As far as business models are concerned, there was an interesting conference held in China late last year where distinguished well-known strategy scholars from a Top 3 (USNWR) USA business school couldn't answer their own question "What isn't included in a business model?" It's a very big term, stopping to think about it... with very fuzzy boundaries.
As far as business plans go, my perspective aligns with Michael's. Where I've taught, the coherent content of the business plan should go a long way in helping teams to respond to investor challenges or customer questions in informed, confident ways.
Do teams need to write a business plan if they have lived and worked with each other for decades and all have the same exact shared vision? Maybe not. But most student teams don't have that luxury.
Is it possible for a team to be completely confident in a pitch without writing a business plan? Maybe. But in my experience, if the team hasn't had the diligence to go through the motion of crafting a business plan, more often than not, that confidence is *blind confidence*. Ask the team really good obvious questions and they just throw up their hands like fools. We can argue until the cows come home just how well a team should be able to judge contingencies and respond to challenges. But a good business plan should be able to define the basic lay of the land.
Ideally our entrepreneurship programs should be teaching students how to be genuinely and legitimately confident in their entrepreneurship, whether via theory, logic, or experimentation. And that could turn out to be the kind of confidence that they know that they have no idea what they're doing and thus need to experiment.
Nevertheless, my own take is that a business plan is best used like a soup. Boil it down to its essence, take a taste, and if it's not satisfying, add water and ingredients, and boil it down again. Any good typical X-page business plan should ultimately be able to be used to design the 30-second pitch and the 3-minute pitch, and be able to respond intelligently to most Q&A challenges. Besides, anybody can cut-and-paste somebody else's business plan. But the original writers of a good business plan are also often the only ones that can look good in front of a firing squad. Plagiarists are caught pretty easily.
What I've often seen is that students don't realize the value of the business plan until they start whittling that 12 pages down to 1 page.
Again, for me, the business plan is a bowl of soup. And the 30-second pitch or 3-minute presentation is the soup's tablespoon of essence. And once you've got the essence, you don't really need to show anybody the soup anymore.
(That's why I imagine the old days where the business plan is "a living document" are basically over.)
And anyways, good luck with creating a valuable essence without a good soup.
(Note that for me, a good canvas is just as good as a good business plan.)
I can talk about this topic for days more.
My .02. Cheers.
| Regards, -chihmao -------------------------
Chihmao Hsieh
Associate Professor of Entrepreneurship
Graduate School of Information
Yonsei University (UIC) website: www.chsieh.com
tel: +82 032 749 3085 |
I find this to be a straw man argument. To me it is silly to ask the question "business plan or business model"?. Both are important and both play critical roles. At the stage of an idea or concept, the model (either the canvas or the other and often better frameworks available for the business model) can be quite useful. For students and teams that are moving to the point of taking a concept to a viable business that operates 365 days of the year, has employees, makes payroll, does real marketing and selling, and is actually dealing with suppliers and producing a product or delivering a service through a real-time operating model, they need the discipline of a business plan---and it imposes far more discipline than does the business model. As a colleague of mine liked to explain, the plan is the blast furnace in which the metal is formed and shaped into a viable shape with regard to a wide range of issues not addressed in the business model. The business plan is not a straightjacket---it is a platform for adaptation, experimentation and innovation. And it has a short shelf life, as encounters with reality then force ongoing adaptation and continued learning --- as the actual opportunity and a workable and sustainable business model emerge once the venture is launched.
At UF, our business plan competition produces about 300 entries from across the campus each year. We provide support to all of these teams that seek it, and a large number of decent plans are produced. The learning that occurs, the real progress the teams make in moving their ideas forward, and the number of actual ventures that get launched is greater than would be the case if we only had them construct the business model. Certainly the business model would also enable them to make progress. At the end of the day, both of these tools matter, both play a vital role, and neither should be castigated. The bigger issue is the extent to which the entrepreneurship program connects the dots. That is, how one connect the business model, the business plan, your student incubator, competitions, coursework and curriculum, entrepreneurial mentors, guest speakers, open sessions on pricing, QuickBooks and many other topics that support venture creation, the tech commercialization office, prototyping facilities, your community engagement intiatives, or whatever else you are doing in entrepreneurship at your college or university (in short, your internal entrepreneurial ecosystem) is the key to moving student ventures forward and actually seeing a lot more start ups come out of your university.
Mike
Michael H. Morris, Ph.D.
George and Lisa Etheridge Professor of Entrepreneurship
Academic Director, Program in Entrepreneurship
Warrington College of Business Administration
University of Florida
Ph: 352-273-0329; Fax: 352-846-2170
Website: www.cei.ufl.edu
Morning,
At
Ryerson we have shifted from business plans to canvases. This become an issue (aka an opportunity) for our business plan
competition to evolve.
In the end, we pivoted our $50,000 Business Plan Competition to the
$50,000 New Venture Competition. The business plans were replaced with lean canvases and traction summaries.
In the end, our applicant pool
increased in quality, as founders were more focused on traction and obtaining customer based objective evidence and less focused on the font in the business plan.
As for p2p articles on the topic, try these:
- Jones, C., & Penaluna, A. (2013). Moving beyond the business plan in enterprise education. Education+ Training, 55(8/9), 5-5
- Jones, C., Penaluna, A., Matlay, H., & Penaluna, K. (2013). The student business plan: useful or not?. Industry and Higher Education, 27(6), 491-498
- Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review, 91(5), 63-72
You may also be interested in these trade articles: We also published a conference paper on the topic of business plans in business schools.
Teaching the Business Plan Within the Entrepreneurship Program
Kenneth A. Grant, Steven A. Gedeon, Sean Wise & Phillip Kim
Hope that helps, onward and upward,
Sean
Dr. Sean Wise | BA LLB MBA PhD
Associate Professor of Entrepreneurship, Ted Rogers School of Management, Ryerson University
Chair, Ryerson Angel Network | Chair, $50,000 Slaight Business Plan Competition | Member, Digital Media Zone, Steering Committee | General Partner, Ryerson Futures | Director, Startup School | Host of the Naked Entrepreneur, on the Oprah Winfrey Network & itunes
apple.co/1HdPlWD Order my latest book on Entrepreneurship (co-authored with legendary investor Brad Feld) now: Startup Opportunities: Know When to Quit Your Day Job
amzn.com/1941018009 ᐧ
On Wed, Jun 29, 2016 at 6:31 AM, Boyd Cohen
<bcohen@eada.edu> wrote:
I suspect this topic has been covered here before although I haven't seen it recently. I do recall some asking about how they do business plans in their programs but my question relates to the extent to which we have shifted away from business plans in entrepreneurship programs towards design thinking and lean startup.
I ask because I am at a private business school in Barcelona (EADA) where all our students are masters (MBA, EMBA, IMBA, etc) and every program uses a roughly standardized business plan project as the capstone to the Master's. This is my first year at EADA and I have grown increasingly frustrated advising teams on business plans (I have 4 teams where I am their primary tutor) because I no longer believe in the value of business plans at the concept stage of a startup.
Has anyone done any research (does not have to be peer reviewed) on the shift away from business planning in entrepreneurship programs? Do any of you have any anecdotal or other supporting evidence I can use at EADA to help convince the administration that it is time to shift to design thinking and lean startup? My personal research interests are in areas related to sustainable entrepreneurship, sharing economy, etc. so I am only advising students in those areas but I still find it frustrating that we are doing everything in the hypothetical world instead of executing MVPs and learning from real users.
Thanks in advance for any of your thoughts.
Boyd
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