In a recent appearance at SWSX, Elon Musk explained that he’s not a big fan of business plans. Instead, he works at the visionary level and leaves the operational details to others.
I’ve known other successful entrepreneurs who work that way. Their motto is “if you build it, they (the customers) will come,” rather than “failing to plan is planning to fail.”
Such entrepreneurs see building a company as more like improvising jazz (start with an idea and run with it) than playing a symphony (disseminate a plan and follow it). To them, a business plan is burdensome overhead.
Does this mean that you don’t need to write a business plan when you launch your first business? Absolutely not.
Musk (and similar serial entrepreneurs) don’t create business plans for their projects because they’ve transcended the need for them, not because they don’t believe that plans are unnecessary. Let me explain:
In the early stages of a startup, a business plan performs two functions, one external, the other internal:
- It is a recruiting tool that convinces prospective investors, employees and customers that the company will be successful. (External.)
- It provides structure and direction so that everyone on the team can work together to achieve measurable goals and milestones. (Internal.)
Musk doesn’t need a business plan as a recruiting tool because he has more than enough credibility to attract investors, employees and customers.
Similarly, Musk has already built enough businesses that he no longer needs guide rails to tell him whether a project is where it needs to be.
There’s a larger truth here about mastering skills. When you start learning a skill (in this case creating startups) you must follow the rules to become successful at it. However, once you’ve reached mastery of a skill, you can break those rules. Indeed, it is only through breaking those rules that you can achieve the highest level of mastery.
Take computer programming, for example. One of the most important rules for writing clear, supportable code is that the code should be structured into blocks, subroutines and conditional loops rather than “spaghetti code” that jumps all over the place. However, some programmers are so talented that they can break that rule. To quote the Tao of Programming:
“There once was a Master Programmer who wrote unstructured programs. A novice programmer, seeking to imitate him, also began to write unstructured programs. When the novice asked the Master to evaluate his progress, the Master criticized him for writing unstructured programs, saying, “What is appropriate for the Master is not appropriate for the novice. You must understand Tao before transcending structure.”
Writing is like that, too. An experienced writer can intentionally break a grammatical or stylistic rule in order to get an idea across more succinctly and vividly.
For example, the previous sentence has two adverbs. As a general rule, adverbs (like adjectives) tend to weaken your writing. Thus, had I been writing this same column when I first started writing professionally, I would have found a way to write around those adverbs.
Today, however, I’m experienced enough as a writer to know that, in this particular case, the sentence does the job better (i.e. communicates more effectively) with adverbs, placed at the end of the sentence in order to suggest emphasis.
The same thing is true with business plans and entrepreneurs. In the beginning, you need a business plan but, over time, business plans become both less useful and less necessary.
Just to be clear, though, I’m NOT recommending that anybody write a complicated document based upon the many “business plan” templates downloadable on the web. As I explained in “The Secret to a Great Business Plan: Don’t Write One,” what’s needed and wanted in today’s ADHD business climate are ten slide that hit the main points.
But after you’ve founded a few companies and made them successful, you’ll no longer need even this minimal plan in order to move your business successfully forward.
Going back to the jazz vs. symphony analogy at the beginning of this column, the best jazz musicians–the ones who can improvise great music–usually have decades of experience playing music that’s less free-form.