Getting to Plan B

If the founders of Google, PayPal, or Starbucks had stuck to their original business plans, we’d likely never have heard of them. Instead, they made radical changes to their initial models, became household names, and delivered huge returns for investors. How did they get from their Plan A to a business model that worked? Why did they succeed when most new ventures crash and burn?

John Mullins and Randy Komisar argue that the startup process, largely driven by poorly conceived business plans based on untested assumptions, is seriously flawed. But there is a better way to launch new ideas — without wasting years of your time and loads of investors' money.

In Getting to Plan B, Mullins and Komisar present a field-tested process for rigorously stress-testing your initial business idea, and using the evidence you uncover to make swift corrections that tip the business equation in your favor. Focusing on five elements that determine any business model's economic viability — its revenue, gross margin, operating, working capital, and investment models — the authors' approach significantly reduces your risk of failure by:

• Comparing your idea with existing models to steal what works, avoid what doesn't, and add improvements
• Identifying leaps of faith: the as-yet-untested questions you are banking your business on
• Conducting fast, inexpensive, data-driven experiments to support or refute those questions
• Using this data to make smart strategic changes and course correct before it's too late

Through examples from their first hand experience and research in businesses around the world, Mullins and Komisar reveal how companies have used such systematic experimentation to transform their current business into a viable Plan B. Whether launching a new venture in the marketplace or inside your company, Getting to Plan B will help you replace assumptions with evidence — and vastly improve your odds of success.

• Chapter 1: Don't Reinvent the Wheel, Make It Better
  Assembling Analogs, Antilogs, and Leaps of Faith to Get to Plan B
• Chapter 2: Guiding Your Flight Progress
  The Power of Dashboards
• Chapter 3: Air, Food, and Water
  Your Revenue Model
• Chapter 4: Avoiding Rocks and Hard Places
  Your Gross Margin Model
• Chapter 5: Trimming the Fat
  Your Operating Model
• Chapter 6: Cash Is King
  Your Working Capital Model
• Chapter 7: It Takes Money to Make Money
  Your Investment Model
• Chapter 8: Can You Balance a One-Legged Stool?
  Multidimensional Business Models
• Chapter 9: Getting Started on Discovering Your Plan B

It may seem obvious that you need to be flexible and be able to switch business models when the first ones don't work. But the authors manage to make it interesting and make you think extra hard on the subject.

Any book that forces you to think extra hard on a subject that you already believe you understand, is in my view a good book.

Recommended reading.