In the “So You’ve Got a New Idea, Now What?!” course led by Frank Rimalovski (NYU Entrepreneurial Institute), GLI Fellows learn about “The Fallacy of the Perfect Business Plan” to understand why the majority of new ventures (75% of startups according to Harvard Business Review) tend to fail.
The fallacy exposes certain assumptions derived from conventional business practices that believe that to scale an idea is to create a perfect business plan. This faith in a static document makes ventures a hit-or-miss endeavor, rendering them vulnerable to three common mistakes:
1. Pursuing the perfect business plan isolates creative enterprises from those they try to serve. This isolation leads these enterprises to create solutions nobody needs or wants.
2. Business plans make new enterprises think they can create unshakeable long-term plans. These plans make arts leaders unresponsive to environmental changes affecting their enterprises’ impact potential.
3. New creative enterprises are not smaller versions of established organizations. We often think that a business plan is the reduced version of an established organization; that is not true. New ventures are searching; they do not unfold according to master plans. They navigate trials and errors while adapting and polishing their initial ideas as they continue to learn about the communities they wish to serve.
So how can creative enterprises scale their ideas? By searching their business plan on the field. Adopting an unassuming scientific mindset that constantly tests intuitions will bring forth the proper framework to create a substantial and viable impact. ▣
Source: “Why the Lean Start-Up Changes Everything” by Steve Blank. HBR, May 2013
