EE Interview: Dave Lavinsky of Growthink, Inc.

dave-lavinsky-of-growthink1I recently interviewed Dave Lavinsky. He’s the Managing Partner of Growthink, a strategy consulting, investment banking and market research firm with offices Los Angeles, San Francisco and New York. Dave has managed more than 150 client engagements across all of Growthink’s practice areas, with a specialty practice and expertise in marketing.

1. What makes a great entrepreneur?
A great entrepreneur has passion, persistence and deep knowledge of their domain.

2. What are the biggest mistakes entrepreneurs make when raising funds?
They go after the wrong type of investors and then they give up when they don’t succeed. If you don’t speak to at least 100 potential investors, you don’t have a chance.

3. What are the biggest mistakes entrepreneurs make when drafting a business plan?
They think that 1) people want to read their business plan and/or 2) they tell the whole, long boring story of their company in their business plan. A business plan is a marketing document. It has to sizzle and excite the investor who reads it.

4. What are the biggest mistakes entrepreneurs make when executing their business plan and other strategic initiatives?
They lose focus and try to tinker with too much. Use the 80/20 rule (see below). Entrepreneurs must focus on the important stuff.

5. How often should a business plan be updated?
The business plan should be updated monthly, quarterly or annually depending upon the stage of the venture. The earlier the stage, the more updating is needed. The plan should be revised substantially, as needed, each year.

6. What must an entrepreneur do to survive the tough times?
Persistence is key. Set up systems that allow the business to run smoothly.

7. What role do you see entrepreneurs playing in the county’s eventual economic rebound?
Entrepreneurs are the KEY to economic recovery. They are the ones who create new jobs.

8. How do you define an effective corporate/business strategy and how should entrepreneurs develop them?
An effective business strategy is one that is proven to work. To find one, look at the millions of other businesses that are currently running or have run in the past and take the elements that worked.

9. What is the biggest difference between a business plan and a marketing plan?
A business plan tells the whole story….the business model, the financial model, the history, the management team, the operations plan, etc.

The marketing plan is focused specifically on the plan to attract and serve customers.

10. What do VCs want to see in a business plan that entrepreneurs overlook?
VCs want to see that the business can scale very quickly and has unique barriers to entry (primarily via proprietary IP).

11. What other advice or recommendations do you have for entrepreneurs?
Continual education is key. I just got back from a 4-day marketing seminar which cost me thousands of dollars. There is SO much that we don’t know. Marketing experts go to conferences to learn more. And since entrepreneurs have to be experts in multiple disciplines, they need to continually invest in their education.

12. What advice do you give struggling entrepreneurs most frequently when you are hired as a turnaround consultant?
Use the 80/20 rule. Figure out what 20% of their effort is resulting in 80% of the results. Focus on that and forget the rest.

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