← Back

Our Stanford colleagues Perry Klebahn and Jeremy Utley made the “add nothing unnecessary” philosophy a cornerstone of their ten-week LaunchPad class. As we said in chapter 3, more than a hundred companies have been founded by LaunchPad students since 2010, and more than 50 percent are still alive in some form. Perry says each founding team is taught to experiment with one or a few narrow prototypes at a time and to assume they won’t be able to predict which offerings customers will want. That means most teams will need to keep abandoning and changing offerings before creating an offering that customers want and will pay for—and will generate enough revenue over the long haul to build a company. As a result, Perry and Jeremy teach students not to take or to delay, many steps that other entrepreneurial classes and investors preach as essential for starting a company. For example, many start-up experts recommend writing a detailed business plan to help founders flesh out and explain their product or service, financial model, target market, and backgrounds. Perry and Jeremy do teach students to keep iterating a three-to-five-minute pitch, because potential investors, employees, and customers will want to know what your company does. Perry and Jeremy also coach strategic inaction, because they believe that writing a detailed business plan is useless or worse. That’s because the company’s offering (and target customers) will almost certainly keep changing. Founders who work hard on writing a perfect plan, Perry and Jeremy argue, waste time that is better spent prototyping, iterating, and learning. And—since labor leads to love—all that effort can cause founders to become irrationally attached to bad early ideas. Perry and Jeremy aren’t alone in their dim view of business plans. A study of seven hundred start-ups led by David Kirsch of the University of Maryland found no relationship between the quality of business plans and whether start-ups received venture-capital funding. Carl Schramm, economist and author of Burn the Business Plan, argues that Amazon, Apple, Facebook, and Microsoft never had business plans, and “empirically, it appears as if you don’t need a business plan.” In short, before you heap some burden on people and eventually figure out that it wastes their time (or worse), slow down and ask, “Suppose we did nothing?