Business Planning Vs. Business Doing

Here's a post I've just done for Virgin Media Pioneers. What's your focus this week: business planning or business doing?

David Heinemeier Hansson: Planning Can Be Harmful

David Heinemeier Hansson is a partner at Chicago software house 37signals. He’s the co-author of a great book ‘Rework’ which I have mentioned before on this blog because it really resonates with the whole Unplan ethos.

Here’s a great little video (2 mins) called ‘Planning Is Guessing’ taken from David’s presentation at Stanford University’s Entrepreneurial Thought Leader Lecture Series in January this year. David's take on business planning is that a start-up doesn't even know if it will be doing business in five years, let alone five months. A new business in a new industry has no clue what it will need long-term. In fact, he adds, most decisions for a start-up are incredibly temporary. His own experience at 37signals is that although they’ve been around for ten years, they only worry about ‘the next two weeks’ or if things are really crazy ‘two months’. They don’t worry about what next year might look like as it has very little impact on what it will actually look like.

Why NOT having an MBA is an advantage for starting your first business

Yesterday I met Marianne Cantwell of FreeRangeHumans who did a video interview with me on #Unplanning. You can check out her blog post here and watch the video below:

David Sloly at Ignite Bristol

Before we launched #Unplan at SXSW in Texas, David Sloly gave a sneak preview at Ignite in Bristol. Here's a video of his presentation (video from Ignite Bristol - thanks guys):

John Borthwick: A Process of Constant Iteration

One of the principles behind #unplan is not to sit on your idea crafting a detailed business plan but instead to take your idea to market rapidly and test it as you go.

John Borthwick is CEO and co-founder of Betaworks, who invest, build and buy companies in the real time web space. In this video interview ‘Going From Small To Big’ posted on the American Express Open Forum, John argues that you should iterate quickly. He advocates taking ideas to market very quickly within 90 - 100 days; pushing the idea into beta, watching users react and adjusting from there:

 “A couple of years ago people would sit around, think about a business, create a deck, go pitch it to people. That’s not what people are doing today: you build the thing, you push it into market, you see if it gets traction and then you go talk to people about partnering”.

37signals: Long-Term Business Planning Is A Fantasy

I’m looking forward to getting hold of Jason Fried and David Heinemeier Hansson’s book ‘Rework’. It’s clear that Jason and David share my thinking on ‘Unplan Your Business’ and some of my ideas on work and business from 'Juggle! Rethink Work, Reclaim Your Life'.

Their company 37signals agrees that organisational obsession with long term planning is futile. Here’s an extract from a great post on the 37signals blog by Matt from last May explaining why:

"Why don’t we just call plans what they really are: guesses. Unless you’re a fortune teller, long-term business planning is a fantasy. There are just too many factors that are out of your hands: market conditions, competitors, customers, the economy, etc. Writing a plan makes you feel in control of things you can’t actually control.

In fact, you might as well change the name of your business plans to business guesses, your financial plans to financial guesses, and your strategic planning to strategic guesses. Do that and you’ll probably start putting a lot less weight into those things".

37signals have created a great little video to promote the book. I love it; it could have been one of ours for ‘Unplan Your Business’! Check it out here:

How To Unplan Your Business: Video Trailer

Martijn Sjoorda: Don't Become Institutionalised

Martijn Sjoorda is Partner in Fresh Orange and Dialogic Leadership in the Netherlands, where he helps organisations become more effective, managing change be developing people. His take on business planning is that it should never be a procedure; his experience is that once it becomes institutionalised, it doesn’t get results. Instead Martijn advocates you should have a dot on the horizon that you are passionate about and focused on, but should constantly revisit how you get there. 

His other advice is: “don’t believe the bullshit in the spreadsheets”

Why Brian Halligan Doesn't Believe In Business Plans

There was a great piece in the Wall St Journal last month called 'Should Start-Up Founders Forget About Business Plans?' It profiled start-up Hubspot which raised funds without having a formal business plan. In the video below of his address at the Puerto Rica Venture Forum, founder and CEO of Hubspot Brian Halligan argues “it’s a fool’s errand” for start-up founders to create a business plan. Brian says: 

“When I was a venture capitalist investing in companies, I never actually read a business plan, so don’t even waste your time with a business plan”.


Instead Brian advocates that you keep things real simple by formulating a 1-page executive summary and a 10-slide PowerPoint presentation. Great, simple, effective advice.

Gary Vaynerchuk: The Reactionary Businessman

When he was in London last year I spent some time in the back of a car with Gary Vaynerchuk. Here’s our conversation about Gary’s attitude to planning: “A five year plan is impossible in a world where what five year represents is so different than it used to be”. Gary’s answer is to be open to opportunities and be a reactionary businessman.

Preethi Nair: Taking One Step Towards The Dream

Preethi Nair runs a business called Kiss The Frog that uses the principles of storytelling to inspire, enable and communicate change in business. Her clients include MTV, Lego and Deutsche Bank. She’s also a successful novelist. Preethi explains that rather than having a structured business plan she has a vision of what she wants to achieve and takes steps towards that dream taking into account factors like serendipity and coincidence.