By: David Kashmer, MBA (@DavidKashmer)
Did you know that thinking about Thanksgiving as a startup just might help us focus on what’s really valuable about this great holiday? Consider this as you take some time to think about how you’d startup Thanksgiving in your own unique way:
Step 1: What’s The Value Here Anyway?
Before you do ANYTHING, you need to decide what Thanksgiving means to you. What’s the value proposition? Is it the food, the time with family, the football game on TV? What is it exactly? It’s from that central decision that everything else flows…and I won’t answer it for you. Only you can decide, and decide you must, before moving on with your Startup Turkey Day.
Step 2: Build the Team
Ok ok…many of us who have started a business before think that you need at LEAST two things to make for a truly great business model: a great team AND a great idea. Which is more important? Well, I don’t think that question really matters! Because, experience teaches, if you don’t have the right team then there’s no idea that’s good enough to fly. If you don’t have at least a “good enough” idea then a great team can’t make it. However, I have seen a truly awesome team take the most marginal idea and make it gobble up the competition…
So, speaking of flight (and birds), what about Thanksgiving? (Ok the bad puns end here…) What kind of team will you need to execute the value proposition that is Thanksgiving?
Did you know, for example, that there’s evidence about startup team size and eventual success? Consider, for that reason, keeping the team size to 3 or 4. More on that here.
What about family? Should they be involved in your startup turkey day? Well, in general, I’d say DON’T start a business with your family(!) You can read more about it here. Yet, in this case, well…I mean it’s Thanksgiving! Probably not a good idea to keep the family out!
…and, hey, be sure to involve the family members who have complimentary skill sets! Maybe one person takes care of scheduling the when and where, another handles the setup of the actual event (tables and chairs), while yet another handles the food. Don’t forget that one family member who makes the stuffing you like so much.
Step 3: Use Some Tools
Ok, so now the three (or four) people of the team are all together. How will you all deliver the value that is Thanksgiving? Now it’s time to use a tool to make sure you are all on the same page as to what you’ll be doing, how it will deliver value, and how you’ll do all those things to make your Thanksgiving a success. For example, one tool that works great (WAY better than those old fashioned business plans that dissolve as soon as you make first contact with the market) is called the business model canvas. You can read more about the virtues of this great startup tool here.
As your team turns to the tool, think about what makes your startup unique and therefore somehow more valuable…take a moment to decide what your special sauce, exactly, will be…even if it is just cranberry.
Beneath, I’ve included an example of a partially completed business model canvas for a fictitious local startup, the Boxed Up Bird Association (BUBA pronounced “Bubba”).
Pretend your team of 4 decided that the central value proposition of thanksgiving was about sharing the feeling of thanksgiving with as many as possible, getting together families to share the holiday spirit, and uniting them over a tasty meal…Well, in that case, maybe your canvas would look like this:
BUBA seeks to bring Thanksgiving to multiple people by facilitating get-togethers, over food, for families that are separated somehow. Maybe BUBA, like in the canvas above, would help families share Thanksgiving when they are geographically separated…a military family could share thanksgiving via telepresence (eg gotomeeting or a similar platform) while BUBA sent them each a boxed version of a Thanksgiving meal to share. Maybe BUBA would do this by arranging all of the online get-together, the meal, and even the highlights of the football game. (Don’t forget to avoid spoilers across multiple time zones!)
While these families would get to enjoy Thanksgiving, so would yours. Seems like everyone would get what they need with the feelings of Thanksgiving…
Step 4: Like Your Idea?…Now Try And Kill It!
Just as many great, much-loved turkeys meet their ends around Thanksgiving, it’s time for you to try to end your idea now…while it’s on paper and before you’ve spent any resources on it!
Hey, we all fall in love with our own ideas. Now that you and the team have explored how you will deliver your Thanksgiving value proposition, it’s a good idea to try and figure out all the ways it won’t ever work. I tend to start with the Costs and Revenue section at the bottom of the business model canvas. Maybe you’ll start with what it will take to get “customers” to participate in your greatest-Turkey-Day-ever experience. Do customers even exist for this sort of thing? And how could you know or find out?
For costs, I use worst-case scenario costs. Seriously, we’re dealing with a brand new, never-been-tried scenario here. It may even be an industry you haven’t been in before. You lack info. There’s uncertainty. Plan for the worst as you figure out what costs it will take to make BUBA (or your personal Turkey Day Plan) go!
I recommend completing the canvas with the costs you will have each month and the one time startup costs you will have. It will help you figure out how much funding you will need for the startup, and figure out cash flow issues in the future. (More on that later in the entry.)
Under revenue part of the canvas…same deal. How will you collect revenue? How will you avoid cash flow problems? What margin (after tax) will you need to make it worth your time? Can you justify the price you’d have to charge to get that margin? Are you ready to work this hard? Do you recognize the seasonal component of BUBA (or your startup) in your business canvas and cost structure? Tough questions! Again, plan for the worst so you don’t come up short. Figure out how much of your service / product / awesome Turkey Day Experience you will have to sell in order to at least cover your monthly costs (rough break even calculation). And, again, remember that Turkey Day is a seasonal experience…
The idea behind all this is the recognition that your startup is an experiment. You have unknowns that you should try to quantify as you constantly (and quickly!) learn. However, despite trying to minimize the unknown, you never really know how things will play until you run the test and loose your Turkey day startup on the real world. So, plan accordingly!
(Maybe, if you’re lucky, you’ll stumble on something that takes the Turkey Day experience and extends it throughout the rest of the year so that you can have income then too…like “Holiday In A Box” or something. Who knows.)
If your idea survives this ruthless barrage of cost-loading and planning for worst-case-revenue, then move on to the next step. If it doesn’t, or it looks bad now (a wounded turkey but one that’s not dead yet in the best Monty Python sense), re-think what you’re doing! It’s much easier to pivot / adapt your business on paper before you’ve spent any money.
Step 5: Align The Team
Guess what, if BUBA (or your personal Turkey Day startup) takes off it is going to be TOUGH to keep all the players on the team aligned. From experience, let me say that now is the time to make sure you and all the teammates will be rowing the same direction at each stage of the company’s growth. When Aunt Maud’s awesome Thanksgiving whipped potatoes are a huge success 5 years in the future, that is NOT the time to sort out which team member contributed to the Turkey Day’s startup success. Do it now!
How do you keep everyone aligned? There are some really great tools for that such as dynamic ownership equity. Check them out and use them now! Look here. After all, one of the most common reason startups fail is mis-alignment of team members. Use the tools and avoid this terrible issue that seems to magnify as the startup goes on.
Step 6: Funding Turkey Day
Wow…all this because you decided to think about what Thanksgiving meant to you, and then you realized that the feeling of family and togetherness should be shared with everyone. You really signed yourself (and your team) up for something here, didn’t you?
Well, now, if you’ve made it this far it’s time to find funding for your startup Turkey day. How much funding do you need? Of course, it depends on the idea and your business canvas…
A classic (and very functional) recommendation is that you should fund your new business with 4-5 month’s worth of “runway”. That means, pretend your business won’t have ANY revenue for 4-5 months and yet will incur all of its costs. After 4-5 months, if your fledgling startup (sorry about another bird reference—promise about no puns violated) isn’t at least breaking even then re-evaluate the startup. Is time to pivot / adapt the business, or is it time to call this experiment unsuccessful and to move on?
Only you can decide.
Conclusion: However You Do It—Happy Thanksgiving!
If nothing else, putting this much thought into Thanksgiving allows for deep learning about what you really value in the day. Is it time with family? Is it giving thanks for what we have and sharing that feeling with others? Maybe it’s the food and football! Whatever it is for you and yours, have a Happy Thanksgiving from me and your friends at the fictitious Thanksgiving startup non-profit…The Boxed Up Bird Association (“Bubba”)!