Fire the business plan, not business planning.

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Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…

1 Universal Principle

“Fire the business plan, not business planning.”
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Have you ever written a “Business Plan”? Chances are high that if you have, you don’t anymore.

Yes, traditional business plans aren’t well suited for speed and uncertainty, but a no-plan alternative isn’t any better.

Here’s why:

2 Underlying Strategies at Play

I. You can’t test a vague idea.

While you can go fast with a no-plan or wait-and-see approach, getting lost faster is easy without some direction.

“If you don’t know where you are going, any road will get you there.”
‍- Adapted from Alice in Wonderland

Even when you find validation, unless you know how much validation is enough, it’s easy to get stuck on a small hill (local maximum) and miss an opportunity mountain because you weren’t looking.

II. A “good” idea isn’t enough.

Not all ideas are created equal. Even good ideas on paper may only be a good fit for some founders but not others.

The real output of an early-stage business planning exercise isn’t to find a perfect idea that you then execute. That’s impossible for the reasons above.

Instead, it’s about uncovering the key constraints or design criteria for a “good” idea. And “good” is relative to your ambition and goals, not anyone else’s.

This is the essence of first establishing “Founder/Model Fit.”

“Create your life plan before your business plan.”
- Bo Burlingham

So, how do you uncover these key constraints or business model design criteria?

I use three lightweight mental models:

1. ​Lean Canvas​ to describe my KEY (customer) BELIEFS
2. ​Customer Factory​ to describe my KEY (customer) METRICS
3. ​Customer Forces​ to describe my KEY (customer) INSIGHTS

KEY customer (BELIEFS + METRICS + INSIGHTS) = BUSINESS MODEL DESIGN CRITERIA

These three models don’t just serve you during the design phase but keep you accountable throughout your product’s lifecycle.

3 Actionable Tactics

I. Don’t write a business plan. Sketch a business model instead.

A Lean Canvas helps you deconstruct your big idea into key assumptions or beliefs.

Your beliefs start as leaps of faith. You aim to turn them into facts backed by evidence and protected by insights (or secrets).

II. Don’t drown in numbers. Focus on key metrics.

Instead of creating fictional financial forecasts that exercise your “Excel-magic” powers, you’ll be better served to create a bottom-up Fermi estimate or back-of-the-envelope sizing.

My preferred model for this is the Customer Factory.

It is possible to test the viability of any idea using just 3 to 4 key metrics that shape and define your business model mission (goal and go-to-market strategy).

This same customer factory model then evolves into a company-wide dashboard you use to

1. Measure progress
2. Identify bottlenecks or constraints
3. Drive focus

III. Don’t get blind-sighted by grand visions. Uncover key insights.

While passion and determination are essential to driving a vision to its full potential, when left unchecked, they can also turn the journey into a faith-based one driven by dogma, which doesn’t show you the way but blindsights you to a dead-end.

Reasonably smart people can rationalize anything, but entrepreneurs are especially gifted at this.

The key is to quickly turn your key beliefs into key insights that unlock the next infection point in your hockey stick.

An insight (or secret) is a non-obvious understanding of customer behavior that needs to be learned or earned.

My favorite model for this is the Customer Forces behavior model:

Unlocking these insights helps you discover

• new customer acquisition channels,
• better positioning,
• features your customers want, and more…

That's all for today. See you next week.

Ash
Author of ​​Running Lean​​ and creator of ​​Lean Canvas​

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P.S.

Goodbye Business Plans. Hello Business Models:

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