Its time to put business plans in the bin – forever!
The first step in any new business venture used to be writing a business plan. I must admit I am not a fan of the business plan. There are better, more customer focused, tools out there to plan your idea with. Business plans are great execution documents in a known environment with sufficient certainty. In business though there are not many of them and unfortunately new businesses often take place under high uncertainty. Therefore, systematically testing ideas to learn what works and what doesn’t work seems to be a far better approach than writing a static plan full of predictions. We could argue that business plans actually make risk worse. Their refined and polished approach gives the nature that with great execution little can go wrong. Yet ideas dramatically change from beer mat moment to market readiness and often die along the way.
I would recommend that businesses do not write a business plan unless there is a very specific reason to do so – applying for funding for example. I recommend that businesses need to experiment, learn and adapt to manage this change and progressively reduce risk and uncertainty.
My quick tips for experimentation:
1. Realise that evidence trumps opinion
2. Learn faster and reduce risk by embracing failure – testing ideas comes with failure. Yet failing cheaply and quickly leads to more leaning which reduces risk
3. Test early, refine later – Gather insights with early and low cost experiments before thinking through or describing your ideas in detail
4. Experiments = reality – Remember that experiments are a lens through which you understand reality.
5. Balance learnings and vision – Integrate test outcomes without turning your back on your vision
6. Identify idea killers – begin with testing the most important assumptions
7. Understand customers first – Test customer jobs, pains and gains before testing what you could offer them
8. Make it measurable – good tests lead to measurable learning that gives you actionable insights
9. Accept that not all facts are equal – Interviewees might tell you one thing and do another. Consider the reliability of your evidence
10. Test irreversible decisions twice as much – Make sure that decisions that have an irreversible impact are particularly well informed.