The right approach to starting is …
Reading just the first chapter of The Art of The Start by Guy Kawasaki has got me rethinking some of what I have learned about entrepreneurship over the course of the MBA program at DePaul. In particular, I find myself asking the question - What is the right approach to entrepreneurship, especially as it relates to starting a new venture?
With a little bit more than 4 months of course work left, I am really close to getting a MBA degree concentrating in entrepreneurship. However, it appears that the entrepreneurship curriculum is centered around the notion that every successful start-up begins with a formal, well thought out, and defined business plan. In fact, there is a specific course - MGT 570 (Entrepreneurship and new venture management) that is dedicated this. The main deliverable and grading criterion of this course revolves around creating and presenting an actual business plan. On the other hand, The Art of The Start points out that there is a different way of thinking about starting new ventures. Kawasaki states that when starting a new venture, time not should be wasted creating lengthy 30 to 60 page business plans that include pages of optimistic analysis and rhetoric. Instead such time should be used proving out the idea and building up a prototype of the product or service. So which of these two philosophies makes more sense - especially in the technology industry? A hybrid approach of these two philosophies!
I agree that it is probably not the best use of time to write out a full business plan. However I do understand the importance putting some thought into an idea before jumping into it. I think part of what makes the business planning process valuable is its market and industry research sections. These sections begin to paint a clear picture of your customers, competitors, and industry behaviors based on your assumptions. Those are the only two sections that are worth spending time on from a business planning perspective. The rest of the time I would spend implementing the product and/or service while still formulating a business model. Such a hybrid approach is appealing since it offers the “most bang for the buck.” As opposed to large successful organizations, time and money are a luxury to a start-up. It more important to spend these resources getting the product ready and communicated to the target user in its “good” state rather than spending the extra resources to make it perfect.
I think it would be interesting to see whether the big technology start-ups over the past decade had full blown business plan at their onset or if they followed the path that is described in The Art of The Start. If I were to guess, I would say that the latter is more likely to have been what happened. I find it hard to believe that Facebook, Digg, and Twitter had fully developed business plans before launching. I would imagine that they had a concept for their product/service, and a loosely defined business model. Business plans probably got created after their services caught some friction in the market and venture capitalists got involved. This of course is all pure speculation - but as Kawasaki would say - ”It’s not about how you start, it’s about how you end up.”
