To Business Plan or Not to Business Plan

This should never be the question. I have come across many folks in the innovation space who denounce business plans, suggest writing a business plan inhibits forward motion and the entrepreneurial spirit. Bah-humbug. This blog is in defence of business planning.

What I am definitely NOT saying:

1. Months should be dedicated to carefully writing a document, with perfect grammar and prose, to described the business plan.

2. A consultant needs to be hired to do something like #1.

3. An entrepreneur should stop all other activities until the business plan is written.

4. The plan needs to be written at all.

5. A business plan should be created and then followed rigidly for the next several years.

An important distinction is:

Every entrepreneur should have a well thought out business plan.

Every entrepreneur needs to write a business plan.


Many people dread the idea of writing a large document. Although I recommend writing things down because it generally results in a new level of thought about the subject, if it turns your stomach, find a creative way to get the same result. Video tape it. Make story boards. Put it in a series of tweets (as long as you are ok with it being public). Use one of many templates available on the web, with fill in the blanks. Another benefit to some kind of record of the plan is the ability to review the original goals and modify either the goals or the direction the business is taking at a later date when you’ve learned more.

Business planning is not the opposite of the Lean Startup method, or the enemy of innovation or entrepreneurship. In fact, a good business plan encompasses the lean startup method, because it has at its core plenty of research. And it’s fluid.

What is important: The elements of the business plan.

Can you answer the questions:

  • What is unique about your business?
  • What is the competitive environment for your product?
  • Is there a market for your product (who is going to buy it and how much will they pay because you are solving a problem/fulfilling a need/relieving their pain)?
  • How are you going to finance your business?
  • Can you make enough money to support the investment required?

Most importantly: Are you being honest with yourself that you’ve answered these questions to the best of your ability? Not asked three of your friends and going with your gut. Or asked questions in such a way that you are sure to get an affirmative answer. For example, if you asked people if they would like a more fuel efficient vehicle, most would say yes. Fewer of them would be enthusiastic if it mean they had to pay twice as much for their car or double the insurance premiums.

There are times when there isn’t much data to draw on to validate your assumptions but even then there are potential customers to ask. This is the essence of the lean startup method. Get the minimum viable product into customers/users hands and see how they like it. Incorporate your findings into the business plan. But the principles of business planning still remain. As you learn from more potential customers, your plan will mature, you will be better able to answer what need your product fulfills and therefore be better able to define the market and financial plan.

Be innovative in how you determine and articulate your business plan but planning it has advantages:

  • makes you think through your assumptions about the business
  • brings perspective about the external environment
  • helps to foresee challenges
  • helps focus activities and spending
  • required to seek funding from all sorts of investors: government, angel, venture capital, traditional lenders

Beyond the Internet of Things (Already!)

Can Moore’s law – that computing capacity expands exponentially – be extrapolated to the Internet of Things (IoT)¹? This is one of the questions that went through my mind at the MedEdge Summit (#MedEdge)  – a half day with the tag line ‘disruptive innovations in healthcare’.

It was a really good meeting. For me, a memorable meeting makes you think. I met interesting people, from diverse backgrounds in healthcare-related industries. I learned new things. Healthcare is a good example of an area at both the forefront and tail end of technology innovation. Perhaps that’s why the themes of change and connectivity resonated for me.

Here are some of the observations and predictions I had after attending the Summit. I’ll end with some thoughts about Moore’s Law.

For medical care, this initiative is going beyond the Internet of Things, to the Internet of Healthcare. The Internet of Healthcare includes people – updates from and to all the medical professionals – combined with data from other sources. The pilot project was presented at the Summit by collaborators from Mackenzie Richmond Hill Hospital, Thoughtwire and Blackberry. Blackberry has some interesting inputs, especially in security, a significant challenge in the IoT, and even more so in healthcare.

This is the forefront of technology, beyond the internet of things to the internet of all objects, devices, information, and people involved in caring for patients. And yet, at the MedTech Summit, there were reminders of the challenges in the business of healthcare and particularly to commercialization or adoption of novel products. I learned about OHIC (Ontario Health Innovation Council), an initiative of the Ontario Government with a mission to accelerate the adoption of new technologies into our healthcare system. I particularly liked the diagram, a motif in this OHIC report , with a hustling Innovation Broker in the centre of a mesh of the myriad stakeholders in healthcare.² This is a connectivity of a different type. Different forms of communication are required for the connection between patients, their families, medical practitioners, healthcare organizations, businesses, regulatory bodies, academic institutions and investors. This abundance of stakeholders makes commercialization particularly challenging in the healthcare sector, compared to others, like manufacturing, consumer goods or consumer software (apps).

I suspect we’ll see a rise in innovations in home and consumer-based healthcare but the business environment for this sort of product can be challenging. Physicians can prescribe outside medical care, such as oxygen therapy, physiotherapy or massage. Suppliers of these sorts of services or goods can’t actively recruit customers, since the physician decides who needs the product. They can’t set the price, since reimbursement, from either the government or insurer, controls pricing. Product innovations and features are limited by regulatory bodies. New offerings in this area will need creative business plans to flourish.

How fast will we see change in healthcare? The revolution in the IoT is the exchange and compilation of information from, and about, many things. Not all the things communicate like computers. People, animals and other complex phenomena like the weather use hard to model processes to make complex and random moves or subjective decisions. Objects like furniture and cars, especially those manufactured in the past, have no ability to communicate electronically and while newer versions can do so, the world is still full of old ones.

Connecting people and inanimate things into the Internet of Things is no easy task and will take more than just advanced computing power. It will require completely new ways to make connections and this will take time. My prediction for the Internet of Things is that it will bring policy and policy reform in many iterations and this will slow its growth. Thus, the creation or formation of the IoT is going to depend on a whole lot of other factors than the processing speed of a semi-conductor. Moore’s law is going to need a few amendments that take people into consideration before it can be applied to the IoT, because people, after all, is what healthcare is about.


¹ The Internet of Things is a concept that encompasses connecting all objects, – books, pill bottles, pets, cars and everything else -, on the world wide web or through other electron communication systems. The internet of everything doesn’t exist right now and probably will never, but just might. However, currently there are internets of a subsets of things, for example the connection of everything in your house.

² It reminded me of why I have ‘spider’ in the name of my business. Here’s the blog post.

Life Sciences Startups – Some Things are Old, Some Things are New

After more than a decade in the doldrums, life science startups are back in vogue. What’s new and what has stayed the same in the path to commercialization for these early stage companies? Yesterday, I attended an event at MaRS, a panel discussion on the Road to Commercialization in the life sciences.

I cut my business teeth in the biotech boom of the mid ’90s – there’s plenty that’s changed, but certain concepts have prevailed. Based entirely on my recollections of the sector twenty years ago, which may be a little hazy or lop-sided, because that’s the way human recollections are, here is what I see as evolved and entrenched between the life science commercialization of 2015 compared to 1998.

What’s different – the ‘hot’ topics¹. Currently epigenetics, obesity, big data approaches to solving problems. In the past, we’ve been through therapeutic antibodies, vaccines, gene therapy, pharmacogenomics, nanotechnology.

What’s the same – discussion about scarce resources, with generalizations that there is insufficient capital for investment in early stage companies. This may be especially true of the valley of death, the gap in interested investors to support companies between startup and IPO or between in vitro proof of concept/target and first clinical evidence of efficacy.

Different – the level of sophistication of investors in the life sciences. Although only a fraction of the total investor pool have the risk tolerance for investment in the sector, those that do are guided by due diligence from people with advanced biomedical degrees and strong connections into the healthcare industry. This wasn’t the case years ago.

The Same – investors say there is plenty of available capital for good quality companies.

Different – consumption of healthcare. I can’t possible do this topic justice here, but how decisions are made about what products are used to treat patients has changed. In Canadian, cost cutting and group buying patterns pervade, in the US ObamaCare has been introduced. Globally, there are new markets.

The Same – debate about the need to support an independent Canadian life sciences sector and associated laments about buyout of Canadian companies by US or multinational firms. This ongoing debate usually raises discussion about a globally competitive market for healthcare products.

Different – the level of government involvement and support. The reason I ventured out from my comfy academic environment into the world of business in the mid ’90s was that public support for research was shrinking, shrinking like a popped ballon, and I believed the future for medical innovation was in the public domain. Today, there are many accessible government programs for early stage companies. Technology transfer from academic institutions reached a zenith and has been replaced with a multitude of programs to support the creation of startup companies in the past couple of years. There were few familiar faces at the event, whereas if I attended in the 90’s, I would have known or recognized at least half the crowd.

I’ve been busy over the past decade supporting commercialization of technology and startups in communication, software, hardware and manufacturing sectors. It’s a pleasant surprise to see the life science startup system has become more sophisticated. That’s a good change – more knowledge, new people, more nurturing support. The things that have stayed the same, and are the same in any sector: good companies, those likely to attract investment, are those with valuable solutions for an identified market, with sound management and business planning.


¹All medical needs are always of interest but certain technological solutions and disease states garner more attention at any given time.

Neighbours in the Innovation Ecosystem

I have been asked if the services offered by The Spiders Edge are competitive with local government agencies that support entrepreneurs, like the Spark Centre, the Business Advisory Centre of Durham BACD, MaRS, economic development agencies and their equivalents in other regions in Ontario and Canada.

Absolutely not. I believe we are complementary. In fact, one of the first questions I would ask any potential client is whether they had taken full advantage of such services.

It takes a lot of different kinds of expertise to support the growth of a single new company and every young company is different. Each company creator, entrepreneur or inventor, brings a unique mix of skills and knowledge with him or her. This means that the type of services they need to complement their own expertise is unique.

The following lists the components a startup or small technology-based company will need early in its development. There are likely other specialized things individual companies will need.

  • business strategy, including:
    • competitive position
    • value proposition validation
  • accounting
  • finance
  • legal, including
    • incorporation and company structuring
    • shareholder agreements
    • intellectual property protection
    • legal agreements with suppliers, client
  • manufacturing, prototype development, productization, suppliers, facilities, certifications
  • sales expertise and experience
  • marketing plans
  • marketing materials
  • business development planning, including
  • budgets
  • financial projections
  • hiring of staff
  • product delivery logistics
  • quality control
  • developmental milestones and timelines
  • relationship management, networks

Depending on the founders skills set, some of the above will need to be outsourced. The company will also need the funds to support its growth and development. Finally, people to do the related tasks are needed, including the critical task of raising the money.

Organizations like Spark, MaRS and the BACD will work with entrepreneurs to help them decide which of the above elements they need to develop to move their business forward and also provide access to experts to facilitate this. Economic development folks can provide assistance with facilities, suppliers, labour force, and networks. Various professionals, such as lawyers, accountants, sales and marketing professionals, and leadership coaches can provide services in their area of specialization.

The Spiders Edge offers services with a focus in three areas: business strategy, intellectual property, and access to funding. What sets me apart is the way I can deliver these services. I want to be an integral part of the business, involved in the day to day operations, doing what needs to be done, but also making use of the skills I have, to complement those of the company founders. I have the flexibility to contribute a variety of business development skills and understand the science behind the technology.

Each professional service provider, government-funded agency, and entrepreneur is part of the local innovation ecosystem. We all have our part to play, and we all need each other to create a vibrant, healthy environment where businesses flourish.