Twenty years ago Brian O’Kane and I wrote SYOB, a workbook to help you write your business plan. We are currently working on the 4th edition, and it is a good time to reflect on what has changed.
The conclusion is that business planning is dead. Long live business planning. Lots have changed and at the same time very little has changed in 20 years.
The gig economy is here to stay
Starting a business is still a decision not to take lightly. Although given the developments on the labour market, it is now a much more attractive and sensible option to consider. You only need to read Seth Godin (Poke the Box), Naseem Taleb (Antifragile), Lynda Gratton (Shift) and listen to Ken Robinson to understand that we all will become self-employed contractors on the labour market. The gig economy is here to stay.
Staying in business is tough
It is still difficult to make it as an entrepreneur. It was more difficult to start twenty years ago, and technology commoditization has made starting easier, but staying in business is still as difficult as it ever was, if not more so.
Paying the price
It is still about attitude, grit, hard work, sacrifice and willing to pay the price. With stoicism as the operating system, accepting the brutal facts, including a 70% chance of failure. But if you haven’t failed, you haven’t lived.
Sales, sales, sales
We now have agile, business model canvas, minimum viable product, lean, pivoting and that is great. However, it still is about selling. Social media has made that easier and more difficult. Particularly in the market research phase. A “like” is not a lead, let alone a sale. You still need to do the mum’s test, and you still need to get traction. Every day, for the rest of your life, preferably while you are hanging in a hammock, drinking Pina Colada.
The pace is quicker compared to 20 years ago. The way you can now collect immediate feedback is amazing. Particularly crowdfunding is the perfect test for traction. Proper use of social media can be your ally.
Technology is moving a neck breaking speed. You are competing on a global scale and the response time by competitors to new ideas is near instant. That is why you need to focus on and find the most relevant niche/segment/beachhead. And then control that niche.
Small is beautiful
There seems to be more emphasis on tech, scaling and going big. Ignore that. Today is the perfect era for the portfolio worker, the lifestyle entrepreneur and family business and there is nothing wrong with staying small.
Organisational structures have changed. Start-ups are all much more fluid and community driven. Increasingly driven by a transformative purpose.
The business models have become cleaner because we measure a lot more and know the metrics. That also has taken some of the fun out of it. And just remember, there were no metrics for iPhone when it got conceived. Apple only applied all the metrics once they executed. What worried me that metrics could kill the creativity to make the real leap that start-ups need to make
What worries me, is that there is a glibness about start-ups. Pitching is not starting a business, is not staying in business and definitely not growing a business. There is a world of pain out there.
We now pitch and present more and think and prepare less. We are better at understanding the structure of problem-solution,-magic (with thanks to Guy Kawasaki). And the elevator pitch, the canvas and Lean all have their place. Because it forces the doing, the instigation capital we all have.
But you know what. All principles of business planning still apply:
- Market research. Just because things have sped up, does not mean you don’t need to be thorough. It is easier now to collect the information, and you can cast a very wide net. It still needs to be done and is still needs graft and grit and blood and sweat. Agile and lean are no excuses. Given the speed of business, it is now more important than ever. Particularly the competitive analysis. And if you do manage to create a value proposition I would put a number on it (better has value in time, emotion and money)
- Strategy. 4 years after SYOB we wrote GYOB. We reinvented strategy and created the strategic box. Define the parameters you operate in, focus on movement rather than planning and keep moving by setting targets. Always keep the vision in mind. And if I would write SYOB again, I would anchor the vision into the founder’s dreams, but I would put numbers on them. Quantify the vision. Calculating your aspirational break even.
- Selling. Nothing changed here. In fact, it more of a lost art compared to 20 years ago.
- People. Culture is important. Organisation design is even more important. How do you get the best out of your people? It is now about (transformative) purpose, passion and the rookie advantage. I would spend more time on creating a good (advisory) board and swimming with the sharks.
Fluid and rigid
There is no question. Starting and running a business has become more fluid. It is hard to combine that with the rigidity of a business planning document. But planning, preparation and thinking things through, are now more important than ever. The business planning process is still the game in town to do that.