Business Plans Are Sometimes Replaced By Business Model Canvas
Stanford, and other business schools, has a strong focus on entrepreneurship. I’m impressed by how things like business plans have been replaced with more modern tools like the business model canvas. If you’ve never seen a business model canvas, let me invite you to go to wikipedia or a similar location and investigate. A low-res sample of the setup is included above.
Canvas Is Less Cumbersome Than Business Plan & Easier To Prepare
The business model canvas is one of the current tools used to design and startup new business models. It’s much less cumbersome to prepare and, perhaps more importantly, is a graphic representation of a business model that is easy to review owing to the fact it’s exactly one page long.
Canvas Serves As Visual Record Of Business As It Evolves
This tool often serves as a visual record of the business as it evolves. For example, when a startup team meets and chooses to adapt its business model, a new or modified business model canvas serves as a visual record for where that model is at that time. These are easy to review later as a history of the startup.
Even Most Well-Constructed Business Plan Rarely Survives First Contact With Real World
Why focus on a flexible plan to this degree? Well, as any startup team member will tell you: even the most elegant business plan rarely survives first contact with the real world. For those of us who have done this before, and likely you if you’ve had startup experience, we recall a famous quote by none other than Mike Tyson (which is one of my personal favorites): “Everyone has a plan until they get punched in the face.”
Flexible Decision Making Strategies Are Useful For Fluid Situations
So it is with startups. For that reason, modern emphasis is placed on more evolved decision making techniques such as decision trees, Boyd’s OODA loop, and similar modern methodologies for decision making in fluid situations where uncertainty abounds. Here, of course, this is uncertainty in the sense that there are multiple paths a situation could take, and these branch points introduce probabilities we can try to quantify in order to make the best possible choice given the expected type of outcome.
These newer, effective tools can be utilized by us whether we are business people or surgeons. They can line up the probabilities so that we have the greatest chance of success. In later posts, we’ll discuss some of the tools for addressing a fundamental issue we face every day: decision making in uncertain situations.