The life of an entrepreneur is definitely full of ups and downs. Over the past 15 years, I have managed to start three businesses personally and one with a couple of friends. The fact that the four businesses were in four different industries gave me a significant amount of experience but also allowed me to see the common success principles were that existed in all of them.
But more importantly, I observed what similar characteristics existed in the founders. I have been interviewing founders of companies for the past couple of years and asking them one simple question: What steps did you take after you came up with a new idea?
True entrepreneurs can’t stop thinking and dreaming. Entrepreneurs see the world differently. When they look at a coffee cup, they see new ways to keep the coffee warm. When they look at public transit, they see new ways of commuting. When entrepreneurs hit on a great idea, it grabs them. They can’t stop thinking about it. They can’t stop playing with the idea in their minds. They start talking about it. They start drawing pictures on napkins. Then they decide to turn it into a business.
Related: 5 Ways to Advance Your Big Idea
But here is where the fatal error occurs: The vast majority of entrepreneurs do not take the time to figure out if their business will actually work.
My pre-entrepreneur background was a tenure in investigative and tactical policing. While on the Special Weapons and Tactics Team, I developed skills that have helped me build my four businesses. And no, I'm not referring to killing people -- I mean making things happen, execution. This is where the D.O.V.E. (dream, organize, validate and execute) technique was born. I have used the D.O.V.E technique to turn crazy, keep-me-awake at night ideas into thriving businesses. The technique has also allowed me to determine which ideas will work and which to leave on the shelf.
If you use the D.O.V.E technique, you will save yourself a lot of headaches and money. Let’s go through it together:
Entrepreneurs are all dreamers, and we all should keep dreaming. Some literally have their next business come to them in a dream, while others have a great practical idea to make something better, and then dream about how big it can get. Regardless of how your business idea starts, take the time to dream about it. If you are lucky enough to have co-founders, then take time to dream with then.
When we decided to launch my latest company, my two co-founders and I decided to lock ourselves up in a hotel room for three days and just dream. We talked about how our business would help people. We talked about our mission. We talked about Simon Sinek’s advice to have a strong "Why." We even talked about what we would sell, how much we would charge and who were our best clients. We discussed our new competitors, what we thought they were doing right and wrong.
Dreaming will allow you to discover why your idea won’t work or how to make money at it. Make sure you take copious notes. You will need them for the next step.
I cannot tell you the number of entrepreneurs who have sought my advice on why their business was not working or making enough money. The first thing I ask them is to see their business plan. The vast majority of them never actually wrote one. This always shocks me.
Early in my entrepreneurial journey, I had the chance to attend a seminar given by the late Jim Rohn. At that seminar he said, “If you fail to plan, you plan to fail." Before you start, build a proper business plan. There are lots of great templates online that you can follow, but make sure it is thorough. Your business plan is going to become your guide to avoid distractions, and it is going to be the most important document for fund raising. It will also be the litmus test you use to determine if you business is working. Your plan could be 40 to 50 pages long and include everything from details of the business, cost analysis, roles and responsibilities, who your clients are, who your competitors are, how much money you will need, etc. Finally, we must understand that the business plan is never complete. It becomes a living breathing document that we should be adding to and updating as the business evolves.
Getting organized is not just about your business plan though. You should also take time to go talk to your ideal customers and ask them what they think. Make sure that your relationships with your co-founders are well thought out, detailed and committed to paper. So many great businesses have failed because of the relationships between co-founders. There is a great book by Noan Wasserman called, The Founder's Dilemmas. It is amazing and a must read for anyone in the organize stage of D.O.V.E.
Related: Business Plans: A Step-by-Step Guide
Validation is the biggest step in the D.O.V.E. technique and the one that I see most entrepreneurs skip. Once your ideas and business plans are refined, it is crucial that you go out and get some opinions on your new business before you start. Go find a couple of experts in the space that you want to enter and meet with them. If they are in a different city, then get on a plane. If they have a busy schedule, then be patient and get on their calendar.
I realize this step may seem odd to you. There are many experts out there who are informed, networked and know the space you think you can grow in. A real expert will not have a problem reviewing your idea with you.
It was 2011 in Toronto when I finished organizing my thoughts on my current business. I started checking out LinkedIn and the Internet. I was trying to identify a couple of experts that I could run the plan by and get their opinion. I found a major angel investor who loved the publishing and book selling space. I contacted him through LinkedIn and he graciously offered to spend an hour on the phone with me and then reviewour plan. He gave us two pieces of advice that radically changed our thinking and prevented some real challenges.
Next, I found Joe Wikert. Joe is a publishing industry veteran and expert who has worked at several of the largest companies and now blogs on the industry. I found out that he lived in Indianapolis. I asked if I could buy him lunch if I flew down there. Six weeks later I was sitting with Joe reviewing our plans, including a mammoth web development project that could theoretically build a massive online community in the book space. I learned that Joe knew the founder of the biggest competitor in this space. When he green-lighted our idea, it was a huge point for us. Joe subsequently introduced us to two strategic partnerships that today are the two most important relationships in our business.
When Joe told me about the other website company and how they were eventually the subjects of a $200 million acquisition, I decided that I needed to validate with someone that was involved with the investment side of things. I did some research and identified that True Ventures, a San Jose tech-friendly venture capital firm, put the initial money in, then participated in the acquisition. Because I was heading down a similar road, I decided that I needed to talk to someone that was in the know at True Ventures. I tried for weeks to get through the gatekeepers but it didn’t work. So, I decided to call them early in the morning as I figured that some entrepreneurial figure in the company would be there early because that is what we do.
As luck would have it, Jon Callaghan, their CFO and one of the founding partners, picked up the phone directly. He was gracious enough to chat with me on the phone for two hours. He encouraged me, gave me detailed advice on things like budgeting, incorporation and logistics that have become very important pieces of our business plan.
Jon and Joe’s advice / validation were likely the most important conversations in our company’s history. They have opened the doors to their contacts and saved us millions in mistakes. They were completely gracious with their time and gave advice with no strings attached.
So you see -- there are experienced experts in every industry that would love to help you with your success. Take the time to validate your plans.
The final step in the D.O.V.E technique for creating a viable business is executing. Once you have cemented your dream, organized your thoughts and plans and validated with expert opinions -- now its time to get to work. The biggest thing that I have learned about this step is to follow your plan, but don’t be married to it. Continue to brainstorm with your key decision makers along the way. Get out into your industry and continually validate throughout your journey. If things are going perfect, be open to course correction -- but every time you are thinking about making a change in your business, use the D.O.V.E technique again to help you plan.
When you decide to execute, you have to be willing to give it your all. It will mean 20 hours a day. It will be missing social activities with friends. It will mean sacrificing your your life.
My company has won awards, created incredible relationships with customers, vendors and investors alike and also created a home for over 40 of the most wonderful partners I have ever had. But it would have been much harder to get to where we are without the D.O.V.E technique. I have the opportunity to speak to new business owners every week and inevitably end up in conversations about the D.O.V.E technique. It has been amazing to see how enterepreneurs have completely enhanced their focus simply because of dreaming, organizing, validating and executing.