Pain management

Walking into the conference room at a Halifax hotel in September, I saw a schematic diagram on a large TV monitor on the far wall showing the various components of a business case: value proposition, market, positioning, execution, and so on. At the centre, there was a black box with a single word in it: pain. 

For the next four days, I was planning to focus on pain—my clients’ pain. That pain is the kernel of THENEXTPHASE, a boot camp for Atlantic Canadian entrepreneurs hoping to raise capital. Based on their Phasemap methodology, THENEXTPHASE helps management teams prepare for growth and a potential investment in three ways: through consulting, workshops, and its website, Phasemap.com. 

The Phasemap methodology gives entrepreneurs a structured approach to define a compelling business case and a plan to execute it. Toon Nagtegaal and Shawn Carver developed the program in 2007, presenting eight of their camps to six young companies at a time. At all of these camps, Carver and Nagtegaal drive the idea into the entrepreneurs that they must focus everything they do on solving their customers’ problems, or as Nagtegaal calls it, “their pain.”

“We spend so much time on pain because it’s the core of everything,” says Nagtegaal, a former venture capitalist from the Netherlands who moved to Nova Scotia in 2003. At the conference I attended, he sat to the right of the schematic diagram and explained it to the dozen or so entrepreneurs attending the camp. “We spend half our time, maybe two-thirds of it, figuring out what the pain is. Once you’ve got that figured out, things start falling into place.” 

My wife, Carol, and I were accepted as participants at THENEXTPHASE camp because our company, Entrevestor, is developing a databank of Atlantic Canadian start-ups and was chosen as a worthy candidate for the program. From 3 p.m. on a Thursday to the same time on the following Sunday, we went through the sessions, ate, drank, and slept entrepreneurship with the owners of five other young companies. 

The program is funded largely by Entrepreneurs’ Forum (EF), which receives $500,000 (some of which will be used for THENEXTPHASE) from the Atlantic Canada Opportunities Agency to help develop entrepreneurs in the region. Participating companies each pay $750 to attend. The process is both simple and revolutionary. We used Phasemap, the interactive flow chart designed by Nagtegaal and Carver that forces business owners to figure out the problems they need to focus on solving. Not only does it identify the pain but it also ensures that the business case of the company constantly addresses it. 

The beauty of Phasemap is how splendidly it reflects the ethos of its designers. Nagtegaal and Carver are an odd couple of entrepreneurial mentorship. At 58, Nagtegaal is a big man with a large presence and a shock of silver hair who delivers jokes and frank opinions in equal measure. His background is in funding companies, having been a co-founder of Atlas Venture and p3 technology partners, as well as managing director of Holland Venture and a VP Investments of GrowthWorks. 

Trained as a software developer, 36-year-old Carver is more cerebral (though no less frank) and a master of Internet research. He has 15 years of experience in IT marketing and technology start-ups across industries that include computer-based training, telecom, e-commerce, online media, and mobility. Carver shimmers with enthusiasm when he talks about a business proposal he finds intriguing. 

After Nagtegaal moved to the region, he worked in venture capital and tried to set up his own VC fund before he met Carver in 2007. PhaseMap is a system that forces entrepreneurs to implement the lessons he learned in his VC career. It was one of Nagtegaal’s proposals that engaged Carver’s considerable intellect, and in 2009 he began to develop software that would represent their shared vision. Ever since, they have been using Phasemap to deliver programs that help Atlantic Canadian entrepreneurs.

“EF steers clients to the workshops because Toon and Shawn’s program provides everything an entrepreneur would need in order to prepare and present a compelling business case,” says Kathleen Rayworth, EF’s executive director. “This kind of program is invaluable to both EF and entrepreneurs. It helps get them ready for when they’re at the stage of seeking an investment or to get them moving in the right direction.”

At the conference that Carol and I attended, we spent hours each day learning how to input the details of our businesses into Phasemap. We were then sent away to spend several more hours thinking through our assignment and filling in all the boxes; later we met with the other participants to present and critique each other’s entries. Eventually, a coherent plan for each business began to take shape, and we all developed a strategy to sell our product by addressing our clients’ pain. 

The remarkable thing about Phasemap is the way it forces you to align everything you do with that pain. For example, when you describe the features of your system, the map sends you back to all of the pain points you address to ensure that all of your features meet at least one pain point. What’s more, it forces entrepreneurs to overcome some harmful tendencies of human nature. Case in point: When you’re filling in the cash-flow statement, don’t just lazily plug in a few numbers. You have to list all the business’s activities, because each one will produce costs and should produce revenue.

Here’s what I learned about the course: Although it’s designed to sharpen your pitch to potential investors, it’s also fantastic for structuring a sales pitch for prospective customers. THENEXTPHASE teaches you to keep customers’ pain front and centre during your pitch and to investigate that pain further whenever you meet potential clients. And there are other ways to benefit. Tapajyoti Das, for example, attended the course last year shortly after forming his company, Halifax-based LeadSift, which mines social media for sales leads for businesses. “Being complete newbies to the entrepreneurship world, the workshop was the best thing,” says Das. “Over the four days, we transitioned from being just an interesting idea to a tangible business with a solid plan. Toon and Shawn personally walked us through every step of a business plan.”

All six companies in the cohort that Carol and I attended were able to demonstrate their customers’ pain and come up with a plan to address it. Sometimes in the past, Carver and Nagtegaal have decided at the end of a camp that a team of entrepreneurs should abandon their business. “Unfortunately, sometimes we had people in here who would have failed because there was no pain for them to solve,” says Carver.

It turns out that we encountered THENEXTPHASE just as it’s entering its own next phase. Carver is stepping back from the partnership but will still be involved in the camps, the part of the enterprise he enjoys the most, while working on another project the rest of the time. Nagtegaal is working on developing Phasemap into a software-as-a-service product. “In order to take it to the market, we thought it had to be Racki-ed up a bit,” says Nagtegaal, smiling. By this he means that he has contracted Kyle Racki, the CEO of Halifax-based HeadSpace Design, to develop a new web product for Phasemap that will improve the visuals and sharpen the functionality.

So as Carol and I went through THENEXTPHASE, Nagtegaal revealed how he himself is using Phasemap to develop his plans for turning his service into a product. He identified the pain as the blatant shortcomings of traditional business plans, which he views as largely static documents that fail to reflect real progression. Business plans can be written in myriad ways, and while on average every entrepreneur spends 400 hours writing one, more than half of all new businesses fail within four years. 

Nagtegaal plans to release Phasemap as an Internet-based product next year. As a means of marketing it, he hopes to enlist financiers—whether they are investors or banks—as evangelists and have them insist that the young companies they work with use Phasemap rather than develop traditional business plans. 

As Nagtegaal was outlining his plans, he was interrupted by Will Harris, a co-founder of Halifax-based BoonDoc, a social network for doctors. Harris was having a hard time envisioning someone using Phasemap without the two founders present to help guide them through it. “I feel like you two are the product,” he said. “You’re spot on,” replied Nagtegaal. “The challenge is to put so much into the product that it stands on its own two legs.”

To that end, Nagtegaal, Racki, and Carver are honing the product so it can travel on its own, yet they still plan to conduct THENEXTPHASE courses. Even Carver will be back in the conference rooms, because he enjoys it so much. And that’s good news for entrepreneurs. “The results of the workshops have been overwhelmingly positive,” says EF’s Kathleen Rayworth. “I would highly recommend this program to any entrepreneur starting out.” 


Peter Moreira
is the principal of Entre-vestor.com,
a website with news and analysis on investment and entrepreneurship in Atlantic Canada. 


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