DealHorizon - the faster, easier way to create and share business plans

While browsing in an airport bookstore, I recently came across a copy of Business Model Generation - a Wiley publication written by Alexander Osterwalder and Yves Pigneur. If you're looking for an inspiring thought-starter when writing your next business plan or presentation, especially if your business is a start-up, you'd be hard-pressed to find a better source of tinder.

One of the things I particularly like about the way the book is laid out is the clear focus on the sales side of the equation, including how to identify and structure your sales channels.

A lot of entrepreneurs seem to think that raising money is about having a whiz-bang technology. I'm increasingly of the opposite view - I think regardless of age, the more time you spend in management and on boards, the more focused you become on sales and marketing strategy - and the strength of the relationships you're going to need to build the business.

Want an example? Three centuries of superior technology have failed to suppress the Afghans - the Brits tried, then the Russians tried, and now the US - plus a coterie of hi-tech partners - has tried, and, despite the PR to the contrary, failed. You can throw all the sophisticated weaponry you like at the place - the local relationships are just too strong for it to have any effect.

Most technologies, when it comes down to it, don't enable a business on their own - very few businesses create entirely new revenue streams. In fact, most startups simply enable commerce to be created on the basis of a slightly better way of doing something - a provable level of efficiency or performance enhancement.

Business Model Generation does an excellent job of asking its reader to define the precise sales channel and marketing strategy that will best enable adoption of the technology. It isn't a "by the numbers" approach, it's an approach that asks to conceptualize the information you and your investors are going to need to be successful.

Well worth the money.

When you really boil it down, there are only two ways people fall in love - the love-at-first-sight version ("I knew he was my soulmate the instant we met - it was like lightning struck and all I could see were his eyes, looking at me through the crowd..."), and the no-less successful, if you believe the statistics, ("well, he kind of grew on me, and then the next thing you know we were living together, and then we got married and, well, here we are.")

I believe it's exactly the same with venture investing. Either you walk into the room holding lightning in a bottle (a radically cheap way of engineering touch-screens, a combustion engine that uses half the gas yet provides twice the power*), and it's obvious in the investor's reactions ("what are you doing later today?") or it's not ("let us talk it over internally and get back to you.")

There's another level too - hate at first sight. For the purposes of this post, let's assume you're somewhere north of that, but still someplace south of the "bells pealing in the village square" rhapsodic embrace.

A lot of people who find themselves in this situation simply don't know what to do. They either give up, or do "what the book says" - tweak the plan and send a new copy, answer some follow-up questions, have the lawyer/banker/finder call, etc - anything, but bug the guys with the money directly.

This, as any successful long-term lover will tell you, is entirely the wrong approach.

The first thing? Don't become discouraged. Forget about the fact that the "love at first sight" guys can afford to dress like shit and behave like complete assholes and still get their money - you can't, end of story, so you need to put that thought behind you.

In fact, like the jilted lovers in our opening story, the best way of looking at things is: you've got a lot of work ahead of you, but it may be worth it in the end.

The second thing? Somehow, you need to get the investor to invest some time in getting to know you. Maybe you're not an easy person to know. Maybe your technology is complex, or hasn't been explained well. Maybe your marketing plan didn't come across the right way. Maybe you actually need some help and advice from someone that's done it.

Whatever - you need to get some time together, andthe only way you can do that is to use your contacts to engineer some time alone in a room. Or beside him/her at dinner. Or (and this the an absolute "least you must do" strategy), you need to get your prospective investment partner to sit with you on the other end of a phone, or a Skype call.

No face/phone time? Again, unless you're holding lightning in a bottle, no deal.

I once spent two hours every night for almost three weeks on my cell phone with a US investor, from Singapore, while walking around and around the garden at the Hyatt (I imagine the path I wore is probably still visible from the upper floors!) Without those long conversations, there is no way we would have gotten to know each other to the extent necessary to build an investment case - and close our deal.

Another time, while selling software in Dubai, I checked into the Embassy Suites in Sharjah and stayed a month - because if I hadn't done that, I would have been just another guy coming in and out for a day and a half with a briefcase. I wanted to be around long enough for people to understand who I was - or for me to understand them.

In both cases. we successfully concluded our business, but more importantly, we created some great and lasting relationships. These, in my opinion, are the lasting things of business. Your aim should not be to die in a room full of money - it should be to die in a room decorated by friends. Relationships represent the midpoint of a path in that direction.

A side story: the father of a good friend of mind who grew up in Kuwait was a Sudanese diplomat. One day, he saw a magazine advertisement from a 19 year old German woman living in Hamburg who had broken her leg quiet badly, and wanted to spend her time while recuperating learning English. He became her writing partner. They communicated for months, then finally agreed to meet up, in London.

The first meeting went badly. But he pursued her with such zeal, and over such a long period of time, that eventually, she gave in. They fell in love, got married, and went on to have three great children, one of whom was my friend (who, sadly, like his father, is no longer with us).

I know you're thinking, I have the lightning. The investors are just having trouble seeing it. That might be the case. Spend some time with them. It might be that your special kind of lightning takes a special kind of relationship for it to become visible.

*Note: Re these two investment examples, two of the CEOs I'm helping out right now really do have these "lightning in a bottle" technologies. Good for them - they can probably safely ignore the above advice.

Many years ago, I was offered several million dollars by a syndicate of investors as part of a first-round funding for a media company we planned to build. This was my first ever venture deal. At the stage the offer came, I had everything at risk, right down to our newly-purchased house. Everything was flashing red. We need this deal to close, and fast.

Then, at the last moment, during an investment committee meeting to approve the financing, one of the investors placed a condition on the funding. The condition was, I had to remove one of my three partners (there were four founders in total.) He was not permitted to be part of the venture.

Apparently, at some point, my co-founder had slept with the investor's wife, sister, or mother - or perhaps lost him some money (that part was never made clear.) Whatever it was, it was clear from the tone of the demand that it was an issue of historic proportions, would never be forgiven, and 100% non-negotiable. It was "lose your co-founder, or kiss our money goodbye."

It was my call. But I didn't have to think about it long. I decided to keep my co-founder.

My co-founder had been instrumental in building and funding the business. He was a good friend and had done nothing wrong. I told them I wasn't interested in screwing over one of my partners because of some personal baggage between him and them and put down the phone. I called my partners and told them the funding was not coming. Then I called the bankers and told them to get busy finding someone new.

[They did: Six weeks later, we had a new group in place, and closed on a multiple of the original ask at the same valuation - our group of four partners intact. Two years later, the four of us sold our stake for five times our initial investment. A nice fairy-tale ending.]

In that scenario, not killing my co-founder was smart business sense and the right thing to do. He'd done nothing wrong by the group (quite the opposite, he'd been fantastic), and he deserved our support. And in the end, that loyalty would be repaid, and result in a terrific exit.

But not every story can have such a happy ending. In The Social Network, there's a point where one of the co-founders decides to cut off funding to the rest of the group to make a personal point, placing the business at considerable risk of collapse. He was killed off. It was the right decision.

A few years later, on another project, I was faced with a similar situation. One of my co-founders had placed our business at risk by continuing to develop our technology using an approach (and programming language) that many felt would not meet our future customer needs.

Our equity and the professional lives of several dozen staff were at risk. There had been several attempts at mitigation, several tries at placing people alongside the guy, placing books on different programming languages plumb center on his desk. None had worked.

When it finally came down to it (after a few weeks of walking around the issue, we finally sat down over a curry dinner at my house and agreed a plan), he was upset, but gracious. He recognized the issue was bigger than him, and that we probably needed someone with a different skill-set.

That doesn't mean it didn't hurt. I really liked the guy. But, unlike the first story, killing him was necessary. There was no alternate way forward for the business. He didn't want to work to the plan. We had an urgent need for a scaleable technology that matched our business requirements. We were required to act to save the company, the staff, our customer relationships, and our investment capital.

It was the right thing to do.

So therein, for me, lies the difference. To me, killing a co-founder for personal or bullshit reasons is akin to gunning down a fellow soldier in the trenches. If the guy is carrying his weight, and has his eye firmly on the enemy, then you need to shovel your personal stuff in a sack and stick together.

But if the guy is asleep at his post, or withholding supplies from the troops, or sitting on the plans you need to create your super-protective force-shield - or just isn't prepared to do what the business needs him to - then there's no argument as to what to do at that point: you need to kill your co-founder.

My advice? Do it nicely, over dinner.

We had a nice night out last night at the home of a former pro poker player now living in Singapore. Over pre-dinner drinks with some of the other couples, we discussed the hassles of moving across oceans. I found myself scanning my host's book/CD/movie collection as we chatted.

I've found over the years that the media wall in a home provides fascinating reading - lots of Lonely Planet guides and you host is probably an experienced traveller. Lots of medical texts, either they are in the health profession or someone in their family is having an issue. Lots of books on law - if they're not a lawyer, you probably don't want to know. Lots of books on gambling? You're probably in for a good night out.

The media wall at my host's house was of pretty typical size and range for the average male of his age, but my aim in writing this is not to expose what is in his bookcase but to imagine the impact ofdigitization on his young kids (and mine), from the point of view or collecting, storing and moving stuff - and what the invisibility of our media choices might mean in the future.

Think about it - 90% of the crap in my house that I've collected over the years (and says that I personally live here) exists in the form of dozens of hard copies of some type of media: Books, DVDs, CDs, cartridges (and, embarrassingly, several boxes of DATs, videotapes, D1s, cassette tapes and laser discs).

When you come into our place, it's possible to get a quick read on what my interests are - it's right there in the book case. In the living room of the future, none of this will exist. There will be no "man cave bookcases" or 'media wall' - and, apart from the server under the stairs, no library.

Newspapers and magazines? Please. The TMZ-like remnants of those failed beasts will be streaming onto whatever we end up calling tablets.

There will be no comic collection or photo albums or watch collection (who the hell needs a watch when you have a cell phone that is a) better looking, and b) linked to Network Time Protocol?) I'm already moving that direction fast - as most people are. There will soon be more stuff loaded on my iPhone than in my shelves. There's already more photos than I can view.

Sure, there will be a big-screen TV/computer display in every room - but aside from the rotating art choices, nothing about the surroundings will provide any hint of your media preferences. Walking through a person's home will like entering an abstract mystery, with literature (and other, decidedly non-lit) choices hidden from view. Will the kid's room have posters on the wall, or a 60" live gaming environment.

As the price of displays continues to drop to the floor, I wouldn't hold out hope for the survival of the poster industry - or any industry involved in hard copies of media.

It's not just media industries that are going to be affected by this shift. Movers, take note - when it next comes time for us to move across oceans, at least half the heavy stuff you loaded in our last move won't be in the next one.

Okay, when it comes to my personal stuff? Make that 80% - and 100% of the heavy stuff.Good luck making money without that.