You have identified a market opportunity, made a hypothesis about how it could be addressed profitably, and tested that hypothesis with your product. This is the crux of your initial business thesis.
Fleshing out your thesis in a concise, formal(ish) document can help foreshadow potential challenges and ensure you are constantly testing your most important assumptions. It also keeps all initial stakeholders aligned through the hazy early days. Here are some practical tips for writing your thesis:
*Most don’t consider moat until much later. We believe it’s highly valuable to consider this even in the early days. See Emery’s post on this here.
Your mission & vision statements answer the questions: “Why do we exist?” and “Where are we going?”.
Organizations need a north star to provide clarity and alignment, especially in the fog of war. As Patrick Lencioni writes, “employees at every level need to know that at the heart of what they do lies something grand and aspirational.” Effective mission & vision statements inform and inspire the critical stakeholders that surround your business, including customers, employees, investors, and candidates. Your statements should help them understand the value of your company and product, as well as where you are headed. It captures, in a few sentences, what gets you out of bed in the morning.
For your mission statement, keep asking “why?” or “in service of what?” until you reach something grand and aspirational – usually ending just short of “to make the world a better place”. Try using the five whys technique to get to the root. Your mission statement should feel human. It should be emotive and should be an authentic source of inspiration. Your mission statement should be created with intention. It’s okay to write it while your values and strategy are still emergent. Your mission statement is not your competitive differentiation or marketing plan (though it should align with your marketing after the fact). Your vision statement should communicate where you are going. It’s about the future state you intend to achieve.
When Vocap Managing Director Vinny Olmstead was CEO of Bridgevine, a B2B and B2C marketplace for home services, he led the creation of a compelling mission and vision that ultimately lasted for 14 years until the company sold. A few best practices from Vinny based on this experience:
Your core values are the bumper rails for your culture. While the mission statement explains why your organization exists, your core values explain how your company gets there. They guide significant processes like hiring decisions and employee evaluations as well as everyday interactions like who cleans up the kitchen space. While your mission statement does not need to be unique, your values should reflect your distinct personality.
At this stage you’ve defined your purpose and your organization is transitioning into adolescence: it has an identity of its own, but it’s still quite malleable. This is a great time to formalize the core values that have likely emerged unconsciously.
We like how Twilio approached this process, which is described here. Convene a diverse group of 8-12 people to crowdsource ideas, distill to the ~10 most critical values, then test with the organization to determine which ones they can't live without. They are called ‘core’ because they transcend all other values. We suggest narrowing to a maximum of 5 core values. Make sure they are concrete and avoid generics (e.g., integrity). Remember: you are trying to get your tribe personally invested in these values. This is the opposite of a top-down decree.
"The goal is to identify who you are through introspection and then pull out and articulate the things that you like. Be aspirational but know that the seeds of these values must already have been sown." - FirstRound Review.
A couple good hacks for uncovering your values:
Making the values stick:
Field technician enablement and Vocap portfolio company, XOi Technologies has one value it holds above all others: “we put ourselves in technicians’ work boots”. As a demonstration of its importance and seriousness, every single employee is required to regularly test the application over a weekend. During their “weekend rotation”, a staff member uses the full app feature set in various settings – outside, inside, in the basement, on the go – just as a technician would in the field. They then report back on what did and did not work well and how it could improve. Recently, the company started giving all new hires a fresh set of work boots. Bonus points are awarded to those who wear them during their weekend rotation. This ritual i) keeps everyone grounded in the user’s perspective and ii) provokes curiosity from outsiders and newcomers, inviting an explanation of the ‘why’ behind the program.
If you want individuals and teams to row with strength and coordination, ensure they know their boat’s next destination. This next destination is not the fuzzy promised land over the horizon, it’s the port directly within sight. The point of company-wide objectives is to provide context for how everyone fits and contributes, and to drive greater cross-functional communication and support.
There are several effective methods for setting and driving accountability around company objectives. We are fans of both the Entrepreneurial Operating System (EOS) and the Objectives and Key Results (OKR) methodology. In each case you can start with your senior team, but eventually the process should cascade down the organization at all levels (company, departments, teams and individuals).
The OKR Methodology
Best practices for setting objectives:
A couple good examples of company-wide OKRs:
For more on OKRs, we suggest the original text: Measure What Matters.
The EOS Model
In a nutshell, EOS is a management system that helps align and synchronize all the pieces of your business to produce the concrete results you want. The system is designed around 6 key components (Vision, People, Data, Issues, Process and Traction) to unite leadership around where the company is going and specifically how it will get there, including who plays what role, repeatable processes and data backed accountability.
If implemented effectively, EOS will produce a healthier and more productive leadership team, surface and crush issues quicker and ultimately, accelerate results for the business.
EOS Implementers follow a Proven Process to guide a leadership team along the journey, strengthening the 6 Key Components. Along the journey, the leadership team learns to master simple tools designed to help build trust and clarify the issues blocking their Vision (including issues within the leadership team) and then knock those issues down one quarter at time.
DIY vs. using a coach:
The most reliable approach to implementing EOS or the OKR system is to hire an outside coach. But for those tight on cash (e.g. seed stage companies), there is the DIY alternative which is still worthwhile.
While not as well known as OKRs and EOS, especially among technology startups, Rockefeller Habits is another fairly established system. Kickstarted by Verne Harnish’s 1999 book, Mastering the Rockefeller Habits and since codified into a planning and implementation methodology called Scaling Up, Rockefeller Habits outlines three fundamental habits key to successful business management: priorities, data and rhythm. Since the publication of Harnish’s book, many leadership teams have adopted the One Page Strategic Plan (OPSP) and corresponding planning frameworks as their foundation for generating accretive growth.
A note on BHAGs:
Though terminology differs, most systems involve visualizing a future state and working backward from there. Instituting a “big hairy audacious goal” (BHAG) is maybe the simplest distillation of this concept. We at Vocap are fans of using BHAGs. When used effectively, a BHAG will cut through the clutter, rally the team and keep everyone’s eyes on the prize. A good BHAG should be simple and easy to understand, such as “the march toward X” with X being some ambitious, measurable achievement. YouTube’s “billion-hour mission” is a great example:
OKRs, EOS and Rockefeller Habits are just a few of the more proven methodologies. Regardless of the specific system you choose, you will do well to incorporate the basic principles outlined above.
Your mission, vision, and values are the lifeblood of your company. Alignment around your MVV breaks down quickly if you’re not highly intentional about it with new hires.
Here are some concrete steps to integrate your MVV with your onboarding process: