Real Entrepreneurs Don't Write Business Plans

Screw your business plan and declare war instead...

gk on February 2, 2012 in Entrepreneurship About a 4 minute read.

For some reason, many entrepreneurs love busywork. Do you remember when you'd have a substitute teacher back in elementary school and she'd start giving everyone all these idiotic handouts and worksheets (I'm so old that my day pre-dated the xerox and these were called 'dittos' -- I can still smell the intoxicating smell of fresh dittos...)? Anyway, the entrepreneurial version of this time-killer is the modern business plan.

Most business planning exercises are just a self-indulgent form of mental masturbation. This problem often reaches the point of high-comedy when it's undertaken by large, bureaucratic organizations (and sometimes they can afford to waste months on idiotic PowerPoints and bickering over imaginary projections). But, when real-world independent entrepreneurs indulge this folly, it can be tragic.

Look, you don't know the future, and you won't be predicting it accurately no matter how long and hard you polish your spreadsheet numbers. It's much better to just go out and build/do/sell something and move on from there.

Still, there is value in thinking, and sometimesit can even be worthwhile to capture the outline of that thinking in a meaningful, communicable way. Specifically, if your venture is going to involve more than 3-4 people, you would be well-advised to put something on paper to keep everyone on the same page and marching in the same direction with some degree of coordination.

But, if it isn't a business plan we're after, then what is it? There are literally hundreds if not thousands of how-to business guides out there. I remember at various points DivX became utterly infatuated with the Jim Collins 'Hedgehog Concept', and two-page plans, and SWOT analysis, etc., etc. Some work better than others, but, there is a glaringly obvious example of how to do it right and it comes straight off one of those elementary-school civics worksheets:

If you need to coordinate the efforts of 5+ people toward some business or goal, follow the lead of the Founding Fathers of the US. All you need is:

1. A Manifesto/Mission/Declaration of War and...

2. A Constitution/Flexible Operating Plan

The greatest business plan ever written...
Would you invest in these guys?

The Manifesto of the US is the Declaration of Independence -- more specifically, the first two paragraphs (the rest is just a whiny laundry list of complaints). The entire document is only one handwritten page. The US manifesto is just like an entrprepreneur's call-to-arms. It essentially says "We are about to do something bold, insane, and world-changing. We may loose everything we have in the process. And here's why it's worth the risk." It's worth re-reading now and then to see how it's done. Do it now. Go read just the first two chapters, then come back. Wow, awesome isn't it? Do you feel invigorated? Feel like kicking some ass today? That's the point of the manifesto. Create something like this for your business, and you'll be well on your way to creating a culture and brand for your company as well as informing customers, partners, and employees exactly what you're doing and why. Such a simple yet powerful concept executed to perfection over 200 years ago, yet almost no business plan or even business planning templateincludesthis vital piece.

One more observation on the declaration. The declaration of war aspect can be particularly helpful to start-ups -- don't be afraid to be passionate/antagonistic. It can even be effective to retread some of the original Declaration's language. For instance, here's an imaginary one for the early Google:

We hold these truths to be self evident...

that information is meant to be free and accessible by everyone,

everywhere. To this end, we hereby declare war on Yahoo! for

doing a terrible job at organizing the content of the World Wide

Web.....

The Constitution is simply an operating plan. It does not try to predict the future, it does not contain a risks section, SWOT analysis, or mitigations section. It does spell out who is responsible for what and generally how things get done. Importantly, it understands its own limitations as far as predicting the future goes and includes means for its own modification.

Obviously, a government is not a business and there may be specific needs that your business has to address/communicate that do not fall neatly within the constitutional framework, but even in those cases you should take a few lessons from the Founding Fathers:

1. Be Concise-- When your planning document starts to exceed 5 pages, throw it away or split it up. The brutal fact is that no-one in your organization will read it. Or, if they do they will not understand/remember/internalize it. The entire Constitution of the US is merely four handwritten pages long; The Declaration of Independence is only one.

2. Be Passionate-- Jefferson put it all out there in some of the most powerful language the political world has ever seen. It's shocking how sterile and dry business plans tend to be. Come on, you are writing about what you will be (or hope to be) doing with 70% of your life for the next who-knows-how-many-years! If you're not into it, how can you expect anyone else to be?

Don't spend your time planning for a future that will likely never come. Spend your time making the future happen. If you need to marshal the troops, don't waste their time with pointless passionless worksheet-business plans filled with jargon, charts, and delusional spreadsheet projections. Do what has worked spectacularly for the US for the last 200+ years -- declare war, then articulate a straightforward operating plan for execution.

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