Workshop 2 Speaker Notes- Business Formation

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Business Formation: How Does a Business Grow?




After we develop the Business Seed, the next step is Formation.


If we think of our business as a living organism instead of a machine, then we begin to consider how this living organism must begin to change in order to grow naturally.


The common questions we ask ourselves are:

  • Scaling: How do I scale my business?


  • Hiring: How do I go about hiring the next person? What will that look like? What kind of skills am I looking for?


  • New Product or Service: How do I introduce a new product or service? Is there a need/market for this product/service? Is this the right time?


  • Changing How We Make Things: What is the best way to implement changes to how we make or do things?


  • Teaming with Another: How do I find others to team with? What will that look like? Skill sets? Relationship?, Compatibility? Shared values?, etc.


Living Business Framework

Natural Model of Growth: Growing a business will follow a model of growth found in nature

  • Starts with one cell
  • Then cell divides
  • Then cells begin to take on specialized functions


Living Business Framework: (See diagram)

At the center is the Living Business or the Business Seed


Leadership Systems: These are the qualities of the business that allow us to nurture it and grow it naturally.

  • North: Identifying your business's direction, mission, focus.


  • Priorities: What do you care about? Triple bottom line? Your priorities must be in line with your "North".


  • Community and Culture of your business are reflected in the quality of the relationships you have both within your business and with people/organizations outside of it.


  • Information: What kind of language do you use? How does your business share information and values? Is your organization transparent?



Energy Flows:

Purpose: People want to work on something that is purposeful and they want their work to have purpose

Love: Without love of your work, there is a breakdown of energy

Information: Information is a form of energy

Money: Money is stored energy; spending money releases that energy


Formation circles:

  • Competency: Competency is skill + experience applied - if you can't apply your skill, you don't have sufficient competency.
    • Core Competency: Competency in a certain area gives you the foundation which allows you to take your passion and transform that into a business. Without competency, you may have a passion but you don't have the beginnings of a business. If you recognize that you don't have the required competency, then you need to form relationships with other people/organizations who do.
    • Supporting Network: You will need a supporting network of competent people such as attorneys, accountants, insurance
  • Products or Services: You need a certain set of competencies in order to do this:
    • Create and refine your idea - managing creativity
    • Define your 3D yield: How will your product or service reflect the triple bottom line of a sustainable business?
    • Develop a prototype
    • Community solution
  • Operations: This is the ability to produce or supply product or service.
    • Make products/deliver services
    • Create and refine your process
    • Manage quality of products/service
    • Manage relationships with the supplier community
    • Manage relationships internal to your organization - human development
  • Community Experience: serving and caring. This is the point in the process at which you will realize your 3D yield.
    • 3D yield (profit, planet, people)
    • Whole experience: The experience is part of your business, not necessarily something you sell, such as the people who work for you, the space, sounds, smells, etc. People are willing to pay for a whole experience
    • Customer community relationship


Ecosystem: the environment in which your business exists and operates - people, organizations, institutions and physical spaces that exist around your business.

Broader Community: outer circle - all of the above exists within the broader community.


Example: You want to develop and sell a new product. Ask yourself: Do we have the competency within our group to develop this product? If not, before you try to develop a product, find someone who has that competency and form a relationship with them or have then join the company. Look at the chart and figure out what it is that you do well. Then, when you bring someone else in, figure out what they do well and where in the diagram they would fit into your organization.

Final Five Productions:

  • Matt Dibble: Final Five was born as a video production company; they recorded, edited, and produced video. But Matt realized that he wasn't happy doing that. After some searching, he found that his real passion was telling the story of other people's passions. After that, the key was finding the partners who could actually help Matt to tell those important stories. It took quite a while before he was able to find the right people, those who were on the same journey, shared the same value systems, had the necessary talents and competencies to fill that need in Matt's business.
  • Matt evolved and refined his business seed from video production to story telling. Finding someone who could do the video work was tricky because he was trying to mash up his business priorities and culture with someone else's priorities and culture. If there is a misalignment between your values and the other person's, then you have a problem.
  • If you want to grow your business, you need to figure out if you will you be growing it from within the company or using people/services from the outside? Do you want to grow your number of clients? Does that mean then that you have to grow your Operations bubble - producing / delivering?


Comments from the group:

  • Matt Sitek: A story is what gives a business life. Working in community helps to tell the story, and community can help to define what is needed for an organization.
  • David Broner: If you want people to follow you, you have to tell them where you're going - you have to be transparent about where you're going and what path you're on.
  • A deep immersion in the story is part of the seed development. You need to immerse yourself in a business in order to really understand what it is. Being hands-on is important because that is how you develop a deep understanding and competency for your business. If you don't learn what competency looks like you don't know how to recognize someone who is competent.
  • Matt Sitek: When designing a product or service, the foundation is the relationships you build within your ecosystem. This can define who you work with and how you do your work. Pill Pouch has evolved to be both a product and a service. It's through understanding relationships FIRST that you gain good understanding of nature of your product or service.
  • Value the varied competencies around you and how they can be brought together to produce a variety of products or services - Jeff, Mt. Elliot Maker Space
  • When you get an idea for a new product/service, the first 2 questions you ask are:
    • Q1: Is this consistent with our Seed and our North?
    • Q2: Do we have the competency to even produce or provide this?
  • Bob: Growing a business is a cycle. Be comfortable in the knowledge that this whole process is a cycle that you will repeat many times - It's an evolution, rather like an onion with many layers.
  • Importance of communication (Jeff): Working with others you will be bringing in different ideas and values and different ways of doing things. So communicating clearly is vital. What do you value? What is "good enough" for you? for me?
  • Neal: If a person has a competency in a narrow area, at what point do you bump up against the reality that there aren't a lot of people interested in your product or service? Figure out how you connect with the community (size, price, interest) and at this point you will be able to figure out if there is even a desire for your product. You might find that your end product or service is something different from what you originally imagined - growing Kale vs. selling Kale cookies. Don't rush into a business - let the process unfold.
  • Remember that it's always possible to go back to the seed. Often people move forward with an idea, then move backward because something wasn't working, so they return to the seed. There's nothing wrong with going back to the beginning - it's a sign of maturity - going backward is often really a move forward. Some of best decisions made are when businesses pull back from something. Experience and knowledge is made up of failures. You can't and shouldn't try or expect to achieve things without failing.