Book Summary 3: The Art of the Start
Today I’ve summarized the book “The Art of the Start” by Guy Kawasak. This was a refreshing read, as the author is brilliant at using complex ideas and presenting them in simple frameworks. Also his sense of humour shines through throughout the book.
The book is divided into many chapters which talk about the art of pitching, the art of positioning, the art of branding, the art of raising capital, and so on. However, the first part of the book (The art of starting) forms the core theme of the entire book. It is this that I’ve shared here.
Five things every startup must do:
- Make Meaning: The best reason to start an organization is to make meaning—to create a product or service that makes the world a better place. So your first task is to decide how you can make meaning.
Meaning is not about money, power, or prestige. It is to
•Make the world a better place. (eg. Tesla Motors manufacturing cars that run on electricity)
• Increase the quality of life. (eg. Apple and its products)
• Right a terrible wrong. (eg. Solar City expanding the use of solar energy to power our planet)
• Prevent the end of something good. (eg. Paperboats saving the flavours of traditional Indian drinks from oblivion.)
- Make Mantra: Mission Statements are long, boring, and irrelevant. No one can remember them – much less implement them. Instead, take your meaning and make a mantra out of it.
Example: Coca-Cola’s mission statement is “The Coca Cola company exists to benefit and refresh everyone it touches.” but a hypothetical mantra for them could be “Refresh the world.”
Note that a mantra is different from tag lines. A mantra is for a startup’s internal team and employees, a tagline is for customers.
Mantras have the power of becoming the central theme of a company’s culture.
- Get Going: Start creating and delivering your product or service as soon as possible. Don’t focus on planning or writing or fetching.
Don’t start writing a 30 page business plan or a complex financial projections’ spreadsheet. Instead focus your energy on building a prototype, or launching your web site, or offering your services on an initial level. The hardest thing about getting started is getting started.
You should always be selling, not strategizing about selling. Don’t worry about being embarrassed. Don’t wait to develop a perfect product. Think big, find some soulmates who share your vision, polarize people (you have to create things which some people love, and others could hate. That’s alright. Every great product, and even individual, has polarized people. Love and hate from different people is both alright, it is indifference that should scare you.) , design different and use prototypes to research your market.
- Define your Business Model: You have to find a way to make money.
A business model needs answers to two questions:
(a) Who has your money in their pockets?
(b) How are you going to get it into your pocket?
Some tips on making a business model:
(a) Be specific: Define your market as precisely as possible
(b) Keep it Simple: Define it in ten or less words. Example of a business model for an ecommerce marketplace: We charge a commission.
(c) Copy Someone: You can innovate in technology, markets, and customers, but inventing a new business model is a bad bet. Try to relate your business model to one that’s already successful and understood. You have plenty of other battles to fight.
- Weave a MAT (milestones, assumptions, and tasks): The final step is to compile three lists: (a) major milestones you need to meet; (b) assumptions that are built into your business model; and (c) tasks you need to accomplish to create an organization. This will enforce discipline and keep your organization on track.
What are milestones?
They are your most important and emotionally compelling goals.
There are seven milestones that every startup must focus on. If you miss any of them, your organization might die.
• Prove your concept.
• Complete design specifications.
• Finish a prototype.
• Raise capital.
• Ship a testable version to customers.
• Ship the final version to customers.
• Achieve breakeven.
What are assumptions?
The numbers you’ve used to predict certain aspects of your business. For example, you may start with an assumption of your market size, your gross margin, the number of sales calls a salesperson can make per week, the prices of different parts that you purchase etc. Continually track these assumptions, and when they prove false, react to them quickly.
What are tasks?
All the major activities that are necessary to design, create, sell, ship, and support your product or service. Things included would be renting an office space, finding key vendors, filing legal documents etc.