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Wednesday
Nov162005

Does a startup need management systems?

I recently attended the excellent ANZA Technology Network "Gateway to the US" conference which showcased 25 Australian and New Zealand technology companies.

George Foster of Stanford gave the dinner keynote speech on day two. He spoke on the topic of "Management Systems - The When and the Why: Lessons from Early Stage Companies".  The following day, there was a interesting panel discussion on "Venture Capital Funding" featuring Don Lucas, Jim Marshall, and John Scull, and moderated by Larry Lopez. An attendee referred to George's research and asked the panel for their opinion. 

"We're not systems kind of guys." was the initial chorus, but John Scull then provoked some thoughtful discussion. To summarize:

  • Well, you gotta have a CFO. The CEO needs a financial partner.
  • You need discipline in the sales process.

Looks like we have at least two management systems so far: Finance and Sales.  Let me suggest a third essential management system. All good things come in 3's.

We are all in the business of selling stuff at a profit to meet customer needs. We now have two systems to cover "Selling" and "Profit".  How about managing "Stuff that meets customer needs"?  Let's manage the process of identifying specific needs, validating them, developing the solution and delivering it to the market faster than anyone else.  Great technology is not enough.  90% functionality and in the market is better than 49% right and way too late.

The third system is called product management, or more narrowly product development.  There are plenty of good definitions, e.g. PDMA glossary. After seeing the glossary you are saying: "Sacre Bleu Josephine, that looks really complicated, expensive and cumbersome!" 

But you can do it simply and inexpensively. Moreover, if you have a globally dispersed or outsourced team,  you risk loosing stuff in the cracks if you don't do something.

You need three things: a simple product development process, some basic project management disciplines, and some means of managing your product data.  Like sales and finance, you can do it on MS Excel, a desktop app, or some cool hosted system.  When you get bigger you can graduate to industrial strength.

In the end, all three management systems are not about documents and procedures to follow. They are not about IT applications.  They are a thought process for managing your business, a way of ensuring accountability, and a means of managing risks.  They are the platform you stand on when you set your ideas free.

Bottom Line: You need three basic management systems: product, sales and financial. Review your business. Are you covering the bases? Keep it simple. Avoid bureaucracy. Focus on the thought process and accountability.

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