I am a part of a start-up recently launched to address a long-standing need. We are a team of three here in the US doing the start-up work. We have a crack team in India that is doing the platform development and sales to the local customers in India. In addition, we also have an advisory board of well-established professionals. This start-up is about connecting people to mentor each other for their professional development across the globe, and we already have some marquee customers, who are paying and using or are ready to start using the platform.
We raised an angel round during the early stages of our venture, which we’re using to develop the prototype and validate our idea. We each pitched in our own monies as a part of the initial seed fund. Throughout this evolution one thing we learned was that, what we thought would work was different from what our customers told us. The initial platform was a crude, working prototype that had enough functionality to show to those who understood the need for such a platform that provided web-based mentoring to professionals. You may compare this somewhat to Chester Carlson’s first copying-machine prototype that he shopped around to get investors’ interest.
Because there is nothing of this type available in scope and functionality as we have envisioned to provide professional mentoring on the web, those who saw the merit of this idea almost immediately signed-up and started using it even in that crude a state. During the first year of its existence this prototype went through constant evolution as we learned more about how committed users really benefit from this platform and what works and what does not. We used this learning almost every day to make improvements to the platform, including to our business model to take it to the next level. This process has been quite exciting!
Now we are at a stage where we need a substantial investor. So, we started pitching our venture to VCs, both here in the Valley and outside. So far we have pitched our venture to about half a dozen VCs, and were quite surprised to find the same theme from across all our presentations. Don’t get me wrong! These presentations were very useful to us in learning about what investors look for and how they saw this venture in the scheme of the social networking space that is emerging so furiously today on the heels of Facebook. So, contrary to what most early ventures experience, we did not get thrown out from any of these meetings, despite our gray hair. This may partially be because each one of us is a known and seasoned professional in our own field. We know most of the VCs socially and from other avenues.
Despite telling us how great our idea was and agreeing with us about its commercial potential, we were stumped when almost everyone asked us what our “plan-B” was after we presented our business model and our financial projections, based on our experience so far.
Frankly, we do not have a plan B! At least not in the sense that their question was implied.
The three of us and those who have signed up on our emerging platform are so convinced that this is the right idea and that its time has come that we do not have any doubt about the idea to succeed. It may not succeed in the form that it exists today, or even in the form that it will evolve next month, but the basic premise that it addresses—people’s primordial need to grow personally and professionally from the wisdom of others—that it does not need explaining. We may need Plan-B and I am not advocating its complete dismissal. But, for now, we plan on staying the course and making our original idea work!
What business model will best serve the different communities we plan to serve on this platform will evolve, based on the value we create for each user constituency and how they choose to engage on it. No one knows that now, but this is how a new idea becomes viable through trial and error and through the commitment of those on both sides of this offering to make it work. Sometimes during this tense and tough question—this was a showstopper in each case—that prompted us to concoct a frivolous, irreverent answer—to ourselves, of course—such as, if this does not work, we’ll build steam locomotives or vacuum tubes!
This experience is helping us understand how the lemming-like investors think about a venture, and, how, many of them fall into the same trap of following a hackneyed idea that sometimes has no place in a committed entrepreneur’s mind! Once a venture idea is crystallized in the minds of its pioneers, and once the response from its real customers validates that idea, they stop at nothing to make that idea work: change business models, change functionality, change offerings, their implementation, and change whatever, to make the basic idea practicable, and work relentlessly to serve the needs of its constituencies by continuously listening to them.
So, here is my learning from this most recent experience about having a “Plan B.”
1. If you have an idea for a venture or even for a new career or a job, ask yourself how committed are you to this idea. If you are willing to lose everything you have to bet on this venture then you pass that test.
2. Start slow and learn about how this idea can be made practicable to the early customers through an experimental prototype.
3. Keep refining the prototype at every turn from the users’ inputs and keep them engaged.
4. Keep focused on the growth and learning stemming from your original plan. Constantly keep an open mind to changing how you implement the idea to make it work. This is your original plan, revised to incorporate ongoing learning. This is your plan A. Do not waste time on plan B. Single-mindedness of focus and purpose show faith in the original idea and your ability to make it work.
5. If people ask for a Plan-B tell them that you will come up with one if there was one needed. Ask THEM what it might look like, based on their own perspective!
6. Have a small, dedicated team of creative people who are smart and highly learning enabled (learning disabilities can be fatal in a nascent venture).
7. Be willing to also learn how to speak the investors’ language, but stay firm on your basic idea of why you started your venture in the first place. Do not be detracted by questions such as, What is your Plan-B. This can also signal that they are NOT getting your original plan.
8. Get an agreement with those in your family that you are going to pursue your venture until it succeeds or until you can no longer support it. Your Plan-B to your family should be that you will figure some other way to support them and beyond that do not spend too much time on that plan until the time when you must.
9. Stay away from people who promise you things and who do not come through.
10. Keep complete faith in your idea and ideals: Single-mindedness of purpose has its own rewards!
At this stage of our venture we frankly do not know if we can make this work. Yet, what we do know is that each one of us has supreme faith in its promise and in each other to do what is right for this venture. The rest, we leave it to the Unknown!
Good luck to you in YOURs!
Ravishankar
Great article, Dilip. Most people think Plan B is a Plan of Safety or a Fall Back plan. That is not always the case. There is another Plan B which you trigger almost instantly from your past experience, when Plan A looks like it may not work. Let me give two scenarios to illustrate both these types of Plan Bs:
Scenario 1: I am a sales executive, competing to close a large customer deal. Plan B would consist of additional incentives to offer the customer in case my original terms are not favorable enough. I know going into my sales meeting what my Plan B consists of. I just have to pull them out when needed. Buying insurance is another example for this type of Plan B. You gotta have Plan B’s in these types of scenarios.
Scenario 2: I have a plane to catch at 3 PM. I leave home at Noon and soon find that the freeway is like a parking lot. Traffic is crawling and there is no way I can reach the airport on time. That is when I pull out Plan B where I pick a set of city roads and alternate freeways to reach my destination on time. When I left home, this Plan B didn’t exist. It was there, sub-consciously, from previous knowledge of routes, traffic patterns etc. It had to be pulled because Plan A showed signs of failure. Similarly, getting on the plane to reach your destination is Plan A. Only when the pilot warns that turbulence is bad and that he or she is having to land in a different airport, is when you will need to come up with a Plan B. Here too, Plan B didn’t exist when I boarded the plane.
So, your article is right on. Plan B is not always a Fall Back Plan. If you are an entrepreneur and someone asks what your Plan B is, you can confidently say ‘My Plan A still rocks.’ Like you said above, unless one is 100% focused on A PLAN, having alternate plans can be distracting and lead to complacency.