Two weeks ago I gave a talk at the HUB:BLE-2 , a conference organised by the University of Leicester. In a feat of true madness I decided to shock the audience. I declared that ‘the only good business plan is a burned business plan’.
You can imagine the reaction of the attendants. I could hear the chairs shifting and a few coughs every here and there. I could see puzzled and/ or angry glances. I could also feel the room dividing in two: half of it sighing with relief and the other half ready to jump at my throat.
What kind of hideous crime have I committed? I obviously turned against the common knowledge and accepted business practice; a practice that was established over the past few decades. After all, how to construct a business plan is the basis of any MBA, the elite of the business degrees.
What possessed me to commit the crime against the accepted norm, the foundation of all business knowledge? I am afraid the only excuse I have is that I am a convert of lean methodology. In the absolutely first stages of a business,I prefer using the simple and ‘agile’ lean canvas that Ash Maurya created. It is easy and to the point.
At later stages and when I have a better idea of the business model I prefer using Osterwalder’s Business Model. Only when there is a product/ market fit do I allow my clients/ students to complete a ‘proper’ business plan. By then, of course, they have customers, ample data, and they need to create a strategy for their newly-found company.
You are probably wondering why I am so set against the business plan? The reason is as simple as the canvas. It is a product of science fiction and should be treated as such. In the stages before launching a new product, we do not have enough evidence on the company, the market, or the reaction of the customers to the new idea. Some business plans look so well researched, so carefully put together that they resemble the foundations of a skyscraper, instead of the foundations of a shed. All the details, all the planning is set in advance. How many of these details are true? Isn’t everything we put into a business plan an assumption? And how do these assumptions prove themselves at first contact with the customers?
In fact, they do not. So, what is the point of losing all this time and money, both of which are your most precious resources? Instead of writing works of fiction, it would be advisable to go out there and find a few customers. The experience will cut through the basic fear of failure, while it will give you precious data.
You will have to excuse my impertinence. After working as an academic for the good part of two decades, I became addicted to facts. If you cannot prove its existence, then it is not there! If the numbers on your business plan come out of thin air, then they do not deserve their place on any piece of paper. They just exist to disorient you and cause troubles.
So, keep your fiction by the bed and your lean canvas on the office desk.
Image source: http://commons.wikimedia.org/wiki/File:Hamburger_Brand_Zollenbruecke.jpg