Business Plans vs. Winging It
I've learned to like Brad Feld's book recommendations. He's got me reading spy novels again. So when he blathered on about Rework, I had to see for myself. At first flip through the pages I was disappointed to see such short chapters; it looked like a general business guide. I set it aside. But then I had to pack something for Spring Break to New York, I gave it another look and I'm glad I did.
Coincidentally, I'm working with one of the UCIrvine teams in the Business Plan Competition, for the 3rd year in a row, if memory serves. My contribution will kick in when we get past the next round and create the PowerPoint pitch, but first they have to write a business plan. Couldn't I just play along and offer some encouragement, some pearls of wisdom? No, because no one reads business plans, especially angels, even less so VCs, I imagine. Who has the time? And the other problem with plans, they're artificial, academic mad dreamings of the future. But these were just my irreverent conclusions, until I read Jason Fried and David Heinemeirer Hansson's early on chapter, Planning is Guessing.
Now I've learned I'm not alone. "Plans are inconsistent with improvisation."
And, of course, improvisation and thinking on your feet while listening to the customer are what determine success in business. "Start referring to your business plans as business guesses." Then "give up on the guesswork. Decide what you're going to do this week, not this year."
When I speak in Austin later this month I'll describe my software company. I created it with no venture capital, no go to market strategy and no business plan; I'd never even taken a business class. I've often shared this for its shock value, but now I'm starting to see my humble approach as a good one.
Keep in mind, "it's OK to wing it".
I can't wait to read my team's plan...
Comments
Thank you Frank. I agree. It's good to let our creative ideas unfold without control.
Though I have written a business plan after being advised to do so, I wrote it with the intention that something just as good or better will evolve from it.
Posted by: Anne Moon | April 4, 2010 2:11 PM
Frank,
I love this post.
There is so much debate about business plans, but even Guy Kawasaki says to stay away from business plans in his book, "The Art of the Start"
I am a firm believer in your philosophy.
Posted by: Andrew Bermudez | April 5, 2010 8:23 PM
I am a firm believer in the need for a business plan. As someone once said to me a business plan is like the initial blueprints for building a house. Before starting the construction you need to have a good base and a good idea of what you aim to achieve. The design of the construction and blueprint may change as you go on but at least youhave that foundation to start with.
The same can be applied to business plans in relation to a business
Posted by: Business Plans | April 6, 2010 7:09 AM
I couldn't agree more that "...improvisation and thinking on your feet while listening to the customer are what determine success in business," especially the "listening to the customer" part. The best stuff we've done since we launched our site last Fall has been in response to our customers' suggestions.
I will say this, though: The exercise of putting together a mini-business plan last summer (for my seed round) was invaluable in the pre-launch planning and development stage, especially as a first-timer. I knew instinctively at the outset what we were trying to achieve, and for whom, and who our potential competitors were, but researching and analyzing each of those elements in order to boil them down into a few pithy paragraphs really helped focus my vision and goals for the company.
If only I didn't have to do it all over again, now that we have customers and traction, in order to go after a proper round of financing...
Posted by: Jason Scoggins | April 13, 2010 8:10 PM