All,
My very strong suggestion to everyone is that you need to attend one or more
of the major U.S. or Canadian Business Plan Competitions. Why do I say this?
Because most of the observations that you have made do not correspond in any
way to what is actually done at the leading schools that participate in these
competitions. In particular, the requirements of these competitions is for a
18 page business plan - a Cover page, plus 10 pages of Text in 12 point type
and typed space and a half, plus 7 pages of supporting Exhibits.
More importantly, the vast majority of these short plans are for projects that
each of the participating teams are actually planning to start for real. In fact,
for the past several years, most of the participating teams have actually started
the ventures that they have proposed. However, in most cases, the teams do not
start by developing such plans. Rather they do "Feasibility Analyses" of their
project ideas, and only prepare short plans after the initial Feasibility Analysis
has been completed and has demonstrated the actual real world feasibility of the
proposed venture.
Finally, I seldom use Entrepreneurs as guest speakers. Instead, I use them as
judges for reviews of the students' Feasibility Analyses and later Business Plans.
I do use speakers, though. Who? Angels and Venture Capitalists; New Venture
Patent Attorneys, Attorneys who specialize in Legal Organization for New Ventures,
Experts in Market Research for New Ventures, Experts on SBIR & STTR Grants, and
other similar specialists for the key tasks associated with the real world launch
of new ventures - such as Small Business Loans, Bankruptcy & Liquidation, etc.
Sincerely,
Dr. Chuck Hofer
770-757-3575 Cell 1
770-455-4280 Cell 2
----- Original Message -----
From: "Rajiv Agarwal" <
rajivgagarwal@GMAIL.COM>
To:
ENTREP@AOMLISTS.PACE.EDU
Sent: Thursday, July 23, 2015 11:10:48 AM
Subject: Re: [ENTREP] Lean Canvas vs. Traditional Business Plan Model - sharing experiences
Dear Dr Curtis and all,
I read your post with great interest and would like to share my experiences, with the intent to discuss a few observations that I had. I faced this dilemma when asked to step in to teach entrepreneurship to a reputed MBA program in the last semester. I had been following the lean canvas (Effectuation, MVP, Business model and so on) and was faced with this situation where the Business plan(BP) model had to be followed.
Many discussions later, it emerged that the students were placed in Private Equity /Startups and hence the BP model was expected, as they maybe called on to make a pitch, and the students should not be found wanting. On the other hand was the possibility that what were the tools that could be used, to assist potential entrepreneurs to hit the road running? A BP does help structure thoughts into one document, but i have found, that most students tend to assume that a good BP is a sure sign of success, and may go into 70 pages of excel calculations with still no idea of what to do next or for lack of funding. (something which Saras Saraswathy has explained most brilliantly)
In my limited experience, i had a chance to examine BPs made at the MBA level and by entrepreneurs children (I teach in a Family Business Program and also at the MBA level) i see that the MBA students are more process driven and work to get the "perfect" detailed BP, with the possibilities for pivoting, and extensive workings for each option, as if they were writing an elaborate case, and then had to make a decision. The business family students tended to more often than not, base judgements on gut feelings or past successes and did not pay as much attention to the structure or processes. They also observed that theory is "research generalised from practice" put as a tThe truth lies, i guess, somewhere in between. This is based on the experience with some of 250+ BPs that our students make every year.
Similarly, in cases where we had called entrepreneurs to class, I did find a lot of war stories, but discovered (by a few trials and lots of errors!) that the value to the students was enhanced, when i used the talk as a case study in a future class, and related incidents to opportunity identification and exploitation, maximising strengths, etc. But the value was there, hearing from the entrepreneurs themselves, seemed to convince more, than the fact that I had just said the same thing in an earlier class! :(
I also found that i had been asked in many a class where the students had read up on the successful entrepreneurs educational qualifications (or apparent lack thereof) and had questioned the basis for them to attend my class or rather hit the markets in search of customers. In an obvious attempt to retain the students from evacuating my class, what worked for me was pointing out the fact that though the markets /customers are the final judges for entrepreneurial success (Drucker, Steve Blank et al) it also helped that the research into previous failures, analysis by different frameworks, helped make the unstructured process a lot easier. A BP may not necessarily be the way you may finally do your venture, but it does help you to force your thought process into various areas which you may have missed. the Lean canvas also does this, but not from a financials viewpoint. And most of my students don't want to even consider simple break evens, or payback periods. I think that the big numbers and huge valuations kind of blindside them to the basics of whether a business is profitable or not.
The other issue is that of working in teams which is a challenge (Dr Krueger: you took one for the team!), I guess that having worked in a entrepreneurial environment or even a competitive MBA classroom environment, this becomes an issue for the students. Especially when the actual team may not be possibly Type A personalities, that one may have in the classroom formed teams in a MBA class, but someone whom you are forced to hire at minimum wage because you are bootstrapping your entire show.
Having a hybrid of both these approaches would help. I certainly would put my neck out and state that entrepreneurship needs a mix of both, theory and practical knowledge.
A theoretical subject, finance, economics, (if i may volunteer an example, with the greatest humility), where having adequate knowledge of the subject and research, is an adequate and sufficient condition for success. But this is like learning how to fly or swim. I would never venture into a plane where the pilot has just read every book on flying an aeroplane.
And i find that this a gap in the classrooms, where just having only either, does not serve the purpose and hence the gap.
The final course i took was a blend of both these approaches, which was a very different experience, but i guess, that the students liked the dual purpose of the course and appreciated the intent. Sadly, it was a classroom based course, and i did not make this into a "get outside the class" exercise, much that i now realise i should have.
The questions that arose when designing the hybrid course in my mind were: 1. Are there two stages of entrepreneurship? one is the basic lean canvas, effectuation, customer identification, basically "how do i start my venture today?" and the second is the have a BP type structured approach to consider all the options, for more structured, startups? 2. Are these adequate to enable a person to start a business the next day? or do we state that you must make a BP ? (as mentioned earlier, this has been explored by Dr Saraswathy) Would the students be found lacking if they were employed in a firm which needs them to be familiar with BPs? 3. Is the hybrid course an option?
Any thoughts on these will be highly appreciated. Apologies for the long post..I know that this could get controversial but in the spirit of academic inquiry, seeking to find out what the answers are without causing any offence to anyone...
-------------------
Rajiv Agarwal.
Associate Professor of Family Business and Entrepreneurship
Program Head, Owner Manager's Program & Women's Management Program
Centre for Family Managed Business,
S. P. Jain Institute of Management & Research,
Bhavan's College Campus, Munshi Nagar,
Dadabhai Road, Andheri (W), Mumbai 400058
T + 91 22 6146 0302 F + 91 22 2623 7042 M + 91 976 925 7220
Email:
rajiv.agarwal@spjimr.org /
rajivgagarwal@gmail.com
Linkedin: in.linkedin.com/in/rajivgagarwal
SPJIMR Profile page:
http://www.spjimr.org/faculty_and_research/core_faculty_profile_details.asp?srno=85
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This message is from ENTREP which is sponsored by the Entrepreneurship Division of the Academy of Management.
Please do not post messages with attached files. Commercial messages or spammed messages are not allowed on the list. The use of auto-responder "out-of-office" messages may also lead to your removal from the list.
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If you have questions or need help, please contact Dr. John Bunch
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Ventures HO!