On the Silly-ness of Business Plans

Dude I’m starting this company I’m really excited about, but the first thing I gotta do is put together my business plan and I have no idea how to do that. Can you help me out?

Actual Answer: Yeah definitely I’d be glad to help, when works for you?

Answer I want to give: You’re an idiot and probably shouldn’t be starting this business if you can’t put together the biz plan on your own. But if you really want to give it a shot, I will help you out by telling you to do something way more valuable than spending hours on end trying to perfect an absurdly long document that will most likely become obsolete the moment you give it to an investor anyways.

Let me elaborate on my long answer a bit…

  • Business plans don’t cut it for startups that are trying to build a product in an unknown market, for an unknown customer, solving an unknown problem, with unknown solutions.
  • Business plans are ancient documents that are meant for companies who have tons of time on their hands to plan financials using data and estimates that hold little weight in a constantly shifting startup environment.
  • Naturally, ¬†standardized business plan templates cannot take into account the most important factors in deciding whether or not your new startup will fail or succeed, as those are simply unknown before you’ve identified product/market fit (which takes a lot of time and effort).
  • When you tell an Angel Investor or Venture Capitalist that you’re spending time on writing your business plan or that you’d like for them to take a look at your business plan, their first reaction is going to be that this person has no clue what they’re doing and they will 100% of the time not invest, guaranteed.

Why is this the case you might ask?

Well, in simplest terms, there’s more important crap to focus on at the infancy of your startup idea. You could (and should) be spending time on Customer Development. I’m sure I will talk a lot more about Customer Dev in the future, but for now here’s a solid resource from Steve Blank who is an authority on the ¬†“Customer Development Manifesto”.

I do understand the desire to organize your thoughts, however. So if you are someone who needs to get things down on paper and you feel like you need to put together a document that will help you plan your next steps, there are much better solutions available as opposed to the standard business plan…

Two products that I have found nail this are (1) Lean Canvas and (2) Lean Startup Validation Board.

These are extremely well-designed tools created by seasoned entrepreneurs who have been all over the startup map and back. They took the time to build these products so that future dreamers who decide to ride the wild rollercoaster of entrepreneurship could avoid costly mistakes.

What’s the single most important difference between these products and the business plan that has become the norm?

These documents help you define a holistic yet concise approach to your startup’s business model by emphasizing the riskiest assumptions which are most crucial to validate. Nothing more, nothing less.

Say thanks by using their free products instead of the business plan template that you spent $19 on!