Recently a guy approached me wanting help securing funding for his new company. He works full time yet has built up his side business to the point where he wants to quit his day job and focus completely on running his company. Who can blame him?

I visited his web site first. Tons of information there, many pages, elaborate descriptions of products and services and a decent client list. Missing were 1) any sense of differentiation from the firm’s plethora of competitors, and 2) a reason why I should choose this company, or even if they were selling to me.

What jumped out at me was the amount of real thought and energy that went into that site, and the passionate dedication to the work this guy demonstrated. I felt really excited to talk with him about how I could help him before he secured funding.

I didn’t get very far. If I brought up the need to understand deeply the competition and what made his company different, he cut me off with “There’s no one else like us. I mean, there is, but they are much bigger. We have a totally different customer base.” But how could there not be any competition? Who will fund a company that cannot recognize the truth of their competitive environment?

I gently urged him to look at his identity, or brand presence, and briefly described how a firm can use a process of vision setting and strategizing to build a strong brand and wider brand recognition. Again, he insisted it was done, all there, and the marketing plan was all set and ready to go. Great, I said. What process did you use to create it? Without taking a breath he answered, “a Business Plan template.” He insisted on knowing how I could help him get the funding he needed, and added that he was busy gathering a board of advisors (great idea, btw) and didn’t have time or money for strategizing.

Look, I believe the guy needs capital to achieve his dreams. I also believe that companies poised for growth would do well to sacrifice immediate development for careful planning. Such planning will 1) make obtaining funding much easier and 2) ensure that the funds are used wisely and actually take the organization where it will achieve the greatest success. In “The Spoiled Startup,” Geoff Baum writes that “… a startup’s success depends on equal doses of capital, careful planning, good luck, and precise execution.” (Forbes, 8/23/99). It’s the “careful planning” part that receives short shrift as leaders are counseled to react quickly to our ever-changing environment. Well, that might be true for experienced managers who’ve seen it all before, but if you’re a startup CEO you need to stay a bit humble and get strategic. Take some time at the beginning to discover your sustainable competitive advantage and to define your identity. It may slow development for a while, but it will save tons of time and money down the line.