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This article explains that Jeff Bezos also invested $250,000 in the first angel round in Google and that at today's prices his shares would be worth $1.6 billion.http://kara.allthingsd.com/20091005/new-yorker-bezos-initial-google-investment-was-250000-in-1998-because-i-just-fell-in-love-with-larry-and-sergey/I also just just found this well written article:http://www.theangelinvestor.com/article/100030;jsessionid=162352D2611033DDE9D8838BE85A3FF6/Google:-The-Worlds-greatest-Angel-Investment/Google: The World's greatest Angel InvestmentBrian Perry22-Aug-06We all know what an angel investor is or is supposed to be. For some of us, this conjures up images of near miss financial ruin and for others, a sense of financial bliss. But what does it really mean to have a “hit” with an angel investment? Do we all measure our success by the same results? For some of us, it might be a return of five times our investment over a five year period. For others, it might be looking for “the next big thing” with returns you can’t even fathom.In the hottest angel investment country in the World, the US, last year had some 227,000 angels and pumped $23 billion into start-ups, up 3% from 2004, according to the University of New Hampshire’s Centre for Venture Research. In 1996 there were only about ten angel groups in the U.S.; today there are more than 200. The single greatest reason for this change is the fact most Venture Capital firms have started to favour larger, later-stage investments and therefore leave a gap in funding for early stage businesses and start-ups.The UK market is also showing strong signs of angel investment activity. According to the British Venture Capital Association (BVCA), last year their members backed more than 1,300 UK businesses and almost 80% of these were made for less than £2m.The BVCA’s latest Report on Investment Activity shows that investment in start up businesses last year increased by a robust 67% to £160m.The number of early stage businesses receiving funding rose by 8% to almost 500 in 2005, representing almost 40% of all companies backed by the industry during the year.Angel investing isn’t something that has only been around since the 90’s. The common perception is that angels have been around since the days of Broadway and they were the people who “came from the heavens” to aid these hard to finance theatrical “businesses”. The reality is, angel investing has been around for as long as there have been businesses. Perhaps that Marrakesh spice merchant wanting a stand in the local souk 2000 years ago was started with a loan from an investor selling a goat. Chances are, the returns in those days were fairly modest compared to some of today but the fact still remains, angel investing has been around for a very long time and is likely to only increase in coming years.FAMOUS ANGEL INVESTMENTSMoving ahead a few years to the 1878 Paris Exhibition, a few highly prominent chaps by the name of J.P.Morgan and Spencer Trask decided to back a crazy idea called “electricity” that was being pitched by none other than Thomas Edison. No need to expand on the success of that angel investment. Some of the more famous angel investments include Ian McGlinn making an investment back in 1976 in an innovative little startup called The Body Shop. Back in 1994, there was a guy in the US selling books from his garage via the internet. 12 angels later and Amazon.com was born, 2005 sales were over $5 billion!Mark CubanThe wealthy Texan who sold Broadcast.com to Yahoo for $5.7 billion in 1999, recently signed on as an angel investor in Brondell, a San Francisco based manufacturer of Japanese-style toilet seats that wash and dry your behind. Some have questioned Cuban’s reasoning for doing such a deal. According to Brondell co-founder Scott Pinizzotto, Cuban looks for companies that target the masses. “There are 220 million residential toilets in the United States,” Pinizzotto explains. “That’s our installed base, and that’s what got Cuban excited.”1 In December, Cuban invested an undisclosed amount in the company, opening up the pearly gates for other angels: Brondell has now attracted $1.3 million in seed funding.Eric HahnEric Hahn is one of Silicon Valley’s superangels, a former Netscape CTO who has completed early stage investments in Good Technology, Opsware, red Hat, and Zimbra. He invests his own money, but only in start-ups that possess hard-to-replicate technology. “For example,” Hahn says, “I would have passed on eBay. It’s a great company, but it was mainly an exercise in building a brand.”2Andy BechtolsheimThe second most famous angel investment in recent years (number one to come shortly) was probably the $100,000 check that Sun Microsystems co-founder Andy Bechtolsheim made out to Google after watching Larry Page and Sergey Brin demonstrate their search-engine software. The check was uncashable at first, as a legal entity, Google didn’t exist yet, but once the company’s incorporation papers were completed and filed, the money enabled Page and Brin to move out of their dorm rooms and into the marketplace.Aside from the commonly talked about angel investment successes of Amazon and Body Shop, even the likes of Apple, Kinko’s and Starbucks all got their starts with the help of angel investors, as did current rising stars such as Digg, LinkedIn, and Simply Hired.However, as any angel is fully aware of, not all angel investments go as planned and produce those big hits all are striving for. Doug Richards knows this very well as an investment angel on BBC 2’s “Dragons’ Den”, one of a team of elite business people able to dash the hopes or make dreams come true for eager entrepreneurs with ideas to sell.During the first two series, Richard made eight investment offers of which two were accepted. Unfortunately for him, one of them has already failed but to a philosophical entrepreneur like Richard, that’s no big deal. “It’s part of the life of being a high risk angel investor,” he says. “I don’t begrudge the investment – but I lost it. £60,000.”3One thing all angels tend to agree on:“Devote only a small portion of your portfolio, say 3% to 10%, to such risky investments.”Google: The World’s Greatest Angel InvestmentHere is a brief summary of Google’s humble beginnings and straight from the company itself:According to Google lore, company founders Larry Page and Sergey Brin were not terribly fond of each other when they first met as Stanford University graduate students in computer science in 1995. Larry was a 24-year-old University of Michigan alumnus on a weekend visit; Sergey, 23, was among a group of students assigned to show him around. They argued about every topic they discussed. Their strong opinions and divergent viewpoints would eventually find common ground in a unique approach to solving one of computing’s biggest challenges: retrieving relevant information from a massive set of data.By January of 1996, Larry and Sergey had begun collaboration on a search engine called BackRub, named for its unique ability to analyze the “back links” pointing to a given website. Larry, who had always enjoyed tinkering with machinery and had gained some notoriety for building a working printer out of Lego™ bricks, took on the task of creating a new kind of server environment that used low-end PCs instead of big expensive machines. Afflicted by the perennial shortage of cash common to graduate students everywhere, the pair took to haunting the department’s loading docks in hopes of tracking down newly arrived computers that they could borrow for their network.A year later, their unique approach to link analysis was earning BackRub a growing reputation among those who had seen it. Buzz about the new search technology began to build as word spread around campus.1998: The search for a buyerLarry and Sergey continued working to perfect their technology through the first half of 1998. Following a path that would become a key tenet of the Google way, they bought a terabyte of disks at bargain prices and built their own computer housings in Larry’s dorm room, which became Google’s first data center. Meanwhile Sergey set up a business office, and the two began calling on potential partners who might want to license a search technology better than any then available. Despite the dotcom fever of the day, they had little interest in building a company of their own around the technology they had developed.Among those they called on was friend and Yahoo! founder David Filo. Filo agreed that their technology was solid, but encouraged Larry and Sergey to grow the service themselves by starting a search engine company. “When it’s fully developed and scalable,” he told them, “let’s talk again.” Others were less interested in Google, as it was now known. One portal CEO told them, “As long as we’re 80 percent as good as our competitors, that’s good enough. Our users don’t really care about search.”Touched by an angelUnable to interest the major portal players of the day, Larry and Sergey decided to make a go of it on their own. All they needed was a little cash to move out of the dorm — and to pay off the credit cards they had maxed out buying a terabyte of memory. So they wrote up a business plan, put their Ph.D. plans on hold, and went looking for an angel investor. Their first visit was with a friend of a faculty member.Andy Bechtolsheim, one of the founders of Sun Microsystems, was used to taking the long view. One look at their demo and he knew Google had potential — a lot of potential. But though his interest had been piqued, he was pressed for time. As Sergey tells it, “We met him very early one morning on the porch of a Stanford faculty member’s home in Palo Alto. We gave him a quick demo. He had to run off somewhere, so he said, ‘Instead of us discussing all the details, why don’t I just write you a check?’ It was made out to Google Inc. and was for $100,000.”The investment created a small dilemma. Since there was no legal entity known as “Google Inc.,” there was no way to deposit the check. It sat in Larry’s desk drawer for a couple of weeks while he and Sergey scrambled to set up a corporation and locate other funders among family, friends, and acquaintances. Ultimately they brought in a total initial investment of almost $1 million.Everyone’s favourite garage bandIn September 1998, Google Inc. opened its door in Menlo Park, California. The door came with a remote control, as it was attached to the garage of a friend who sublet space to the new corporation’s staff of three. The office offered several big advantages, including a washer and dryer and a hot tub. It also provided a parking space for the first employee hired by the new company: Craig Silverstein, now Google’s director of technology.Already Google.com, still in beta, was answering 10,000 search queries each day. The press began to take notice of the upstart website with the relevant search results, and articles extolling Google appeared in USA TODAY and Le Monde. That December, PC Magazine named Google one of its Top 100 Web Sites and Search Engines for 1998. Google was moving up in the world.1999: On the road againGoogle quickly outgrew the confines of its Menlo Park home, and by February 1999 had moved to an office on University Avenue in Palo Alto. At eight employees, Google’s staff had nearly tripled, and the service was answering more than 500,000 queries per day. Interest in the company had grown as well. Red Hat signed on as its first commercial search customer, drawn in part by Google’s commitment to running its servers on the open source operating system Linux.On June 7, the company announced that it had secured a round of funding that included $25 million from the two leading venture capital firms in Silicon Valley, Sequoia Capital and Kleiner Perkins Caufield & Byers. In a replay of the convergence of opposites that gave birth to Google, the two firms — normally fiercely competitive, but seeing eye-to-eye on the value of this new investment — both took seats on the board of directors. Mike Moritz of Sequoia and John Doerr of Kleiner Perkins — who between them had helped grow Sun Microsytems, Intuit, Amazon, and Yahoo! — joined Ram Shriram, CEO of Junglee, at the ping pong table that served as formal boardroom furniture.In short order, key hires began to fill the company’s modest offices. Omid Kordestani left Netscape to accept a position as vice president of business development and sales, and Urs Hölzle was hired away from UC Santa Barbara as vice president of engineering. It quickly became obvious that more space was needed. At one point the office became so cramped that employees couldn’t stand up from their desks without others tucking their chairs in first.No beta search engineThe gridlock was alleviated with the move to the Googleplex, Google’s current headquarters in Mountain View, California. And tucked away in one corner of the two-story structure, the Google kernel continued to grow — attracting staff and clients and drawing attention from users and the press. AOL/Netscape selected Google as its web search service and helped push traffic levels past 3 million searches per day. Clearly, Google had evolved. What had been a college research project was now a real company offering a service that was in great demand.On September 21, 1999, the beta label came off the website.Still Google continued to expand. The Italian portal Virgilio signed on as a client, as did Virgin Net, the UK’s leading online entertainment guide. The spate of recognition that followed included a Technical Excellence Award for Innovation in Web Application Development from PC Magazine and inclusion in several “best of” lists, culminating with Google’s appearance on Time magazine’s Top Ten Best Cybertech list for 1999.2000: Built-in innovationAt the Googleplex, a unique company culture was evolving. To maximize the flexibility of the work space, large rubber exercise balls were repurposed as highly mobile office chairs in an open environment free of cubicle walls. While computers on the desktops were fully powered, the desks themselves were wooden doors held up by pairs of sawhorses. Lava lamps began sprouting like multihued mushrooms. Large dogs roamed the halls — among them Yoshka, a massive but gentle Leonberger. After a rigorous review process, Charlie Ayers was hired as company chef, bringing with him an eclectic repertoire of health-conscious recipes he developed while cooking for the Grateful Dead. Sections of the parking lot were roped off for twice-weekly roller hockey games. Larry and Sergey led weekly TGIF meetings in the open space among the desks, which easily accommodated the company’s 60-odd employees.The informal atmosphere bred both collegiality and an accelerated exchange of ideas. Google staffers made many incremental improvements to the search engine itself and added such enhancements as the Google Directory (based on Netscape’s Open Directory Project) and the ability to search via wireless devices. Google also began thinking globally, with the introduction of ten language versions for users who preferred to search in their native tongues.Google’s features and performance attracted new users at an astounding rate. The broad appeal of Google search became apparent when the site was awarded both a Webby Award and a People’s Voice Award for technical achievement in May 2000. Sergey’s and Larry’s five-word acceptance speech: “We love you, Google users!” The following month, Google officially became the world’s largest search engine with its introduction of a billion-page index — the first time so much of the web’s content had been made available in a searchable format.Through careful marshalling of its resources, Google had avoided the need for additional rounds of funding beyond its original venture round. Already clients were signing up to use Google’s search technology on their own sites. With the launch of a keywordtargeted advertising program, Google added another revenue stream that began moving the company into the black. By mid-2000, these efforts were beginning to show real results.On June 26, Google and Yahoo! announced a partnership that solidified the company’s reputation — not just as a provider of great technology, but as a substantial business answering 18 million user queries every day. In the months that followed, partnership deals were announced on all fronts, with China’s leading portal NetEase and NEC’s BIGLOBE portal in Japan both adding Google search to their sites.To extend the power of its keyword-targeted advertising to smaller businesses, Google introduced AdWords, a self-service ad program that could be activated online with a credit card in a matter of minutes. And in late 2000, to enhance users’ power to search from anywhere on the web, Google introduced the Google Toolbar. This innovative browser plug-in made it possible to use Google search without visiting the Google homepage, either using the toolbar’s search box or right-clicking on text within a web page, as well as enabling the highlighting of keywords in search results. The Google Toolbar would prove enormously popular and has since been downloaded by millions of users.As 2000 ended, Google was already handling more than 100 million search queries a day and continued to look for new ways to connect people with the information they needed, whenever and wherever they needed it.4Ram ShriramIs there really any need to give you “the rest of the Google story”? We all know Google today as a common household name. With their recent IPO and surging stock prices, they have become one of the largest companies in the World. Wow, would I have ever loved to be an angel investor in Google! Wait a minute, what about those two guys briefly mentioned in “Google Lore”; Andy Bechtolsheim, who we always seem to hear about as the “golden boy” of Google and Ram Shriram. Who was that last one? Ram Shriram? Who is this Shriram angel investor and how come we don’t hear more about him? Did he make any money? Is he still part of the company? Let’s take a closer look.Ram Shriram Joined the Google board at its creation. Prior to that, Shriram was vice president of business development at Amazon. com, reporting to Jeff Bezos, founder and CEO. During Shriram’s tenure at Amazon.com he grew the customer base from 3 million to 11 million users. Prior to Amazon. com, Shriram was president of Junglee Corp., a company that Amazon acquired in 1998. Before joining Junglee, Shriram was an early member of the Netscape Communications executive team. He initiated and built relationships with a targeted set of partners worldwide, helping Netscape to build market share and revenue momentum. In 1996, Shriram crafted Netscape’s indirect channels of distribution worldwide, and managed several hundred people with 16 direct reports across three continents (North America, Europe, and Asia), producing well over half of Netscape’s $346 million annual revenue. A year later, Shriram oversaw the OEM and website sales functions at Netscape, and helped generate more than $100 million in revenue from Netscape’s high-traffic website alone.Shriram also serves on the board of Yodlee.com and Elance.com, and is a leading angel investor in Silicon Valley.Does Ram Shriram really have the Midas touch (as recently ranked by Forbes magazine as number 3 on their Midas List)? Is he in fact the greatest angel investor of all time? Really, who is this man?In a recent interview with John Heilemann from Business 2.0, Heilemann gives us some insight into “the man with the Midas touch”.Heilemann states that “Ram Shriram is by nature a cheerful, easygoing guy, but if you want to get him a little miffed, just call him an angel investor.” What! He doesn’t want to be called an angel investor? Why not? Should he not take pride in the fact he is possibly the greatest angel investor to have ever lived on this planet?Shriram likes to think of himself as a “start-up sherpa . Through his operating company Sherpalo, Shriram says he operates a very basic operation with no staff and no offices. How could this “start-up sherpa”, Google God and the managing partner of his investment firm Sherpalo not have an enormous infrastructure with staff buzzing all around? Shriram admits “I have no staff, no office, no institutional scaffolding. There are times I think it might be nice to have deep-pocketed limited partners to provide me with some cushion. But I enjoy having no responsibilities except to myself, financially. And so far it’s turned out quite well."5Hey wait a minute, are we talking about the real Ram Shriram here? Shriram’s angel investment in Google’s IPO netted him more shares than any other solo investor, 5.1 million which he literally paid pennies for each (not public knowledge but most expect his original investment was between $100,000 - $200,000 USD). Last count has him owning 2.8 million shares and guess what Google’s stock was trading at when this article was written? Are you sitting down? $418 per share. Yes, my calculator said “error” as well when trying to calculate how much this investment made him and how much Google stock he presently owns.So how did this regular man develop his Midas touch? Of course it all isn’t a matter of luck. Shriram has a fairly impressive resume and has worked with a great number of top US firms, pre and post bubble. He appears to me a man driven by working on only startups. Could that be the secret? If you visit his website, he makes it very clear what sort of companies he is looking to invest in;Disruptive technologies, i.e. technology that addresses an existing customer base and provides a product or service that meets an existing need more cheaply and/or more efficiently. For example, when CDs were introduced to the music business, they were a disruptive technology, changing the status quo, and requiring users to purchase new hardware, despite there being a significant installed-base of record players and record collections. (See The Innovator’s Dilemma by Clayton Christensen, copyright 1997, Harvard College.)We are especially interested in:Break-through ideas in consumer Internet services;Patent pending technology with mass commercial appeal; and/orCreative new business models that alter the status quo and make the world a better place as a result.6Shriram states he is never active in more than three or four startups at once. “Almost every day I’m physically at one of them,” he explains. “I stay close to the scene of the crime.”7Perhaps success comes to Shriram because he states his formula is relentless independence. “My only loyalty is to what’s best for business, not to any set of constituents,” he states. “Sometimes that means going against the founders, sometimes against the VCs. So my judgments may be wrong, but they won’t be biased judgments.”8If Google wasn’t enough to keep this happy angel happy, he continued building his portfolio which now includes the following companies:GooglePlaxo247customer.comElanceCombineNetYodleeTellmeBusiness SignaturesZazzle.comPodShow.comNaukri.comPlatial.comAcquisitions:Junglee (sold to Amazon.com)Enosys (sold to BEA Systems)Some reports are coming in that at least a couple of his portfolio companies are not performing very well. If they ultimately fail like so many other high risk start-ups will that tarnish the reputation of arguably the World’s greatest angel investor (sorry, “start-up sherpa”) ever? I wouldn’t count on it. Perhaps some people might think we only remember the failures in life but when you have a $1 billion plus (and counting) angel investment windfall with a return of somewhere around 10,000 times your original investment, you will be remembered for that for a long time to come. If his portfolio companies continue to grow and become a success, I can only imagine what sort of legacy this man (“sherpa”) shall leave behind. Ram Shriram has lived behind the public spotlight, unlike so many other high profile angels, and perhaps we can all learn a lesson or two from the man who made the greatest angel investment of all time.Sources Include:1, 2 Michael V. Copeland, Business 2.0 magazine, Cable News Network LP, LLLP3KnowledgeRICH 06/064Google Inc.6Sherpalo Ventures www.sherpalo.com5, 7, 8John Heilemann, Business 2.0 magazine, Cable News Network LP, LLLP

There are no shortcuts to writing a winning Business Plan for a project that needs external funding. ​​Business plans are critical to the success of any new venture. It’s important to outline a business plan carefully. All the variables need to be considered carefully. Seeking inputs from others while creating a Business Plan is a great way to get an objective view since it’s way too important to get that element of objectivity in.As with most things in the business world, the size and scope of a business plan depends on the specific goals. If drafting it for investors, the plan needs to be more detailed. Potential investors might not be as familiar with the proposed industry so one has to clearly explain the concept and where it fits in.A business plan can take many forms, depending on the venture. But most plans will include the following main sections:Executive SummaryWithin the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. It must clearly state what the project promoter is asking for in the summary.The statement should be kept short and businesslike, probably no more than half a page. It could be longer, depending on how complicated the use of funds may be, but the summary of a business plan, like the summary of a loan application, is generally no longer than one page. Within that space, one needs to provide a synopsis of his/her entire business plan. This is the five-minute elevator pitch. It may include:A table of contentsCompany backgroundMarket opportunityManagement overviewsCompetitive advantagesFinancial highlights.It’s probably easiest to write the detailed sections first and then extract the cream to create the executive summary. Our expert team tries to keep it to just a couple of pages.Business Description and StructureThe business description usually begins with a short description of the industry. When describing the industry, it discusses the present outlook as well as future possibilities. Information is provided on all the various markets within the industry, including any new products or developments that will benefit or adversely affect the proposed project. All observations must be based on reliable data . The investor will want to know just how dependable the information is, and won't risk money on assumptions or conjecture.Emphasis is to concentrate on its structure. By structure we mean the type of operation, i.e. wholesale, retail, food service, manufacturing or service-oriented. Also whether the business is new or already established.In addition to structure, legal composition must be reiterated in regard to whether the business is a sole proprietorship, partnership or corporation, who its principals are, and what they will bring to the business.Once the project has been described, the products or services need to be described as well. The product description statement should be complete enough to give the reader a clear idea of the promoter's intentions. Unique features or variations from concepts that can typically be found in the industry are always helpful.Giving the project a competitive edge is critical to positive assessment.Market Research and StrategiesTarget Market needs to be defined. Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales. A market analysis also enables the entrepreneur to establish pricing, distribution and promotional strategies that will allow the company to become profitable within a competitive environment. In addition, it provides an indication of the growth potential within the industry, and this allows the promoter to develop his own estimates for the future of his business. The target market narrows down the total market by concentrating on segmentation factors that will determine the total addressable market--the total number of users within the sphere of the business's influence. The segmentation factors can be geographic, customer attributes or product-oriented.Once the target market has been detailed, it needs to be further defined to determine the total feasible market. This can be done in several ways, but most professional planners will delineate the feasible market by concentrating on product segmentation factors that may produce gaps within the market.The total feasible market is the portion of the market that can be captured provided every condition within the environment is perfect and there is very little competition. In most industries this is simply not the case. There are other factors that will affect the share of the feasible market a business can reasonably obtain. These factors are usually tied to the structure of the industry, the impact of competition, strategies for market penetration and continued growth, and the amount of capital the business is willing to spend in order to increase its market share.Spelling out the market analysis and describe the marketing strategy, including sales forecasts, deadlines and milestones, advertising, public relations decides how the proposed project stacks up against competition.Management and PersonnelProviding bios of the project promoter's company executives and managers and explaining how their expertise will help the promoter meet business goals is another important aspect. Investors need to evaluate risk, and often, a management team with lots of experience may lower perceived risk.Financial DocumentsThis is where the numbers are provided that back up everything that has been described in the organizational and marketing sections. Conservative projections of profit and loss statements, balance sheet, and cash flow statements for the next five to ten years. These are forward-looking projections, not the current accounting outputs.Revenue Generation:The factors that will make the project successful needs to be emphasized and listed here so a definite pattern of revenue generation emerges. This is the most important as well as crucial part of the Business Plan that overwhelmingly influence investor decisions. It must be explained why the added equity or debt money is going to make the project viable and more profitable. A potential lender is going to want to know how successful the project is going to be. Factors that support promoter's claims for success must be mentioned briefly. This gives the reader an idea of the experience of the other key people in the business. They'll want to know what suppliers or experts the promoter has spoken to about his business and their response to his/her idea. They may even ask the promoter to clarify your choice of location or reasons for selling a particular product.Projecting Market Share :Arriving at a projection of the market share for a business plan is very much a subjective estimate. It's based on not only an analysis of the market but on highly targeted and competitive distribution, pricing and promotional strategies. Even though there may be a sizable number of customers to form the total feasible market, the project promoter needs to be able to reach them through his distribution network at a price point that's competitive, and then he has to let them know it's available and where they can buy it. achieving effective distribution, pricing and promotional goals determines the extent to which the project owner will be able to garner market share.For a business plan, our experts estimate market share for the time period the plan will cover. In order to project market share over the time frame of the business plan, our experts consider two factors:1. Industry growth which will increase the total number of users. Most projections utilize a minimum of two growth models by defining different industry sales scenarios. The industry sales scenarios should be based on leading indicators of industry sales, which will most likely include industry sales, industry segment sales, demographic data and historical precedence.2. Conversion of users from the total feasible market. This is based on a sales cycle similar to a product life cycle where there are five distinct stages:early pioneer users,early users,early majority users,late majority users, andlate users.Using conversion rates, market growth will continue to increase the market share during the period from early pioneers to early majority users, level off through late majority users, and decline with late users.Defining the market is but one step in the analysis. With the information gained through market research, our experts develop strategies that will allow the promoter to fulfill the project objectives.Positioning The Proposed Business:When discussing market strategy, it's inevitable that positioning will be brought up. A company's positioning strategy is affected by a number of variables that are closely tied to the motivations and requirements of target customers within as well as the actions of primary competitors.Before a product can be positioned, several strategic questions need to be answered such as:How are competitors positioning themselves?What specific attributes does the product have that its competitors' don't?What customer needs does the product fulfill?Once these strategic questions have been answered based on research of the market, our experts develop the positioning strategy and illustrate that in the business plan. A positioning statement for a business plan doesn't have to be long or elaborate. It spells out exactly how the promoter wants his product perceived by both customers and the competition.Pricing:How the product is priced is important because it will have a direct effect on the success of the project. Though pricing strategy and computations can be complex, the basic rules of pricing are straightforward:All prices must cover costs.The best and most effective way of lowering your sales prices is to lower costs.Prices must reflect the dynamics of cost, demand, changes in the market and response to esixting competition.Prices must be established to assure sales.Product utility, longevity, maintenance and end use must be judged continually, and target prices adjusted accordingly.Prices must be set to preserve order in the marketplace.There are many methods of establishing prices:Cost-plus pricing. Used mainly by manufacturers, cost-plus pricing assures that all costs, both fixed and variable, are covered and the desired profit percentage is attained.Demand pricing. Used by companies that sell their product through a variety of sources at differing prices based on demand.Competitive pricing. Used by companies that are entering a market where there is already an established price and it is difficult to differentiate one product from another.Markup pricing. Used mainly by retailers, markup pricing is calculated by adding your desired profit to the cost of the product. Each method listed above has its strengths and weaknesses.Distribution:Distribution includes the entire process of moving the product from the factory to the end user. The type of distribution network you choose will depend upon the industry and the size of the market. Our experts analyze the competitors to determine the channels they are using, then decide whether to use the same type of channel or an alternative that may provide the promoter with a strategic advantage.As we've mentioned already, the distribution strategy the promoter chooses for his product will be based on several factors that include the channels being used by the competition, pricing strategy and own internal resources.Promotion Plan:With a distribution strategy formed, promoter must develop a promotion plan. The promotion strategy in its most basic form is the controlled distribution of communication designed to sell the product or service. In order to accomplish this, the promotion strategy encompasses every marketing tool utilized in the communication effort.Sales Potential:Once the market has been researched and analyzed, conclusions need to be developed that will supply a quantitative outlook concerning the potential of the business. The first financial projection within the business plan must be formed utilizing the information drawn from defining the market, positioning the product, pricing, distribution, and strategies for sales. The sales or revenue model charts the potential for the product, as well as the business, over a set period of time. Most business plans will project revenue for up to three years, although five-year projections are becoming increasingly popular among lenders.Competitive AnalysisIdentify and Analyze the Competition : The competitive analysis is a statement of the business strategy and how it relates to the competition. The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within the market, strategies that will provide the project promoter with a distinct advantage, the barriers that can be developed in order to prevent competition from entering one's own market, and any weaknesses that can be exploited within the product development cycle.Design and Development Plan:The purpose of the design and development plan is to provide investors with a description of the product's design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.There are generally three areas you'll cover in the development plan section:Product developmentMarket developmentOrganizational developmentEach of these elements needs to be examined from the funding of the plan to the point where the business begins to experience a continuous income. Although these elements will differ in nature concerning their content, each will be based on structure and goals.Goals For Product Development:Goals for product development should center on the technical as well as the marketing aspects of the product so that there is a focused outline from which the development team can work. Organizational goals would center on the acquisition of expertise in order to attain product and market-development goals. This expertise usually needs to be present in areas of key assets that provide a competitive advantage. Without the necessary expertise, the chances of bringing a product successfully to market diminish.Procedures:With goals set and expertise in place, set of procedural tasks or work assignments for each area of the development plan is put in place. Procedures will have to be developed for product development, market development, and organization development. In some cases, product and organization can be combined if the list of procedures is short enough.The development of procedures provides a list of work assignments that need to be accomplished, but one thing it doesn't provide are the stages of development that coordinate the work assignments within the overall development plan. Our experts suggest means to amend the work assignments created in the procedures section so that all the individual work elements are accounted for in the development plan. The next stage involves setting deliverable dates for components as well as the finished product for testing purposes. There are primarily three steps you need to go through before the product is ready for final delivery:Preliminary product review. All the product's features and specifications are checked.Critical product review. All the key elements of the product are checked and gauged against the development schedule to make sure everything is going according to plan.Final product review. All elements of the product are checked against goals to assure the integrity of the prototype.Scheduling and CostsThis is one of the most important elements in the development plan. Scheduling includes all of the key work elements as well as the stages the product must pass through before customer delivery. It should also be tied to the development budget so that expenses can be tracked. But its main purpose is to establish time frames for completion of all work assignments and juxtapose them within the stages through which the product must pass.Development Budget:That leads us into a discussion of the development budget. When formulating the development budget, our experts take into account all the expenses required to design the product and to take it from prototype to production.Costs that should be included in the development budget include:Material. All raw materials used in the development of the product.Direct labor. All labor costs associated with the development of the product.Overhead. All overhead expenses required to operate the business during the development phase such as taxes, rent, phone, utilities, office supplies, etc.G&A costs. The salaries of executive and administrative personnel along with any other office support functions.Marketing & sales. The salaries of marketing personnel required to develop pre-promotional materials and plan the marketing campaign that should begin prior to delivery of the product.Professional services. Those costs associated with the consultation of outside experts such as accountants, lawyers, and business consultants.Miscellaneous Costs. Costs that are related to product development.Capital equipment. To determine the capital requirements for the development budget.Assessing Risks:Finally, the risks involved in developing the product should be assessed and a plan developed to address each one. The risks during the development stage will usually center on technical development of the product, marketing, personnel requirements, and financial problems. By identifying and addressing each of the perceived risks during the development period, you will allay some of your major fears concerning the project and those of investors as well.Operations & Management:The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business. In fact, within the operations plan you'll develop the next set of financial tables that will supply the foundation for the "Financial Components" section.The financial tables that you'll develop within the operations plan include:The operating expense tableThe capital requirements tableThe cost of goods tableThere are two areas that need to be accounted for when planning the operations of your company. The first area is the organizational structure of the company, and the second is the expense and capital requirements associated with its operation.Calculate Overhead Expenses:Once the organization's operations have been planned, the expenses associated with the operation of the business can be developed. These are usually referred to as overhead expenses. Overhead expenses refer to all non-labor expenses required to operate the business. Expenses can be divided into fixed (those that must be paid, usually at the same rate, regardless of the volume of business) and variable or semivariable (those which change according to the amount of business).Overhead expenses usually include the following:TravelMaintenance and repairEquipment leasesRentAdvertising & promotionSuppliesUtilitiesPackaging & shippingPayroll taxes and benefitsUncollectible receivablesProfessional servicesInsuranceLoan paymentsDepreciationIn order to develop the overhead expenses for the expense table used in this portion of the business plan, you need to multiply the number of employees by the expenses associated with each employee. Therefore, if NE represents the number of employees and EE is the expense per employee, the following equation can be used to calculate the sum of each overhead (OH) expense: OH = NE * EEDevelop a Capital Requirements Table:In addition to the expense table, you'll also need to develop a capital requirements table that depicts the amount of money necessary to purchase the equipment you'll use to establish and continue operations. It also illustrates the amount of depreciation your company will incur based on all equipment elements purchased with a lifetime of more than one year.In order to generate the capital requirements table, you first have to establish the various elements within the business that will require capital investment. For service businesses, capital is usually tied to the various pieces of equipment used to service customers.Capital for manufacturing companies, on the other hand, is based on the equipment required in order to produce the product. Manufacturing equipment usually falls into three categories: testing equipment, assembly equipment and packaging equipment.With these capital elements in mind, you need to determine the number of units or customers, in terms of sales, that each equipment item can adequately handle. This is important because capital requirements are a product of income, which is produced through unit sales. In order to meet sales projections, a business usually has to invest money to increase production or supply better service. In the business plan, capital requirements are tied to projected sales as illustrated in the revenue model shown earlier in this chapter.For instance, if the capital equipment required is capable of handling the needs of 10,000 customers at an average sale of $10 each, that would be $100,000 in sales, at which point additional capital will be required in order to purchase more equipment should the company grow beyond this point. This leads us to another factor within the capital requirements equation, and that is equipment cost.If you multiply the cost of equipment by the number of customers it can support in terms of sales, it would result in the capital requirements for that particular equipment element. Therefore, you can use an equation in which capital requirements (CR) equals sales (S) divided by number of customers (NC) supported by each equipment element, multiplied by the average sale (AS), which is then multiplied by the capital cost (CC) of the equipment element. Given these parameters, your equation would look like the following: CR = [(S / NC) * AS] * CCThe capital requirements table is formed by adding all your equipment elements to generate the total new capital for that year. During the first year, total new capital is also the total capital required. For each successive year thereafter, total capital (TC) required is the sum of total new capital (NC) plus total capital (PC) from the previous year, less depreciation (D), once again, from the previous year. Therefore, your equation to arrive at total capital for each year portrayed in the capital requirements model would be: TC = NC + PC - DKeep in mind that depreciation is an expense that shows the decrease in value of the equipment throughout its effective lifetime. For many businesses, depreciation is based upon schedules that are tied to the lifetime of the equipment. Be careful when choosing the schedule that best fits your business. Depreciation is also the basis for a tax deduction as well as the flow of money for new capital. You may need to seek consultation from an expert in this area.Cash Flow Statement:The cash-flow statement is one of the most critical information tools for the proposed projecr, showing how much cash will be needed to meet obligations, when it is going to be required, and from where it will come. It shows a schedule of the money coming into the business and expenses that need to be paid. The result is the profit or loss at the end of the month or year. In a cash-flow statement, both profits and losses are carried over to the next column to show the cumulative amount. Keep in mind that if you run a loss on your cash-flow statement, it is a strong indicator that you will need additional cash in order to meet expenses.Like the income statement, the cash-flow statement takes advantage of previous financial tables developed during the course of the business plan. The cash-flow statement begins with cash on hand and the revenue sources. The next item it lists is expenses, including those accumulated during the manufacture of a product. The capital requirements are then logged as a negative after expenses. The cash-flow statement ends with the net cash flow.The cash-flow statement should be prepared on a monthly basis during the first year, on a quarterly basis during the second year, and on an annual basis thereafter. Items needed to be included in the cash-flow statement and the order in which they should appear are as follows:Cash sales. Income derived from sales paid for by cash.Receivables. Income derived from the collection of receivables.Other income. Income derived from investments, interest on loans that have been extended, and the liquidation of any assets.Total income. The sum of total cash, cash sales, receivables, and other income.Material/merchandise. The raw material used in the manufacture of a product (for manufacturing operations only), the cash outlay for merchandise inventory (for merchandisers such as wholesalers and retailers), or the supplies used in the performance of a service.Production labor. The labor required to manufacture a product (for manufacturing operations only) or to perform a service.Overhead. All fixed and variable expenses required for the production of the product and the operations of the business.Marketing/sales. All salaries, commissions, and other direct costs associated with the marketing and sales departments.R&D. All the labor expenses required to support the research and development operations of the business.G&A. All the labor expenses required to support the administrative functions of the business.Taxes. All taxes, except payroll, paid to the appropriate government institutions.Capital. The capital required to obtain any equipment elements that are needed for the generation of income.Loan payment. The total of all payments made to reduce any long-term debts.Total expenses. The sum of material, direct labor, overhead expenses, marketing, sales, G&A, taxes, capital and loan payments.Cash flow. The difference between total income and total expenses. This amount is carried over to the next period as beginning cash.Cumulative cash flow. The difference between current cash flow and cash flow from the previous period.As with the income statement, you will need to analyze the cash-flow statement in a short summary in the business plan. Once again, the analysis statement doesn't have to be long and should cover only key points derived from the cash-flow statement.The Balance Sheet:The last financial statement needed to be developed is the balance sheet. Like the income and cash-flow statements, the balance sheet uses information from all of the financial models developed in earlier sections of the business plan; however, unlike the previous statements, the balance sheet is generated solely on an annual basis for the business plan and is, more or less, a summary of all the preceding financial information broken down into three areas:1. Assets2. Liabilities3. EquityTo obtain financing for a new business, promoter may need to provide a projection of the balance sheet over the period of time the business plan covers. More importantly, promoter will need to include a personal financial statement or balance sheet instead of one that describes the business. A personal balance sheet is generated in the same manner as one for a business.In the business plan, the promoter will need to create an analysis statement for the balance sheet just as is needed to be done for the income and cash flow statements. The analysis of the balance sheet should be kept short and cover key points about the company.Now that we have explained why project needs a business plan, you should try and getting your Business Plan in place before pitching for funding / investment

The following are some various notes I've accumulated on Product Management. Enjoy!ResponsibilitiesProduct Manager is accountable for the overall success or failure of the products. This includes not only envisioning how your product will be successful today but how it will continue to grow revenue, profitability and market share over time.- maintain a prioritized list of market requirements that continually improve your products’ performance and the financial return to your organization- manage a rolling tactical roadmap that outlines what customers can expect from your going forward- lead cross-functional collaboration efforts across the organization in support of product objectives- interact externally with customers, prospects, analysts and business partners which include focus groups advisory committees surveys or customer visits- provide training and support to internal stakeholders who interact with the customers that use your products- establish and communicate performance metrics for your products and report progress versus plan- allocate most of your time to the 20 percent of activities that drive the highest probability of your organization’s success- execute a 3-5 yr vision and a shorter term tactical execution plan that covers a rolling 12 months- to balance competing priorities ask 2 key questions: does this help us attain the company’s product objectives more quickly? will supporting this request enable you to become more efficient by reducing future or redundant requests for your time?- Apply your time first to those things that help you attain your objectives or make you more efficient by reducing future demands on your time- Central mission of product managers is to know their markets, customers’ needs, competitors, and trends better than anyone else. Objective is to collect information from a variety of sources and focus on what is most important based upon the best data and facts available.Draw an influence map that visualizes people who will be the most important contributors to your product’s success and get access to a copy of the business plan or at least the sections that pertain to your dutyFigure out what the company is trying to accomplish with its product activities: creating new value through innovation or augmenting existing valueStartups focus on creating new value through innovation - a high degree of flexibility is required to succeed as your assumptions about the market and customer needs are continually challenged. Lots of facetime with clients and development team and a lack of detailed processes. Skills needed at this stage are:Creative thinkingEntrepreneurial SpiritConceptual and analytic abilitiesMidsized companies focus a significant amount of resources on augmenting their existing products to ensure continued high rates of growth - company is tapping into mass market and bringing along early adopters that initially made it successful. Customers are looking for complete products with all the bells and whistles AS WELL as a product roadmap. Skills needed at this stage are:StrategicProcess developmentCross-functional engagementAnticipating problemsCalm under pressureLeadershipBudgetingMature companies require both augmenting and innovation skills. Innovation is necessary to achieve ever growing revenue targets via partnerships, or M&A. Skills required are:StrategicLeadershipPolitical astutenessAnalyticHighly developed interpersonal skillsCross-functional abilitiesProfit and lossCalm under pressureThree Product Management ApproachesCapturing the voice of the customer - what customers tell you they want.Allows you to capitalize on readily available sources of info, many of which reside inside the organization.Enables you to augment existing product and preserve existing prod. dev. momentum while you gather necessary market info with which to make informed decisions about product’s future direction.Good for augmenting existing products. NOT well suited for developing new innovations given its reliance on explicit needs.Establish process to capture customer inputs from variety of sources, ranging from 1on1 convos to customer queries.Establish framework for prioritizing various inputsEnsure proactive collection and a continuous feed into a product decision framework for evaluationFollowing these methods will quickly point to ways that your existing product line can be augmentedDecision frameworks provide logical rationale for explaining why you decide to invest in one product enhancement over anotherWorkflow Analysis - What you observe about how customers do their job.Allows you to gain deep insight into how your customers and prospects accomplish their work and correctly identify the problems they deal with so you can provide solutions.Allows you to identify common business problems shared by a broad set of customers and prospects, which provide insight into larger market opps. to reduce inefficiencies, save time, save money and increase the satisfaction of those performing tasks as part of the business process.Allows you to be embedded in your company’s processes, resulting in a codependent relationshipUltimately this allows you to transform the way your customers accomplish their objectives and make your marketing and sales processes more effectiveGood for both identifying opps. to augment or creating new value through innov.Approach customers with a clear and compelling value prop, with a promise that your insights will generate a significant return that both parties can benefit from as these steps require a significant amount of cust. engagement and time.Spend time with customers and capture steps that are taken to achieve a desired outcome, the people involved and their interactionsDocument each step of a customer’s workflow - the interactions between people in a process, their productivity and output, to establish a baseline.Outcome-driven approach - Understanding what customers are trying to achieve as they do their jobs and the metrics used to define success. It postulates that once you know what jobs and outcomes cust. are trying to accomplish, you’ll be able to methodically create products and services that generate valueAllows you to determine which performance metrics matterAllows you to reduce variation in the success or failure of value creation activities by offering a means to fully understand customer success metrics upfront BEFORE any investment in developing or extending a product.Allows you to target areas that give you the best chance of enabling cust. success without wasting resourcesGood for augmenting existing prod. and creating new value through innov.Determine where you need to focus: end user, buyer, partner or someone else? Who in the value chain makes the most important judgments about value and the metrics used to define success?Capture the measures of value that define how customers want to get the job done: the process steps taken, outcomes they are striving to achieve, definition of what it means to do the job perfectly, and the constraints that stand in a way of successfully completing the job.To collect this info, conduct a series of customer interviews from a statistically significant sample of the client baseScore the collected data and chart them on a graph that shows areas of opportunity that reveal 3 categories of needs:Underserved - opp. for growthOverserved - opp. for ceasing investment. cost reduction or potentially disruptive innovationAppropriately servedTurn a blind eye explicit customer statements that don’t conform to the process you’re followingCustomer ResearchMarket Research - used to investigate new business opportunities, identify causes of problems and provide additional information to aid in making an important decisionsMarket information - size of market, how its segmented or current trendsMarket structure - identifying the major players and their market share, brand market share or market’s distribution structureBuyer perceptions - buyer needs’ assessment or perceptions of various brands and suppliersProduct - analysis of the available products, usage and consumption patterns, differentiation, segments served or satisfaction levelsNew Prod. Dev. - defining unsatisfied needs, product acceptance or communicationPricing - sensitivity, trends, or mapping existing pricing structuresCustomer satisfaction surveyCustomer list - acquire a descending dollar volume list of active customers from finance department. If list includes inactive clients than ever better.Look for patterns in active customer listWhat do top 20% of customers have in common?How far reaching are your products in terms of geography?Does the list contain resellers of products or end users?Look for patterns in inactive customer listWhy did they stop?Any common characteristics?Identify thought-leading and valued customers who will help you enhance your product and plan to meet them once readyCollect presentations and collateral - collect the most current sample of your cust.-facing presentations from each functional area currently in use across your organization (brochures, PR, publications, articles, advertising, product fact sheets, white papers, case studies, webinars etc.)Is the product(s) consistently portrayed?Do they discuss future dev. activities? if so, what is promised?Does the sales support materialWin/Loss Analysis DataAllows you to gain current understanding of how new customer or prospects perceive the product and organizationAllows the sales team to identify ways they can improve executionStart by reaching out to unsuccessful sales prospects or newly acquired client and ask a series of questions:What companies were involved in selection process?How did we stack up?What are our perceived str and weaknessesWhat factors led to our victory or loss?Can you overview the decision-making process? who was involved and what were the key selection criteria?What could we have done diff. to improve?Customer Agreements and Signed ContractsAsk for recently signed customer agreementsAnalyze patterns and any changes that emergedAvailable Competitive InformationRequest competitive information available ‘in the public domain’.This Allows you to develop a superior market position by understanding customer needs better than anyone elseIdentify Internal Customer Data SourcesInvestigate where databases of customer information are being kept within your organizationLook in incoming customer support calls, online client discussions groups, fan page interactions, info related to lead generation, trade shows, conferences etc.Defect or “bug” reportsMany of these defects are identified during QC processOthers make it past QC and are identified by customersOnce a defect is confirmed, a priority rating is assigned to the problem using the following framework: critical issue, high priority, medium priority and low priority.Ask engineering team for defect reportsProduct Cost or Profit and Loss InformationAcquire a product P&L statement IF there is oneAsk Finance to walk you through it to make sure you fully understandThis allows you to determine if your product(s) are profitableExisting Product-Related MaterialsProduct roadmaps, visioning documentation, product-level business cases, product launch materials etc.External info sourcesAnalyst ReportsSocial mediaBusiness IntelligenceSurvey your internal constituentsWhat do you see as the biggest opps. and challenges in next 2 months to a year? 2-5 yrs?Do you believe we have clear prod. vision? is it clearly communicated throughout the org?Does our prod. roadmap enable achievement of our vision and plan?Are we on track?Is prod. management appropriately aligned with other functions?3 yr product visionbounce off ideas with thought leaders in your org. and then clientsThink of a 3 yr vision and begin with end in mind. Highlight what will happen at end of year; mid-point and end of 3 yearsList strategic product milestones in a ‘vision slide’ along with key deliverablesProduct MilestonesCall thought leaders together and facilitate a brainstorming session to capture their views of the marketBefore meeting, send every attendee explanation of meeting objective and copy of product vision MARKED DRAFTDuring meeting, capture all comments in bullets on the slideKeep everyone involved although a few will dominateStart from discussion of current state, jump to end and then goto middleAfter the meeting review the ideas and follow up with those who provided itPull out customer list and reach out to key customers and prospectsDiscuss with sales people and thought leaders in org. who the key customers areSetup meetings, preferably in person and take the sales person alongDuring meetingExplain objectives and ask the client where they believe the market is headedHave them describe the top 3 challenges they are facing today and how they are handling them.Explain to them you are finalizing thoughts regarding future direction of product and that you’ve developed a plan that you want to get their feedback on.Post-meeting assess customer’s reaction and see if the vision addressed any of the top 3 challenges the customers told you aboutFurther define each concept for the vision slidePull together several short paragraphs that describe the substance behind the concept; flesh out each conceptual milestone that will enable everyone in your org. to receive the same message and help you manage client expectationsThe presentation slide detailing each milestone contains:Title of milestoneDescriptionCustomer value prop.Operational considerationsDate slide was createdHave 1 slide per milestone and create short paragraphs that describe the substance behind the conceptual milestone. i.e. FOR “public accountability” milestone, write: Public accountability reporting will provide relevant executive level summary information and trends at a glance in real time to support governance and public reporting mandates.Next construct the value prop outlining why your cust. should be interested in the capability you’re planning to bring to market. i.e. Alpha Tech Ventures’ real-time public reporting capability will enable executives to review and effectively comply with mission-critical governance and public reporting mandates and reduce the risk of incurring a legal liability by 50 percentFinish with operational considerationsCreate a Solid Business Case - cost benefit analysis justifying investment. Business case details the various benefits, costs, and risks of pursuing a suggested course of action and supports the request for a budget to enable the effort to proceed. This allows you to align executive leadership team behind your product vision, build momentum, enlist support from diff. components, and align thought leaders, key customers and prospects behind your vision.Executive summaryConsolidation of most important info that enables a busy exec. to understand at a glance (1-3 pages)Should be the last section you writeProblem or opportunity statementProvides the necessary context to understand your request for additional resources.Needs to be aligned with company’s overall business strategyDescribe what is happening today that provides an opportunity to capitalize on (i.e. if you identified new market niches that are underserved or a means to improve your product’s market performance by adding services)Solution overviewHigh-level description of desired outcomeExplanation how your proposed sol’n addresses the market opp. or problem that you’ve highlightedRange of alternatives consideredDescribe why you’ve selected preferred option, demonstrating you’ve considered all available options to sol’n you’re proposingCost estimatesOutline total projected costs and future financial return on investmentCosts include prod. dev costs, FTEs, QA/testing, maintenance etc.Benefit analysisOutline benefits with the goal to compare estimated costs with benefitsProjected financial returns need to exceed anticipated costs and hurdlesMention all benefits: incr. market share, cust. satisfaction, decr. employee turnover etc.Implementation timetableState key milestones and how long it will take to bring new capabilities to marketIdentify what resources will be required to make this happen.Critical assumptions and risksConclusion and final recommendationsSummarize key themes and benefits and anticipated financial returnsProduct Lifecycle Management (PLM) Framework - guides products from an idea to ultimate retirement, going through 4 distinct stages (introduction, growth, maturity and eventual decline). PLM integrates cross-functional product activities - information, people, and processes throughout the product lifecycle with the aim of increasing efficiency and reducing execution risk.This allows each participant to understand the overall process, their role and expectations.This allows the company to create standardized deliverables that other parties involved in the process are counting on to do their jobs7 Phases of product lifecycle - each has defined activities, owners, collaborators and a descr. of expected deliverables at each stepStrategyRequirementsAnalysis / DesignDevelopmentDeploymentOperationRetirement12 diff activities that take place over the course of a product’s life - and each has defined owners, collaborators and descr.Strategy (development)Business case (justification)RoadmapRequirementsPlanAnalysisDesignBuildTestDeployOperateRetireDetermine who owns the PLM process. If none exist, then collaborate with key participants to define the PLM process for your org.Developing requirements - gathering inputsDetermine which product management methodology to useIdentify which sources you will use to collect inputs fromCollect relevant inputs into a central repository and convert the data into a useful formCreate a rational framework for evaluating and turning centralized inputs into prioritized requirements (Product Decision Matrix)Begin by drafting the metrics you intend to use to filter the inputsPresent draft to senior leadership team for buy-inExplain to everyone involved, and the requirements that rise to the top become the foundation of your product roadmap.Once you create your own product decision matrix, you end up with a prioritized list of high-level requirements in descending importance that list opp. your org. has to create value for customers.Form a standing cross-functional team of members from various areas to look at each prioritized requirement from an operational perspective and identify potential issues before they happenSelect people knowledgeable about the product and good team contributors with influence over their counterpartsHave a range of divergent perspectives (not just yes people) and preferably those in the same room as youList possible candidates (2 from each functional area)Explain mission of the group and decide on first meeting date as well as frequencyYou now have a req. list vetted by cross-functional counterparts for operational feasibilityDeveloping Product Roadmaps - operational plan that highlights your products’ quarterly development activity over a rolling 12 months. Most companies have 1 roadmap per product or family of related products. It’s best to create 2 types of product roadmaps: internal and externalRelease - planned deliverable that is slotted into a calendar quarter over the course of the annual plan.Items placed in roadmap provide high-level descr. of each release (not intended to communicate detailed scope or cost)Releases fall into 1 of 3 categories and you must balance these to sustain market growthNew Value Creation - release of a new product, component, capability or feature that gives customers increased value.Maintenance and Support Releases - updates to existing cust-facing products that preserve product’s revenue stream. This does not create new value but enables cust. to continue to extract expected value from productInternal Product Releases - investments made in the components of your offerings that aren’t seen by customers. These help daily ops.Internal use - roadmaps are used to coordinate cross-functional activities in support of a release, manage expectations of internal constituents, drive accountability and measure product dev. team’s productivity and performance (scope, cost and schedule)Your company’s staff must be trained on new products’ capabilities to support client inquiriesMarketing must be prepared to get the message outSales must be ready to communicate value of release to clientsExternal use - used to manage client expectations and as part of the sales processProduct Development - execution phaseAlign incentives by drafting shared performance-based objectives between different functional groups and improve coordination.This allows the company to achieve their desired goals by linking them to compensationEngineering and product management team need to accurately estimate the time and resources needed to create a given requirement.Product management must communicate clearly about the scope of what is to be accomplished based on previous prioritizing efforts; this involves relating priorities back to the business value they are attempting to createRevise the cross-functional meeting structureHold coordinated meetings at standard intervals (at their end) in the PLM process:Strategy - Objective is for prod. manag. to propose the new prod. capabilities to internal cross-functional prod. dev teamReq. - Objective is to establish a final set of expectations that clearly demo. that the commercial success criteria can be metObjective is to focus on the proposed design of prod. or capabilitiy and seek approval from biz owner and buy-in from extended cross-fxnal team members who would support the prod. post-dev.Development - Obj. is to be sure that your prod. is ready to launch, with testing and refinement complete and sign-off from biz owner and cross-fxnal dev. team.Include the business owner and internal cross-functional team members involved in prod. dev.This allows you to make sure that there is a business owner review with the extended team to agree to the plan, mitigate risks and improve overall coordinationFurther Defining Requirements - Various sections of the requirement document. It’s important to maintain flexibility and to indicate that any plans are subject to change based on market conditions (markets, competitors, M&A etc.)About this documenthistory of the doc (date, version, who made changes, descr.)descr. of key termsBusiness analysisDescribe business need at a high level and highlight key business questions the new capability is attempting to addressProposed release date tied to product roadmapList high-level biz/market req., with associated descriptions, If necessary insert SWOT and any underlying assumptionsFeature Matrix - prod. dev. estimates for prioritized list of features. Goal of this is to provide a ‘cut off-line for prod. dev. based upon available time, resources and moneyHigh-level use casesUse cases capture detailed biz req. which are then turned into fxnal specs for your productCreate a diagram illustrating the system that the user is interactingw ith to receive value from the new capabilities you’re developingList an actor heirarchy if more than 1 party is using product and list all use cases that have been developedFunctional req.These are the specific elements that define what a product is supposed to accomplish and are used to the guide the design of the productThese roll up into a use case - into the behavioral elements of how the product will be usedCompliacne req.Regulatory compliance refers to any rules, regulations and req. that re relevant to meeting a governing body’s laws or mandated procedures.These might include data use rules, security, contractual requirements, governmental obligations etc.Report req.Inputs, layout, report fields, headers and footers and any groupingsUI req.Begin with a conceptual site map and detail the associated navigationOften presented in a diagram detailing the analysis that has been conductedEnvironment req.This often includes architecture standards relating to system performance and any environment considerations as well as operational and integration requirementsIterating with customersinteract with customers as much as possibleTake a structured approached with your customers that lets them know that you value their timeStart by defining an objective.. what are you hoping to accomplish?Assess how much time they have by asking them upfront.Pick an appropriate forumSite visitsSurveysVirtual meetingsVisits to your corporate locationRegional client meetingsClient conferencesFocus groupsCreate a frameworkWalk them through product visionReveal your roadmap quarter by quarterDemo a prototypeExplain various pricing scenariosSend a thank you noteCustomer Advisory CouncilsAllows you to put a structured client input process in place to aid your product activities by ensuring thoughtful customer input into strategic or tactical product matters.Typically comprised of 7-9 clients who possess a keen insight into your market or the use of your productAsk yourself what roles do you intend to include in your council? hands-on users or economic buyer who may not be the hands-on user?Geographic distribution - its better to have those in the same room as youAdvisory council charter should cover the following topicsObjective of the groupFrequency of meetingsMeeting durationMeeting locationParticipants in the councilTimeframeMeeting dates and topicsOther expectationsExpensesPoint personSupporting the Product LaunchLaunch stylesLaunching your product into an existing marketExisting markets typically have a # of dominant competitors all jockeying for market shareRequires you to have a distinct value prop that lets you stand outLaunch plan needs to single-mindedly focus on acquiring new customers and creating demand for your productLaunch plan relies on ‘all in’ approach using every available demand creation tool at your disposal to gain maximum attention over a specific timeframeLaunching your product in a new marketPrepare to invest for the long term with the objective of driving awareness and ultimately adoption of your productTarget early adopters to establish momentum and spark interest of a currently uncaring mass market by educating themResegmenting an existing marketThis effort focuses on carving out a piece of an existing market by offering a lower-priced product than your competitors or by targeting a segment of the market that plays to your product or services strengthsObjective is to both educate and capture market shareIf market is ready to buy then consider the “all in” approach; if not focus on attracting early adoptersCreate a product brief on the product or capability you’re launchingOutlines the critical information regarding your value prop., customer audience you’re targeting and the key messages and channels you’re use to get your message outContent will be created once and used many timesThis allows your executive team to see your thought process and value prop. before the launch.Marketing will use the structured content you provide to professionally craft the message in their marketing plan and sales support materials as well as select the right channelsIt contains the following information:Product name and release dateWho the product is targeted toDescr. of the product or capabilitySummary of the key customer business needs that the prod. or capability will addressCustomer value prop.Client impactDescr. of the launch plan and timing of key eventsBenefits and featuresSales and cust. service talking pointsPricingResources and additional info.Create a launch plan frameworkEstablish your launch date and work back from thereList the activities that need to take place before that date to determine when your plan needs to startCreate a calendar that includes dates and breaks time down into weekly increments over that timeCreate columns to list the activity, owner, deliverable, target and source of needed material in chronological sequenceMarket Dynamics and Competitive Analysis FrameworksPoint-in-time Analysis: Market view analysis generally consists of the following. Place each in 1 slide.Market focus - Frames the specific market that your company is targeting and sets the context for other aspects of the analysis (i.e. BI software sol’n for U.S. hospitals)Market Size and anticipated Growth Rate - (i.e Detail how the segment targeted fits inside the overall U.S. healthcare market)Current Company Market Position Overview - Market leader? contender or further back in the pack? List company’s market share and detail where company fits into context of competing companies all vying for a piece of the BI sol’ns market)Market Segments Description (i.e. BI sol’ns for hospital finance, clinical decision support, and client satisfaction)Top Competitors Matrix, segmented by market - describe how competitors compete with organization. Do they only impact 1 market segment or multiple? List competitors on left and have series of columns that show revenue and market segments they play inDetailed Competitor Breakdown -Prepare short narrative describing each top competitor’s profile, strategic direction and partnerships.The profile paragraph should outline each company’s primary focus and what differentiates their market approach from competitors.Strategic direction segment should outline known strategy and where you think the company is headedCurrent Position Overview - Describe company’s core capabilities. Ask, what are the core gaps that need to be filled? What segment-level opps. exist that can be capitalized on?Buy-vs-Build Opportunities - Outline each gap that needs focus and the str and weakness of the current position. Also frame whether it’d be better to buy or build certain aspect of products’ future capabilitiesPossible Acquisition Candidates - detail possible targets over short and long-term to shore up competitive position. List target companies, revenue and market segment they serveList of Risks and Contingencies - detail risks with buy recommendations.Is it clear how target company should be valued?Spell out contingency plans. What happens if preferred target is not open to being acquired? what is next step? will organic dev. be pursued or other acq. targets be looked at?Potential Competitive MovementsHave competitors been on acq. binge lately?Have they raised capital?Are they trying to control strategic channels important to business?Deep Dives into Specific Competitors - Create a quick summary of each competitor, annual revenue, # of employees, ownership status, products and any conclusion that has been reached.Narrative Competitive Analysis: Customer-facing frameworkName of competitorOrg. historyBusiness model and revenuesMissionVisionStrategyEstimated client levelsPartnershipsPositioningDetailed analysis of product/service offering and stated benefitsPricingRecent developments