We had highlighted Vinod Khosla's "lessons learned" in our newsroom last year, when he advised entrepreneurs to have "passionate conviction." This time, for his lessons to entrepreneurs, Vinod talks about how he pitched Sun Microsystem to investors about 25 years ago. Vinod started Sun with his cofounders Scott McNealy, Andy Bechtolsheim, and Bil Joy. According to Vinod, a short and simple business plan of about six pages is all you need. His team's business plan was six pages long with "not a lot of verbiage, but a lot of substance." Now that Vinod has his own venture firm, Khosla Ventures, he's worth listening to when it comes to pitching him. If you want to pitch Vinod, make your business plan and outline direct and to the point.
"I hate business plans to go on for 30, 40, 50 pages," he said. In that plan, discuss the people involved, the break-through contribution and other tactical items. But I'm not going to give away everything he said. Watch the video! Vinod always has excellent advice.
Great advice. Especially for recent college grads with four to six years of indoctrination in the mindset of "more paper is better." For business plans, "less" is "more" but it's incredibly hard to do. The exercise of getting your business plan whittled down from 30, 40, 50 pages is a forcing exercise to make you consider what really are the key elements of your business. The means IS the end.
As you take stuff out of the business plan - don't throw it away. Put it into a categorized diligence binder that you can hand over much later in the fund-raising process if requested. All of the supporting material - market studies, research, surveys, I.P. documentation, etc. that you are tempted to put into the business plan should go into different sections in the diligence binder.