As a start-up, you know that sometimes project planning can be a challenge. You might have a general idea of what your group is trying to accomplish, but it doesn't always flow smoothly. New ideas pop up everyday—new successes and challenges—and new information comes down the pipeline that requires you to switch directions at a moment's notice.
That just comes with the territory in running a successful start-up; it's one of the things that makes launching a startup so fun and rewarding. But that doesn't meant that a start-up can't incorporate some pre-planning into the mix of unpredictables. If you want to get stuff done, it helps to have a solid process in place that allows you to organize your work into manageable pieces so that you can stay on time and under budget.
One very efficient process is called the Phase-Gate model of project planning, and there are many successful variations of this model. It's important to note that the Phase-Gate model can be applied not just to startups, but to any kind of company, group, or organization that desires to run more efficiently and clearer communication.
My version of the Phase-gate model is a series of 5 steps. At each step (the "phase"), you re-evaluate the potential success of your project and decide whether to continue or quit (the "decision gate"). This makes it easier to avoid going over-budget and easier to identify and stop the projects that won’t be successful. Knowing when to cut your losses is just as important as knowing how to cut costs.
For the purpose of understanding, I split these 5 steps into 2 phases: the planning phase and the execution phase. The first 3 steps included within the planning phase are all meant to describe how you want to reach your goal. The 2 steps in the execution phase are when you carry the plan forward. The diagram below shows a similar project model used by the EPA.
If you are looking at creating a start-up company, or a new product for an older company, the first question you want to ask is, "What type of product or service will help make people’s lives better?" When you answer a question like this, you should be open to anything. Don’t discount any of the new ideas (no matter how silly) before moving on to the next step. The purpose of the first step is to get as many ideas as you can without worrying about whether they will work. For an example, we can focus on one of Sprinklebit's core goals: spreading investing information and investing strategies. There are a number of ways this need could be filled: newsletters, books, blogs, investing clubs, brokers, study groups, roundtable discussions, conferences and workshops, etc. The point is to list as many ideas as you can think of.
Project Planning Step 2: Pro’s and Cons
Once you have an exhaustive list of potential project ideas, you can start to pick out the good ones. The best way to do this is to individually evaluate each new idea to see how it compares with what is currently available and what can be developed using your resources. It might be helpful to rank each one based on feasibility. Then you can choose the best ideas, and start with the one at the top. Sometimes the only difference is based on a vote by the team.
To continue our Sprinklebit example: after extensive research, Sprinklebit's CEO, Alexander Wallin, discovered that most people get their investing knowledge through social media, but there are not very many social media websites devoted to investing.
Project Planning Step 3: Make a plan
Once you have identified the general direction that you want to go, you will want to fill in the details about how to get there. This step is probably the most difficult, but it is also the most important. If your focus is a new business, you will need to consider financing, management, marketing, etc. The most important point is that you want to make sure your plan is detailed and realistic. One very good resource you can use to help create a solid business plan is the U.S. Small Business Administration.
This blog is too short to share the specifics of Sprinklebit's business plan, but I can summarize by saying that it is based on the solid proof that there is a need and a desire for Sprinklebit's services, and Sprinklebit has a competitive and profitable way to deliver them. Any business plan should thoroughly cover these points.
Project Planning Step 4: Development and Testing
This is where you begin to execute the plans you made in step 3. From these plans you should have a product or service that you can deliver on a small-scale. If customer demand meets expectations, then you will move on to step 5. If not, then sometimes it means changing the original plan to be closer to reality.
Sprinklebit's small-scale testing was done with a test version of the website. Feedback from the testers was used to improve the design and function of the website.
Project Planning Step 5: Product Launch and Maintenance
This is the end goal for all products. It might seem like you have "arrived" at this point, but there is still more to do. Product launch sometimes includes deciding how to distribute and market the product, and any other details that you may have missed in the previous steps. It also involves continued monitoring of the product’s success.
Sprinklebit's social media website is currently in this last step. The service is available, but that does not mean it's "done." New ideas come in every day, and new updates are added every week. Great innovations are never completely done.
If you choose to use this method, it is important to keep in mind that everyone in your group should be involved with each step, but some people are better at one or two steps.
The ideal team will have at least one "expert" for each part of the process. It also may not be necessary to follow every step for each project.
This method does not seem to work for projects where testing the idea requires building the full-scale product. And creatively based projects, such as books or games, can become overburdened with extensive planning and testing. In fact, from my experience, bloggers typically skip step 4! Many of them skip step 3 as well. And sometimes, they even skip step 2… I don’t recommend skipping step 2.
Andrew holds a Master's in Economics from Kansas State University with a focus on the Technology Sector. He enjoys writing about value investing and thinks learning new investment strategies is more useful than hot stock tips. He considers fundamental analysis to be the key to making great long-term investment decisions. You can follow his SprinkleBit portfolio here.