Are traditional business plans in the tech startup world mostly useless?

Traditional business plans often have hundreds of pages that nobody will ever read

The act of traditional business planning and the methods involved are still very useful in the tech startup world. However, the artifact of a traditional business plan (with lots of prosa, fancy diagrams and about 100 pages) is mostly useless — even in the non tech startup world! I wrote an article on Medium about this titled Don’t write a business plan.

Let me explain my point:

Lean Startup, Custdev or Design Thinking do not negate everything that has been done in planning a business in the centuries before — these new methods augmented and adapted that planning to today’s markets. So planning your liquidity, analyzing your competitors, your strengths and weaknesses and so on are still essential tools for any company.

But the business plan in itself does more harm than good. Here are a few disadvantages:

• it keeps you focused on just one possible business model
• it is hard to change even in the face of new learnings
• it is hard to read or communicate to others
• it tricks you into believing you could predict the future
• it often treats guesses about the market as facts

All that is dangerous — insanely dangerous! So we need to get rid of traditional business plans and the thinking that surrounds them (like “we can predict the future”, “my guesses = always correct”, “the first best business model in my mind will be the best — no need to learn and improve”). There is a wonderful tool and method that counters many of the dangers from above: the Business Model Canvas and methods like business model generation, learn startup, design thinking, custdev and so on.

If you’re serious about creating a business, you should definitely learn about the Business Model Canvas and how to use it correctly, to drastically increase your chances of success.

But at the same time don’t negate all the learnings from traditional business planning — gurus of modern lean approaches would never negate the wealth of knowledge before them. Just know what has changed in modern markets and why lean startup was “invented”.

Feel free to contact me for any questions around business models. I have been business model coach for many years and I love to help.