A Business Plan Should be a Process of Discovery
William Sahlman: Without overconfidence, I’m convinced entrepreneurship wouldn’t take place.
I’ve read probably 5,000 business plans at this point, and I have no idea whether it’s 10,000 or 3,000, it’s a lot of business plans. What I know is, only three or four companies have actually met their plan.
So the first thing I know is that people are overconfident. And in fact, without overconfidence, I’m convinced entrepreneurship wouldn’t take place. Now, to survive overconfidence, you actually have to believe and be on a path to find the right solution, to serving customers at a profit.
So these things are discovery processes. They’re about not knowing exactly how the market is going to evolve, and searching for tangential markets or places where they can create growth options. And so, the way I’ve come to think of it is just really a series of structured experiments, a process of discovery, a process of learning as you go and adjusting, modifying the people who are working with you, modifying the resources that you bring to bear on the opportunity.
So it’s a very, very interesting process, not about being able to predict perfectly, but rather about being able to find opportunity.
In Their Own Words is recorded in Big Think's studio.
Image courtesy of Shutterstock
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