Tired of the Traditional Business Plan?
If you are like me, and thought that putting together a traditional business plan was an exercise in futility, then the Lean Start-Up Methodology is for you. The traditional plan falls short and those too reliant on it, will suffer a fatal setback.
It’s also impossible to know, what you don’t yet know. Meaning, spending a lot of time working on forecasts for profit, income flow, and cash flow without tangible data to back it, is, as I have been telling managers for years, a waste of time.
“As new research by Harvard Business School’s Shikhar Ghosh shows, 75% of all start-ups fail.”*
A lean start-up, uses more experimentation (trial and error), and adapt to the change, opposed to a rigid elaborate plan. The lean method has three key elements:*
- Accepting on day one, many of the hypothesis are untested (which is the goal of the lean start-up, it’s more fluid and adaptable to real world scenarios).
- Get out of the building approach and let your customers test the hypothesis . Quit guessing at what you think they’ll do and start paying attention to what they actually do.
- Listen to your customers and make changes accordingly.
3. Agile development (borrowed from the software industry), works with customer development and eliminates wasted time. Again, adapting to the customer’s needs and not building out a ton of product but making changes as necessary.
Part 2 later this week, or read the full article on:
Why the Lean Start-Up Changes Everything, by Steve Blank, Harvard Business Review, May 2013,