Founders go wrong when they start to believe their business plan will materialize as written. I advise entrepreneurs to burn their business plan — it’s simply too dangerous to the health of your business. Believing in them is illusional, because, to quote Steve Blank (fellow WSJ Accelerator ): “No business plan survives first contact with customers.”
As any seasoned entrepreneur and investor will tell you, however hard you think about your venture, the reality of the market will always be different. In fact, countless winners of business plan competitions learned that truth the hard way when their prized plans succumbed to market forces.
Hence, we need to have a more dynamic methodology for entrepreneurship than static business plans. A learning approach that stress tests your business ideas with real market forces and iterates through plan A, plan B, plan C, and so on — quickly and cheaply – until you’ve nailed it.
Entrepreneurs around the globe are already practicing this method mix with great success from Silicon Valley to Switzerland, Colombia to Kenya, Singapore to Shanghai. These entrepreneurs avoid three common pitfalls:
1. Falling in love with your first idea, without exploring alternatives
2. Not listening to customers hard enough
3. Not testing hard enough
Do it the right way!
Many founders come to me for advice. They show me their Business Model Canvas and ask me what I think. My response is always the same: “Have you tested it?”Burn Your Business Plan – Before It Burns You, Alexander Osterwalder