the words of Thomas Edison:

“Genius is one percent inspiration, ninety-nine percent perspiration.”

Here we’ll explore the requirements for an “invention”, and the stages for successful commercialization.
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Last week at Visible Measures, we unveiled a major redesign of our homepage, moving from a standard brochureware site, to showcasing our data first. While it took a lot of hard work by many teams, it’s not the first time we’ve been through this. Having piloted a number of these at VMC, it got me feeling a little nostalgic as I looked back on the numerous incarnations of our homepage, which I’ll share.

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I am a big fan of Paul Graham, and once again he’s given us a great essay, this time on determination. His basic idea is that determination is a factor of “willfulness balanced with discipline, aimed by ambition”. A very good post, that I encourage you all to read.

In keeping with the thread, I offer the following video, from ESPN’s “Outside the Lines”. If this isn’t the essence of Paul’s three traits, I don’t know what is…and if it doesn’t choke you up a bit, I’m not sure what will.
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