The business plan is dead. Long live the business plan!

It’s like watching the fall of the Berllin Wall in slow motion: The Business is Dead. Long Live the Business popularity of the traditional business plan wanes, many of us are joyously dancing on the rubble. There’s good reason to rejoice- business plans wasted a lot of people’s time. Many would argue (and I’d be one of them) that these plans actually had a negative effect, creating the illusion that the business was cohering to a plan when in reality the relationship between the plan and the business was weak, particularly after light aging of the plan.

But when you tear something down it creates a void. Ideally, you fill that void with The Business is Dead. Long Live the Business Plan.something better, which wouldn’t be hard to do in this case. The four strongest contenders changing the way we run businesses are design thinking, Lean Startup, customer development, and agile. They’re easy to understand and they really work, but the body of practice is small and the best practices still emerging. In particular, there’s a lot of flux around how the activities map to traditional job roles (some of which are going the way of the business plan themselves).

So, how do you fill this business plan void? First, I recommend separating out the individual items you need to run this business day to day from items you may need for presentation to various stakeholder audiences. Yes, there’s some overlap but not a whole lot. In the diagram below, you can see these items separated into ‘operational’ and ‘presentation’ elements within a VENTURE STACK:

personas, problem scenarios, & user storiespositioning statementbusiness model canvaslean startup-style assumptionsfinancial planfive forces analysisBusiness Plan 2.0- The Venture Stack

For example, at Leonid, the company I founded, we keep a set of personas and problem scenarios on a Google Doc. It’s mostly for internal use. When we need a pitch deck for something, we put that together, drawing heavily on source items from the Operations Stack.

The items above with underlined text link to resources and templates on this site which I think you’ll find handy. If you’re looking for a more sequential view of how to use the resources with regard to the Lean Startup ‘Build-Measure-Learn’ loop and customer development sequence, check out the RESOURCES PAGE.

If you’re looking for a program to walk through with a startup team (any team introducing a new product), check out Startup Sprints. It’s a structured program with 5 cycles for stepping through the items above.

  • Vanda

    Very useful and insightful article! I’m an engineer, not a manager and as a first-time entrepreneur I felt frequently overwelmed with business issues. And as my project develops, I find that business plans are not suitable. The traditional methods are not suitable for technological & innovative startups as mine. As an innovative startup, I also want do use innovative management methodologies. That was how I find this article. Very helpful, thank you!

  • Katrin

    I have been thinking the same for a long time. Business plans serve only banks, and no one else reads 50 or 100 pages today anymore. I studied several approaches of business modelling like Lean Startup and BMG and when applying it, I got so much more value and clarity for myself than I believe I would have ever gotten from writing out a business plan.

  • Great post! Gonna add this as a reference to mine! Thanks, Alex!