Not Your Father’s Business Plan…
I teach business at a local university. We have some wonderful business programs, including the MBA program, for which I am the recently-appointed Program Director. Like all good business schools, we ask our MBA students to work on a business plan as their final project. It literally takes them months to complete. They research mountains of data, create miles of spreadsheets and in the end, present a 30-50+ page document, complete with an appendix and works cited page that would make your APA instructor blush with excitement. These tomes are reviewed by well-qualified experts, and vetted for accuracy, depth, computation and viability. Once a number of edits and revisions have been made, and just prior to actually graduating, they fall across the finish line with an approved plan. Mission accomplished! Or is it…?
Our school is by no means the outlier, in fact, these plans were only recently implemented in an effort to rid ourselves of the tired and irrelevant “thesis.” And so in one sense they represent a great leap forward, an attempt to address the growing criticism that business education is impractical at best, irrelevant at worst. And so we have them create a business plan. Unfortunately, the end result of creating such a plan is, by and large, just that…the creation of a plan. And once graded and approved it goes the way of all other graded and approved work…into a file somewhere in the student’s home, only to be discovered decades from now, like a time capsule uncovered in the middle of moving residences. Trust me I know. I have boxes of these “artifacts” that line my garage now, boxes of law school research that now serves as easily accessible building material for enterprising mice. At least someone’s using the stuff!
The truth appears, though it is admittedly somewhat anecdotal, that while students certainly learn something from the process, it is likely no more useful than any other theoretical class. “How can this be?” you question. Because no one does it that way anymore. It’s like we’re teaching people to do longhand division or worse, how to use an abacus. Do people actually learn anything when they do this? Yes. Will they ever do it in the real world? Not likely. Why?
I’m glad you asked. For starters, a significant amount of research for the traditional business plan is trying to “estimate” the potential for success. How will the market respond to your product/service? What is the market looking for? What are their likes and dislikes? We build focus groups and surveys to try and figure out just what people are looking for. If only we had access to large numbers of people who had already joined interest groups and publicly displayed their opinions and interests…that would really be something. We could call it: “YouFace” (thanks Jack Donaghy). But surely we need to draft long and sophisticated plans for financing so we can get in front of the chairman of the bank and wow him with our PowerPoint slides. Its not like there are crowds and crowds of people out there just waiting to fund our ventures based on emotional narrative and cool pictures, right?
The reality is, all of this stuff exists. We don’t have to guess at what people want, we can just ask our networks on Facebook, LinkedIn, Twitter. No one needs to go to the bank for startup funds, they go to Kickstarter, or Indiegogo or a myriad of other crowd funding sources. We don’t need to create focus groups, we need to start shipping our products. It’s not about guessing what people will like based on artificial settings, it’s about iteration. Create, ship, collect feedback, retool, repeat. It’s time for business schools to help student’s (entrepreneurs), develop lean approaches to business startups. When Harvard Business School, Sequoia Capital, and new tech accelerators like First Growth Venture Network are telling you that a few pages with some ideas is enough to get started, isn’t it time we start listening. Let’s focus more on shipping and less on “planning” and help students actually start something. Let’s all agree to “Do It!”