Message to Startups – Ditch the “Business Plan”

If you’re considering a startup business, you might want to invest the time to listen to this video featuring Steve Blank, a serial entrepreneur, author of The Startup Owner’s Manual, and Professor at UC Berkeley and Stanford.

Here are the top-10 lessons we got from the video:

  1. There are no facts inside your building – so get outside your building and talk to customers.
  2. A startup is not a smaller version of a large company. Instead, “A startup is a temporary organization designed to search for a scalable and repeatable business model.”
  3. A business plan is just a set of untested guesses.  You need to turn the guesses into facts as quickly as you can. Instead of a business plan, think of a “business model”:
    • What is the product?
    • Who is the customer?
    • How will you distribute the product?
    • How will you get, keep, and grow customers?
    • What’s your revenue model, and how will you make money?
    • Do you need partners or resources?
    • What are the costs?
  1. You need a voice in your head asking, “What if your vision is wrong?”
  2. Disruption to a large corporation on Day 1 always looks like a “toy” that can’t possibly have any real impact. And then it does.
  3. A startup goes through 3 main steps:
    • Step 1: Search for a business model.
    • Step 2: Build liquidity.
    • Step 3: Execute and grow in scale.
  1. Failure = experience.
  2. Don’t just analyze data: learn to recognize patterns in the data.
  3. The business is not about your technology, but how it fits with customers who will actually pay for it.
  4. Test the problem and test the product: build a Minimum Viable Product, not an entire product. The smallest possible piece of the product that allows you to learn and get revenue without going through the entire development process.