Don’t overthink or overdo your planningby Derek Lidow When people think of planning and entrepreneurship they usually think of an aspiring entrepreneur producing a business plan that they can use to get a stranger to be an investor. Many schools focus their entrepreneurship classes and programs around creating a business plan. While the sections of a business plan can force students to think of how the future could unfold and therefore be a good teaching tool, if you are actually thinking about starting an enterprise out in the real world business plans are not a good use of time. Time is such a limited resource, you don’t want to waste it; you only want to spend time thinking about the problems you can accurately foresee that could cause your enterprise to fail when you can do something about it. How not to waste time, and what to spend it onAs you start your entrepreneurial journey, you want to focus on confirming or modifying your initial ideas about your potential initial customers. If your idea will not make enough customers happy enough to gladly pay you enough for you to make a living, then there is no point wasting time thinking about how you will implement your idea. Our sprints 2 through 6 guide you through the most efficient set of steps in figuring out who will like your idea enough to gladly pay you something, and how many potential customers can you initially get interested. Some aspiring entrepreneurs can skip over these steps if they have already worked with their potential customers and they have a high level of confidence in whom to initially target and how much they will pay. I will point out though that most teams that spin out of companies in an industry who think they know what will excite customers and many confident serial entrepreneurs find that their customer assumptions were wrong. Finding your initial customer and testing to see if your idea can actually make them happy enough to pay you money, is make or break, so unless you are super sure, talking these steps is your plan. Once you confirm which group of customers will gladly pay you to make them happy, and you have an initial idea of how many you can get to easily and how much they may pay, the next steps of planning focus on simply: 1) getting a sense of whether what you think customers will pay can leave you enough profit to live on, and 2) figuring out how much money or other critical resources you may need to build a good enough working prototype that it can be put in front of potential customers to further confirm your initial research on who they are and how much they will gladly pay you. If your idea looks profitable and you have enough funds to start building your prototype, then the next two steps become: 3) understanding what brand you want to create, and 4) figure out where you’ll look for any funding to create your prototype. You do not need to plan out operations or marketing plans at this point. You do not need to do a detailed competitive analysis beyond what you already have done to come up with a credible estimate of what your target customer will initially pay. In the early days of your enterprise, your competitive advantage will come entirely from you knowing more about what will make your target persona super happy than anyone else. We help you get through these next steps with our sprint 18 on planning, sprints 19 and 20 on branding and sprints 21, 22, and 23 on funding. With gratitude, Derek and Ben P.S. If you like what we’re doing, please consider recommending this newsletter to another person you think would benefit from us. It really helps us build out our free content platform.
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