Who Wins In Business Plan Competitions?

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A business plan is the execution document that large companies write when planning product-line extensions where customer, market and product features are known. The plan describes the execution strategy for addressing these “knowns.”  In the early days of venture capital, investors and entrepreneurs were familiar with the format of business plans from large company and adopted it for startups. Without much thought it has been used ever since.

Most startups are facing unknown customer needs, an unknown product feature set and is an organization formed to search for a repeatable and scalable business model.  That means that writing a static business plan adds no value to starting a company, as the plan does not represent the iterative nature of the search for the model. A simple way to think about it is that in a startup no business plan survives first contact with customers.

Business model presentation can be categorised into the following:

  1. What did you initially think your initial business model was? (initial business model hypotheses)
  2. What did you build/do? (built first product, talked to users, etc.)
  3. What did you learn outside the building? (parts of our feature set/business model were wrong)
  4. Then what did you do? (iterated product, changed business model, etc.)
  5. Repeat steps 1-4

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