Surprise. A venture capitalist and I actually agree! (deep silence)
I heard Richard Sudek, Director of the entrepreneurial program at Chapman University’s Argyos School of Business and Economics and past Managing Director of the Tech Coast Angels, speak at Inside Edge in Orange County. I found myself nodding “Yes” to most everything he said, instead of shaking my head no and wondering how these guys make any money. Having spent the last 7 years in CEO and Executive offices of funded startups/growth companies, I can tell you that rarely do VC’s and I have a meeting of the minds except when it comes to exit plans.
Richard talked about business plans. Most everyone is bullish on them and the conventional wisdom is you can’t succeed without one. I have never understood how a couple page document could be the secret to success, especially since only a small percentage of companies successfully execute their original business plan. Richard suggested that what is important about business planning is the process needed to develop a plan. I couldn’t agree more. IT’S THE PROCESS, NOT THE PLAN that’s important. A sheet of paper means nothing without profound understanding of the concept and market, tight alignment among the team members regarding approach, direction and business model, and the commitment that comes from deep thinking about the opportunities and challenges ahead as well as the soul searching needed to go forward in the midst of inevitable uncertainty. It is the shared understanding and complete commitment that come from going through the planning process together that generates success. A business (or project) plan is only worth the process that went into it. The document is just a statement of the profound conversations, considerations and commitments that have resulted in the plan. One page or 100 pages – what was the process that went into developing the plan?