Launch Tomorrow

Landing Pages for your Lean Startup

How Intel wrote a business plan without committing to one

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Take a look at Intel's business plan (typos and all), circa 1968:

The company will engage in research, development, adn manufacture, and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers. This will include thin films, thick films, semiconductor devices, and other solid state components used in hybrid and monolithic integrated structures. A variety of processes will be established, both at a laboratory and at at a production level. These include crystal growth, slicing, lapping, polishing, solid state diffusion, photolithographic masking and etching, vacuum evaporation, film deposition, assembly, packaging, and testing, as well as the development and manufacture of special processing and testing equipment required to carry out these processes. Products may include dioded, transistors, field effect devices, photo sensitive devices, integrated circuits, and subsystems commonly referred to by the phrase "large scale integration". Principal customers for these products are expected to be the manufacturers of advanced electronic systems for communications, radar, control, and data processing. It is anticipated that many of these customers will be located outside of California. Today, Intel is a multi-billion dollar company. Note that they acknowledge uncertainty, with the word "may".

To me, it looks as though they intentionally wanted to avoid committing to specific product type, while still ticking the box that they have a business plan. The point of business plans isn't to have a business plan. It's to make your assumptions explicit, so that you can test them.

In fact, according to the old Startup Genome report on why startups fail, 70% of startups fail because they try to scale up, without having verified enough of their assumptions.

Best of all, verifying an assumption doesn't require a full business plan.

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Introducing the Align Remotely podcast

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I’m excited to share that I’m finally launching a podcast, after a few almost successful attempts in the past.

The Align Remotely podcast will focus on leading distributed teams and everything associated with that topic, like leadership and operations to help achieve together, now that nearly everyone works from home.

In addition to the actual recording, the show notes will also include a visual representation of the discussion, a transcript, as well as any other resources mentioned during the discussion. This should help make the contents skimmable and also useful for anyone who prefers a more visual way to consume audio content.

The first episode was recorded with James Newson, who is a technical specialist around remote work. We cover any potential issues and possibilities around hybrid working, for when the coronavirus epidemic is over. And there is a lot more to it than I thought, because usually I was just leaning on company IT to “sort it out”, without having a proper think-through.

You can find out more at https://www.alignremotely.com and look for the podcast whereever you consume your podcasts. The first episode is over here: https://podcast.alignremotely.com/e/1rnkp6z8

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Just how expensive are all these online meetings?

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If you want a high-leverage way to improve your company’s culture, one of the highest leverage (even financially) ways to do so, is to take a close look at your meetings. This includes your regularly re-occurring ones, as well as big long ones when kicking off or closing an initiative.

sunk cost: watching a bad Netflix series to the end, even though you didn’t like season 2

Meetings are extraordinarily expensive, although they aren’t explicitly budgeted for because everyone is on a salary. It’s a “sunk cost”. It's relatively easy to calculate the cost of any regular meeting you hold using meeting cost calculators like this one. Just running it through for a small software development team I ran, it turned out that the daily standup of 14 people cost $100 per instance, multiplied by the number of days in the year, so around $22,000 per year.

The financial cost of organizing meetings can significantly exceed the budget authority of the meeting organizer, like at one mid-market manufacturer, where a junior assistant convened a 90 minute weekly meeting among middle managers that cost $15 mln/year:

For example, leaders at one large manufacturing company recently discovered that a regularly scheduled 90-minute meeting of mid-level managers cost more than $15 million annually. When asked “Who is responsible for approving this meeting?” the managers were at a loss. “No one,” they replied. “Tom’s assistant just schedules it and the team attends.” In effect, a junior VP’s administrative assistant was permitted to invest $15 million without supervisor approval. No such thing would ever happen with the company’s financial capital.

The cost aspect flies under the radar, because it's money the company was already expecting to spend. But this is a good example of confusing the expected outcomes with the underlying drivers of success. Just spending the time in meetings will not help you achieve your company's goals faster. It's spending time in high quality meetings that makes a difference.

And to do that, you need to design your meetings around the outcomes they help you achieve. If you don’t have a clear outcome in mind, then why keep meeting? Especially if you’ve already achieved that outcome?

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Win the fight for attention by communicating with relevance

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The biggest challenge when introducing a new product is establishing a connection with your audience. Often, this is because you can’t do anything else until this is in place. This detail really hit home for me, when I went to an accelerator event in Mexico.

In this 2006 photograph, a man was receiving an intramuscular injection in his left shoulder muscle from a trained, registered nurse (RN), while his family was observing from over the nurse's shoulder.
Photographer: CDC | Source: Unsplash

One of the speakers was an immunobiologist client of mine, who’d developed a unique salmonella vaccine that could be combined with other vaccines. And it looks as though his vaccine is the only salmonella one which can do that.

I’d worked with him briefly as an innovation expert, and had a discussion about commercialization options as well as some pitch training. At the time he was struggling to see entrepreneurship as a viable route to greater impact. He felt comfortable as an inventor, and wanted to do more of that, not become a businessman.

It turned out I had unleashed a force of nature. Also drilling him in giving pithy explanations helped him hone down his message to something much more concrete for anyone who wasn’t already a fellow immunobiologist, or even a scientist. This one insight allowed him to communicate the relevance of his work to the wider public.

But more importantly, he started to believe that entrepreneurship was a viable route to greater impact. As it would force him to confront institutions that held him and other scientists back domestically.

Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

As a result of both, he’s pretty much gone from a booksy academic researcher to a serious contender in getting funding to help spread the use of his product vaccine. This is the power of relevance and empathy in an age of dwindling attention.

One of the best ways to get (and stay) relevant is to focus all of your marketing and product efforts around a client profile. In theory there are millions of ways to reach an audience; in practice, you only need to reach a specific group of people. So figure out who they are, and then just focus on them. The best way to do this is the Hero Canvas tool. Grab a copy and get a quick intro for free with my Hero Canvas course.

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Why the silo megaphone effect undercuts your ability to align

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The biggest challenge I’ve had with building alignment as a team leader was the “silo megaphone effect”. In the past, I’ve attended a number of surreal stakeholder meetings attended by:

  • head of product
  • head of delivery
  • a technical person
  • a head of QA
  • or possibly other managers.

Each participant makes statements that–on their own–made absolute sense. For example, the QA person argued for keeping a certain standard in terms of quality. The delivery person wanted to bring in the date as much as possible. The product person wanted to throw in as much scope as possible to make it easier to sell the product. I understood what they were saying. I could fully understand why they were saying what they were. They genuinely believed they were arguing for the overall benefit of the company, as a whole.

Nevertheless, if you juxtaposed what one manager was saying against the other, it was less than clear what the overall priority was. And this is exactly what I call the silo megaphone effect.

Each manager spent a lot of time with their respective team. So they had agreement amongst themselves as to the best course of action. But when meeting across department boundaries, the communication broke down. Nassim Taleb noted that firemen with much downtime who talk to each other for too long come to agree on many things that an outside, impartial observer would find ludicrous (they develop political ideas that are very similar). In particular, each manager running a department has a certain set of objectives and assumptions that are reinforced by discussions with people he’s managing, resulting in rather surreal coordination efforts.

The silo megaphone effect refers to the tendency for managers to specifically argue what is best for their particular functional area. The inadvertent focus is on local maximization. This happens by default, despite everyone having the best of intentions.

Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

I’ve fallen into the trap myself, of arguing for a short term benefit that will bring in the schedule at the expense of properly solving a problem at an organizational level. Sometimes the schedule pressure was just immense.

The main way that I dealt with this was to cross-reference statements from different stakeholders, and then ask for further clarification. The aim was to achieve what’s called “referential integrity” in a database. Where every data point is fully linked up to every other data point. Ultimately, in order to delegate effectively, we needed to agree what the ground rules were. This way we could communicate them to the teams, and hold ourselves accountable to them.

Read more in Align Remotely.

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