"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
- Alice in wonderland
The first part of the talk was about why you need to plan in the first place. Many students believe that the idea of the operations plan is so that you can show it to venture capitalists and get funded (or perhaps win business plan competitions). The point I tried to emphasise is that the plan is something that helps the entrepreneur with the big picture. Running a startup is not a matter of following a fixed set of steps until you get rich. Rather, you will be fighting fires every day as something or the other goes wrong. When you get consumed with all these small fires, it is easy to lose the big picture, and thats when you need your operations plan to get back on track.
Rules for operations planning
With that I talked about 5 rules of operations planning. Here they are:
1. Know Where You Are
At any point you need to know where you are. If your plan calls for one year of development before you release a product, then you should be able to know if you are on track at any point. For this, you need to have intermediate milestones where you can check your progress and adjust your plan accordingly. For a software startup, I would say you need a milestone at least once a month. This would be a release with a subset of features of the final product.
2.Churn, baby, churn
You may have done a lot of market research, but you cannot gauge the market reaction until you actually get your product or service into the market. Therefore, get it out as soon as possible - even if it is only a small subset of your final vision - and then use market feedback to drive the product. In order to do this, you need to break up your product or service into chunks that are complete and can be released.
3. Be Flexible
Often opportunities arise that could not have been predicted at the start. Maybe users are using your product in ways you did not plan, or perhaps a new opportunity presents itself. A startup needs to be able to take advantage of these opportunities. A small team of generalists will usually trump over a team of specialists, because generalists can change direction quicker.
A story: Sabeer Bhatia and Jack Smith wanted to start a company to do web based databases. It was entirely an accident which led them to develop the first web based email system - Hotmail.
4. Know What Is Important
You need to know what is important for the product to be developed. Focus on what needs to be done to get your product in the hands of your target customers. Startups will sometimes spend money on a nice office and save money on developer workstations. While this is great for the founder's ego, it's counterproductive for the business. As far as operations go, spend on productivity enhancements rather than ego enhancements.
5. Be Ready To Start Again
"Plans are useless, but planning is invaluable" - Dwight Eisenhower
Operations planning is not something that you do at the start, but it's something you need to be continuously doing. New information keeps coming up which invalidate your old plans. Rather than stick to the old plan, throw it away and plan again. Don't be attached to your operations plan - its essentially useless - but the act of planning is very useful.