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The “How it Works” Business Plan Alternative


It’s all too common that there will be a disconnect between what you’re creating as an entrepreneur and what is being seen by your customer. What’s even more concerning is when this disconnect happens within the same team. Many of the startups and businesses we see each day have this problem. There is no alignment on what it is you’re trying to create and how that should be delivered.

Probably the hardest thing to do as an entrepreneur is to translate your ideas from concept to reality. Lots of details and nuances can get lost in the translation. Getting internal alignment and external understanding both stem from the same core issue; how does the customer see you?

For the longest time entrepreneurs have been told to write a business plan so that there can be a clear path to success. Unfortunately business plans don’t solve either of these problems. Business plans end up being written by one or two people in the new company and hardly ever include the customer perspective. The alternative to writing a business plan is to create something similar to a “how it works” demo or tour you’ve seen on tons of application websites. It doesn’t need to be big or complicated. One page or a simple diagram often suffices.

To solve the problem of internal and external alignment you have to put yourself in the shoes of the customer or client. You must explain the problem you’re trying to solve through their eyes. Their perception of your product, your business and the solution you are providing is the only thing that counts. If they don’t get it, then your team won’t get it either.

The explanation must be so clear that a stranger, having seen your “how it works” model, could describe what you do to another stranger.

Start out by drawing your technology development process and how that links into your customer development process. This initial diagram will show you how your team will need to be aligned to get the product out the door. Once this is done, use simple step-by-step diagrams to show how your customer gets introduced to your business or product and what the various interactions would be along the funnel from stranger to customer (or even repeat customer). Show these diagrams to 5 – 10 of your prospective customers and ask them to explain it back to you. If there are disconnects then fix them and redraw the diagrams.

Example of a "How it Works" visual explanation for getting internal and external alignment

These “how it works” explanations can be used to train new employees, attract channel partners or align sales and marketing teams on what you are ultimately delivering to the customer. Simplicity is key here but not at the expense of understanding. If another step is required to get alignment and clarity then don’t be afraid to add it. Also use some color and animations if possible. There is a strong correlation between dynamic information graphics and understanding.

Author Richard Banfield

As CEO, Richard leads Fresh Tilled Soil’s strategic vision. He’s a mentor at TechStars and BluePrintHealth, an advisor and lecturer at the Boston Startup School, and serves on the executive committees of TEDxBoston, the AdClub’s Edge Conference, and Boston Regional Entrepreneurship Week.

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