Burn That Business Plan, Baby
So what’s the newest start-up trend? Doing it on the fly. That’s the conclusion reached by Anthony Tjan as part of the research he’s preparing for a book on successful small businesses, recently reported by Forbes. According to Tjan:
One of our most striking findings was that of the entrepreneurs we surveyed who had a successful exit (that is, an IPO or sale to another firm), about 70% did NOT start with a business plan.
Instead, their business journeys originated in a different place, a place we call the Heart. They were conceived not with a document but with a feeling and doing for an authentic vision. Clarity of purpose and passion ruled the day with less time spent writing about an idea and more time spent just doing it.
Tjan’s findings are consistent my own observation that desire to practice law is a more important motivator and predictor of success than entrepreneurial tendencies. It’s not that planning doesn’t have its place, but when you spend too much time on planning, it often turns out to be wrong or can lead you in the wrong direction. That’s the same point in Erik Ries’ Lean Start Up, which counsels new companies to focus on a minimal viable product, launching it and adapting along the way.
For lawyers, this lesson is most important. Your minimal viable product as a lawyer is really,your start up costs and at least a few clients, or the possibility of finding them. The rest of getting started involves a lot of trial and error; identifying new opportunities, and eliminating others; moving quickly to fail as quickly as you can so that you can focus on where you can succeed.
To move through the iterative process effectively, you need goals or milestones rather than a static business plan. You should be setting deadlines for launching a product if you’re a start-up or a website if you’re running a firm. You need to put spending limits and a time frame on new initiatives – so for example, if you decide to add a specialty of adoption to a family law practice, you should figure out how much to invest in acquiring needed skills, marketing the new practice area and determining whether to stick with it.
In short, there’s no such thing as a perfect or even adequate business plan in starting a firm. Just a lot of trial and error and learning as you go.
Mmmmm. What about this part of the post:
“In order to create a clear and compelling vision, you need to be able to then answer these questions, “If we were more deeply fulfilling our mission, what would our business look and feel like? What would it be like to be a part of our team? What will we be providing to our key stakeholders?”
And once you have all three – a meaningful purpose, a clear vision and a solid business plan…the odds are definitely in your favor.”
I’m not sure they are saying ‘burn that business plan’…they are saying that give the business plan it’s proper place and that a business plan doesn’t take the place of passion and vision.
If new lawyers can recognize the discreet difference and not hold a business plan up as the only starting place for creating a growing and growing a practice, they’ll get further along. You need all three, business plan third.
Yes that’s the Forbes post and it represents one approach. But I think that the Tjan research and Erik Ries suggest otherwise
The problem with so many dot coms that went bust in the 1990s isn’t that they didn’t have biz plans (many did not). Rather the founders just wanted to make money and cash out. No vision
Sent from my iPad
In the late ’90s, during the first dot.com boom, we would-be Internet entrepreneurs in the DC area were fortunate to have the guidance of Mario Morino, founder of what became Legent Software (and which Mario sold for a reported $450m). Mario was speaking about acquiring funding, and suggested that one’s business plan should begin by developing credible answers to 10 critical questions that would determine the venture’s chances of success (and of obtaining funding). Here they are:
Key Questions For Knowing My Business
What is the market opportunity in the market niche?
What is my solution to the market need?
How big or small is the market opportunity? How is it moving?
What is my economic model? How and when am I going to make a profit?
How am I going to reach my market and sell to my buyer?
What’s the competition? How will it change? Why am I better?
What’s my differentiation and how will I maintain it?
How will I execute? How will I grow and manage my business?
What are the risks? In other words, what might stop me?
Why am I going to succeed? Why me?