Wednesday, January 9, 2013

New venture creation is non linear

I've been spending a lot of time revising and tweaking the syllabus for an entrepreneurship course I am teaching this Spring (2013).  It's an MBA course, and students will be working to build their own new ventures and also to help an established company evaluate a new growth strategy.

As I put together the syllabus, review the readings and think about the way we try to teach an orderly, linear process of building a business, I continue to go back to the fact that building a business is non linear.  That's why there is so much press and innovation today in the new business creation process.  There seems to be a bit of a rebellion against long, detailed business plans with the traditional hockey stick financial forecasts.  Books like Lean Startup and Burn Your Business Plan are two examples of alternative approaches to new business building that are extremely popular.  The protests and movement toward creation of something new is important.  However, that doesn't mean that all the components of the traditional business planning process should be thrown out; they just need to be understood with a different lens, and it's the non-linear approach.

New venture creation and growth is messy; you start with an idea, you shop the idea; you develop new products, you fail, you start again, and then sometimes you win -temporarily.  Then you go back to the drawing board and change your idea.  You find new people to talk with you; you teach each other; you learn from each other, and again, you go back and revise the original idea.

We're using story boards in our class, and I find this a very useful tool in living the non-linear nature of the business creation process.  However, I think the next new thing has to be a story board on a piece of paper that's a circle vs. a square.  Why?  The square nature of the paper makes the story board feel like a monopoly game, that there's a right way to go around and win.  There isn't. You have to hit certain goals (e.g. cash flow, design structure of the business, etc.), but how you do it, when you do, etc. all vary.

If I could do the teaching perfectly -every business idea would have its own customized syllabus to go with it. They would proceed around the start-up venture circle differently .. all from the center but taking different paths to reach their temporary "nirvana" and then keep moving around with the rhythm of their business.

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