Successful startups do not start by writing a business plan. Business Plans are a tool for large companies. They are a poor planning tool, and a poor execution tool for startups. (Read Steve Blank’s article on Business Models vs Business Plans to lear…

Fostering entrepreneurship is the hottest topic that is circulating in almost every single university of Pakistan right now. No doubt that this is a good sign towards building next greatest generation of the country. This would be the kind of generation that will change the world around us. All of it sounds so good so far. But this generation is guided in a way that is an extreme disaster, and this sounds extremely negative. So what exactly is this next generation guided towards? Make some cool business plans on paper, get some decent amount in terms of prizes and then trash those business plans to make a new business plan in order to participate in YLES or INVENT.

I disagree on certain points that I must publicly express before a generation of “WANNA BE ENTREPRENEURS” start dominating the world.

There are two types of businesses:

1. A business that is planned on a piece of paper
2. A business that is operated in reality

Many of you would definitely argue that we have to plan things first. Make some nice projections for the next 5 years which include expected operating cost, revenues, net income, human resources and every nice spice that you can add up to the business plan. But all of this is nothing more than a piece of trash, and why all this pretty impressive planning is trash? We have been told that planning is the first step towards building something and without planning we can not move forward, planning is an integral part of any organization. All of this is just a theoretical teaching that is being propagated in an average BBA/MBA class. These theories has nothing to do with the startup/entrepreneurship world in reality.

Here I don’t completely disagree that planning must not be done before executing any visions. Yes we do have to plan things, but we can’t let the plan move us. The business plans presented at YLES/INVENT/P&G events are just plans since they explicitly mention that “Take part in the most exciting BUSINESS PLAN competition and then trash those plans in the nearest bins”.

After planning comes those real world scenarios that these competitions guarantees to replicate/generate. Wait for a second ! What? Real world scenarios being replicated/generated? Yes they do replicate real world scenarios but not the real world business scenarios. What exactly is the difference between real world scenarios and real world entrepreneurship scenarios?

1. A real world scenario is replicated at YLES/ INVENT/P&G BPlan Competition while a real world business scenario can only be experienced at real business.

2. A BPlan Competition means that you have to show your revenues and net income with a decent idea on a piece of paper while a Real World Businesshas to generate real revenues and real profits with changing strategies as per needed.

3. A BPlan scenario means that you write good plans then you get some insight on those plans from your teachers. You will be graded on those plans then you will move to next level and then HURRAH you did something marvellous. Now you must be a proud son/daughter since you have won YLES or INVENT or P&G BPlan Competition. A real business on the other hand means you have to work for 18 hours daily. You have to listen some good and some extremely awful feedback from customers. You have to operate under your limited resources. You have to run your business while forgetting your family, personal desires, fun, party etc. Above all you have to provide the best service/product to your customer. The customer in the real business is your main focus since you give something to your customer that is valuable. In the end your business grows, you get more customers, you create more jobs, you make a social impact and eventually you will change the world.

Some thought provoking suggestions:

1. I don’t know what was the exact budget of INVENT this year but let’s suppose it was 10 Million pkr (mentioned INVENT specifically because I am a CS student at IBA). From that amount we could have established 15 businesses right away by giving just 500K as the seed amount to startups in every possible domain.

10 Million – 7.5 Million (500K x 15{small businesses}) = 2.5 Million (This left over amount could be used for marketing and other purposes)

We can modify above calculations as per the budget.

2. Since CED @ IBA (Center for Entrepreneurial Development) is really active. I would suggest them to follow the model of international incubators, angel investors and VCs. They should consider small businesses with average ideas and two founders at least and seed them with 500K so that they can take their startups off the ground. This is equally applicable for every other department like CED at any university.

3. Suppose in a very worst situation the startup fails, then there is nothing wrong with that since failure leads to success and failure is the best teacher. A paper based plan can’t teach you the real experience but a real failure can teach you the real business. According to Thomas Edison if he failed thousand times he would have never said that he failed thousand times but he would have said that he had discovered 1000 ways that can cause failure or thousand ways that don’t work.

4. An entrepreneur is a person who is involved in building a startup from scratch. A startup in turn is a very disruptive/uncertain group of people who aim to change the world through their remarkable vision. There isn’t a single thing that can be predicted in the startup’s world. Everything is uncertain. So writing business plans on paper and getting graded on them won’t effect even a fractional percentage of the society. We have to impact the society through real businesses and we have to heal our economy.

5. We gain nothing by giving big prizes to paper based businesses since those winners end up doing a white collar job somewhere. Startup/Entrepreneurship is all about taking bold risks and changing the world by your vision and solving society’s biggest problems/challenges. You have to involve the students in taking real world risks not just writing some executive summaries and dumb stuff on paper.

“The important thing is not being afraid to take a chance.
Remember, the greatest failure is to not try. Once you
find something you love to do, be the best at doing it.”-
Debbi Fields, founder of Mrs. Fields Cookies

http://www.marsdd.com/entrepreneurs-toolkit/articles/Business-Model-Design