Why business plans and business competitions are not the right way to start for startups. How to do it instead and which tools will help you.

Intro

First of all I’ve to say, that this is my first article on Medium. Many of the articles and they always got me inspired. Writing an article by myself scared me but anyway … if you like it I’m very happy, if not please tell me what I could do better — and if you learned something — wow, amazing!

It all started 2012 at the Startupweekend Munich. We had a nice idea and guess what, we made 2nd place “most innovative idea”, right from the start. A few weeks later my best friend Lisa and I started “Liebthings” the “The Women Beauty Survival Kit”.

I knew the business model canvas from the startup weekend and for me it was quite logical to use that tool for our startup again.

The business model canvas is a tool for going quickly through 9 major parts of a new company. It’s much more efficient than a big business plan. If you’re are working on a startup or a new idea you schould really use it. A link to it is on the list later in that article.

But instead of using that new tool and doing prototypes we were writing business plans. Yes — plans — plural. Even today, when you’re in Germany and you want to start a business, everyone is telling you to write a business plan. “Everyone” is everyone you get to know in the early stage when you google for help and go to some official institutions and ask for help. Please don’t get me wrong here. There are many people who know how to do it the right way but when you haven’t already a contact into the real startup scene you’ll mostly find people on Google who tell on their websites they know what they’re doing.

In the end we produced the first 1,000 pieces of the product and hoped everything will work.

If you ever watched the “The Top 10 Mistakes of Entrepreneurs” from Guy Kawasaki. It’s like his example of dogfood. “There are 300 Million Americans. Every 4th owns a dog. That’s 75 Million Dogs. Each dog eats two cans of dogfood per day. That’s 150 Million cans of dogfood per day. How hard could it be to get 1% of the market? That would be 1.5 Million cans of dogfood per day. And if me make 2$ of every can, that would be 3 Million $ per day — multiplied by 356 days — conservatively speaking … we should do 1 Billion $ a year.”

Yeah sure — NOT!

You start a new product, in a market which you think you know, sometimes the market even doesn’t exist yet. You don’t know hgow much people are willing to pay. You don’t know which marketing channel is the right one, maybe you don’t even know which business model is the right one.

7 reasons why business plans for startup s*ck

1. Without having your product developed, knowing if people like your product and why and how much they are willing to pay a business plan is just based on wishes to come true, not facts.

2. The business plan does not tell you to do a prototype of your product 1st and ask your potential customers for feedback.

3. The business plan does not tell you that you don’t get any money from an investor before you have traction. That means you need to have the amount of money in revenue in one year for the amount of money you want. Or — when your product is a free service or platform you get about 1$ for every signed up customer. And a bank -ha ha ha- never will give you any money for your idea unless you don’t have the same amount of money already somewhere as a backup for them.

4. The business plan forces you to build on fictive numbers on which you take your decisions — very dangerous!

5. The business plan is used for over hundred years and never changed.

6. A business plan is not able to give you the flexebility you need as a startup to succeed. On the journey of building a product you’ll have to adapt your assumptions many times.

7. Last but not least an investor never asks for your business plan. None of the great products, apps, services we love startet with winning a business plan competition.

About business plan competitions

Really? Business plan competitions feel like in school. The one who did his homework gets a smiley. For what? Early traction and customers who already pay? There are many small great ideas these days which are usefull and we even like to pay for. And small good ideas become bigger fast. That proves that there is a market. You have to leave your screen and go out and ask people for feedback. Business Plan Competitions cost you even more of your most important resource:

Time!

Winning them proves nothing. Yes, I know. You can win money you could put in your idea. When you are not inventing the engine of the future or a new method for transplanting a heart you have to do it with you own resources. Even if you have the idea for the future engine: Then you have to get into a reasearch program and work with scientists. Then it’s as well not about the business plan and even more about the solution for a problem you want to build a product for.

Those things cost you about 80 $. And after you watched and read those things, trust me, you’ll have learned a lot and are amazingly well prepared for your start up.

Since 2012 we worked for many startups and helped them developing their brands. We talked to many successful startups and asked them what did help them. We read everything on the net we could get about startup tactics. And we got into the growth hacking. We collected about 1,000 articles, tools, infographics, tutorials, videos and books. The list above is a short top 7 overview of those things, which we think help the most. The other resources you’ll find soon here:

StartupWings.me

It’s free. Here you’ll find every resource your startup needs. You can connect to other entrepreneurs and exchange your learnings and your know-how. You can get feedback on your idea and reach early customers.

If you like the idea you can signup for an early invite. We’ll launch soon.

We used the things I talked about above and many from resources we collected. We got featured on Betalist and we already have more than 350 signups. It looks like it goes well. That’s why we decided to share the things above with you!

Whatever you do. Don’t stop doing, learning and starting again. And don’t take too much advice. Listen to your heart and if you’re not sure, decide on what you feel. Some things may won’t make sence in the moment they happen. And sometimes it may scare you to start your own business, even if you love what you want to do — but if you keep your eyes open and keep going you’ll make it!

Everything you do gets you always in one direction. Forward! Every failure, every learning, every success will make you more experienced and will get you forward step by step. A quote which I really like in that context:

“The dots connect in the past.” (Steve Jobs)