Steve Blank is a New Yorker, founder of E.phipany and professor at Berkley University. In his article titled “No one wins in Business Plan Competitions” he talks about the importance of moving from business plans to business models.
Blank is certainly in disagreement with schools that encourage business plans competition which, to his perspective, only “makes the school appear relevant to their constituencies; students, donors, faculty, VC’s”. Instead he proposes the implementation of business models. This new theory is focused on staying true to the customer rather than the market. It is an on-going and ever-changing evaluation of the company performance rather than an original plan that may or may not work.
The business model proposal is based on 5 steps:
- What did you initially think your initial business model was? (Initial business model hypotheses)
- What did you build/do? (Built first product, talked to users, etc.)
- What did you learn outside the building? (Parts of our feature set/business model were wrong)
- Then what did you do? (iterated product, changed business model, etc.)
- Repeat steps 1-4
Finally I decided to take advice from one the richest man in the world. Carlos Slim has built a 35 billion dollar value for his companies. This magnate built most of his assets through Telmex, the biggest telecommunications and cell phone companies in Mexico.
Regardless of his image, usually a strict and money driven person, he has given excellent pointers to entrepreneurs like us. In an interview with the New Yorker Slim talks about his business perspectives but an article written by Tiffani Jones Brand for Second & Park puts things into a much concise way:
- Create a simple organizational structure with minimal hierarchies; provide personal development and in-house training for executives.
- Don’t be a big fish in a small pond. Don’t invest in non-productive assets.
- Clear objectives and the right tools will lead you through all challenges.
- Reinvest profits in the company. Money that leaves the company evaporates.
- True corporate creativity can be helpful to both business and society.
- Firm and patient optimism always yields rewards.
- Know how to work hard, and use the right tools.
- Leave with nothing. We can only do things while we are alive. Businessmen are creators of the wealth that they temporarily manage.