Our cover story this edition is based on the book ‘Getting to Plan B: Breaking Through to a Better Business Model’. The book is authored by John Mullins, Professor of management practice at London Business School and Randy Komisar, partner at venture capital firm Kleiner Perkins Caufield & Byers. Prior to working on the cover story, I asked Mullins, why this book? And why now? Here is his response:
“We have read countless business books and articles on the startup process. We were both frustrated by an apparent failure to tell innovators the hard fact – most Plan As fail. Period. Sure, there are examples of success out there, but we have a front row seat that exposes how many failures there are for each individual success. Getting to Plan B turns the process on its head. We start with the premise that getting to Plan A is not the answer. A business plan, no matter how well drafted, will not set a credible course without firsthand experience. Instead, we start with the premise that Getting to Plan B is the quest (and Plans C, D…, Z – you will see it never really ends, and that is a good thing!). From that perspective, we realised that the process of developing a successful, profitable, and sustainable business model needed a wholesale reinvention: one where the approach is fast, flexible, and self-correcting, and one where the conventional line items of the classic business plan evolve from experience rather than a thousand guesses. More than ever, as we reinvent our economy out of the worst recession since the Great Depression, these principles offer the possibility of greater innovative success with fewer wasted assets. Our hope is that people find the courage of their convictions in this book, and see that where there is a will there is also a ‘new way’ to achieve it.”
Mullins’ response was plain and simple. In most entrepreneurial ventures, the initial plan (Plan A) fails to take off. But by carefully observing the market and measuring the key metrics for your business, it is possible to take corrective action and graduate, in Mullins’ terminology, to a Plan B. The best aspect of the book is how the authors suggest a ‘process-driven’ approach to manoeuvring a startup. They urge an entrepreneur to gather data and ideas from other companies that are worth mimicking and then improve upon those ideas. For other assumptions based on gut-feel, they suggest a dashboarding process, a methodical approach to gathering evidence from the market (customers) based on your own experiments.
While the book presents numerous case studies – of both successes and failures – we thought we could add to the list, some Indian startups that graduated from a Plan A to Plan B. In this second anniversary special, we present to you the stories of seven venture capital-funded companies that revamped their business model by carefully observing the market and eventually arriving at a plan that works.
Finally, I’d like to acknowledge several venture capital investors who helped me identify these seven companies. I sincerely thank Mahesh Murthy of Seedfund, Prashanth Prakash of Accel India, Rama Bethmangalkar and Vishesh Rajaram of Ventureast, and Anup Gupta of Nexus Venture Partners.
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