I’ve found myself saying “events overtake companies” a lot this
week. I’m not sure exactly why it was the phrase of the past week, but
I did spend a lot of time talking to entrepreneurs running businesses
that are growing rapidly, causing the founders to rethink their
strategic plans.
I think less than 20% of the companies we back
end up doing what they started out planning on doing. They build
something, get it into the market, and then things happen. Often it
turns out the market wants something a bit different than they are
offering. Or that the users adopt one part of the product and don’t use
another part very much at all. Or developers start building things on
top of the API that opens their eyes to a much bigger opportunity. Or
it could simply be that the market loves what they built and they have
to spend all their time on scaling and infrastructure and all the
things they planned on building go to the back burner.
There are two big takeaways from this for me:
1)
Don’t get too attached to your strategic plan. If the market is telling
you something different, go with it. The best entrepreneurs I know are
great at “listening to the market” and quickly taking that input and
reshaping the business to take maximum advantage of it.
2) Don’t spend too much time on planning. My partner Albert wrote a post this past week about “making versus planning.” In that post, he said:
I would spend as little time as possible on the planning and focus
instead on turning their prototype into a working system and getting
that out into the real world. They will learn more about the viability
of what they are working on (and more about business) then any amount
of planning could tell them.
But
don’t take this post as a dismissal of the value of strategy and
strategic planning. Strategy is critical. Everything flows from the
basic strategic plan of the business. You need to have one, but keep it
really simple at the start and be prepared to evolve it quickly once
the market starts talking to you. If events start overtaking the
company, go with them, it’s usually the best approach.
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