To date, I’ve had about a handful of entrepreneurial activities. Looking back, I realized something: You can’t plan a business. I know that sounds pretty counter-intuitive, but I’ll be honest, the more I think about it, the more it makes sense. At least for me.
Don’t believe me? Alright, well, let’s take a walk down memory lane and let’s survey the land to see what happened. NOTE: I’ve had way more ideas than this, but these are the ones that I put more than a few days or weeks into.
Idea #1 – Restaurant Paging/Seating Software
I wrote a fat business plan. I did market analysis. I had a team in place and a product being built. Then I had a personal incident happen that left a bad taste in my mouth on the idea. Regardless though, I spent a few years on the idea and nothing happened. I had a great plan, but never had a product, not even a beta product. I almost became the software arm of one of my would-be competitors, though that fell through at the last-minute because they didn’t understand software.
Takeaway: You can have a great product idea, business plan and market analysis yet still not go to market with a product. In which case, what was the point of all the planning?
Idea #2 – Conference Company
http://360conferences.com was hatched and given birth to with John Wilker. This idea was executed exactly the opposite of idea #1. We had no business plan, no market analysis and had a product launch 4 months after the idea hatched. The business is still around and growing. I sold out my half to John in May of last year. We didn’t know where we’d find our customers (attendees), partners (sponsors) or the team to actually run the show (us). In other words, we didn’t have a business, we had an idea. It wasn’t until after a few product iterations (i.e. a few 360|Flex conferences) that we had a plan of attack (vs a biz plan) and had figured out how to actually put on a profitable conference.
We showed up to do the business and the community (our customers) showed up to help us. One community member in particular was Ted Patrick. He singlehandedly was our marketing and PR firm for our product launch. Granted, he was an evangelist for the technology we were highlighting, so he had his own motives. Regardless though, without him, we might’ve had a party in which very few people showed up. Instead, thanks to his help, we sold out 400 seats.
Takeaway: An idea executed on delivers more than a whole lotta planning. Once the process of building something is in motion, it attracts like-minded people who will also try to help it succeed.
Idea #3: Gaming Company
http://area-161.com is my latest big idea. Though honestly, it’s probably my oldest idea. I’ve known that I would make this company since the 6th grade, i.e. 1986. Roughly, 3 years before I met the co-founder in 1989, our freshman year in high school. Now mind you, neither of us realized he was the cofounder until the spring of 2010. Life is funny that way.
I spent about 24 years planning for what would become Area-161. I learned programming. I learned art. I learned writing. I read tons of business books. I analyzed every business I ever worked with or for. I even ran another business though that was a fluke (see the Idea #2 above).
One reason I couldn’t start the business was because my wife didn’t like video games, so much so that they were banned for a good part of our marriage. It would be hard to start a company building a product that wouldn’t be allowed into your home. Finally, she came to her senses and that got the wheels rolling again.
It wasn’t until I “showed up” that things starting falling into place. Once I decided I wanted to make a game company, I found myself literally next to Smiley. I don’t mean I moved into a house next to him, I mean I was sleeping in a room next to his in his home! My family lived in Arizona, while Smiley lived in Washington, down the street from a contract gig I had landed. We got to talking while I was staying at his place and the company was formed.
Once we came up with an idea, “Darts”, other things fell into place. We realized we needed an art department. Luckily, my dad retired from being a graphic artist for most of his life. Whammo, we signed him up. My dad made it clear though, “I don’t want to do the animations.” Then his best friend got in contact with him by chance. Lo and behold, he tells my dad, “I’ve been thinking about getting back into animation.” Bam, we have an animator now. The art department is done!
Now we need the sound and music department. I don’t have any doubt, they’ll come out of the woodwork ONLY IF we “show up” though.
You can read Smiley’s take on “showing up” over at the Area-161 blog.
Takeaway: You can plan for 24 years and have nothing to show for it, except you and your plan for a great company. Or you can “just show up” and within 1 year, have a team and a playable beta product in the works.
Idea #4: software to help remote teams
http://remotejams.com is an idea I came up with about a month ago. It’s something we’re going to need eventually at Area 161. I thought, “Well, we need startup capital to build the company we really want, so let’s build this and use any profits to fund the business.” Again, I was falling back on what I had done for 24 years: planning.
Rather than “show up and build a product”, let me instead “plan and prepare to really start the business in the future while working on this other business idea right now.” I know, it sounds pretty stupid in hindsight. However, I really believed it and had others believing it with me.
I’m not going to give up on Remote Jams, but like Apple TV, it’s gonna be a hobby vs a focus. I had plans of making it an open source thing and getting all these people involved, but that would actually take time and effort that would be better focused on Area 161. Therefore, I’ll likely take a more private and slow development approach to this. As we get more programmers at Area 161 (after delivering products and generating profits), maybe I’ll be able to start the project up more formally.
Takeaway: If you’re planning to start a new company with a new product, so you can plan some more on an old company idea, it’s probably not a smart thing to do. If you’re delaying products on your old company, so you can launch a new company’s product to generate money so you can go back and finish creating that product you put on hold so you could do this other….yeah, you get the idea. 🙂
Do Now, Plan Later
I’m not saying you can’t put thought into your business, whether it be the products or the company DNA. I’m not saying that at all. What I’m saying is that you need to start building a product and acting like a company as soon as possible. If there’s a spark of an idea and it’s workable, then work with it. Don’t say, “I have this idea, but before I launch it, I need to spend x many months (or years) prepping to make sure I do it right.” If you do it wrong, you can recover and try again. If you never get started, then you really had nothing to begin with.
Tom's Blog 
Your wife banned video games and you’re still married. Wow, you must really love your wife. I’m not sure I could love anyone that much. 🙂
I agree with your business philosophy. It reminds me of a lesson that the German army learned in WWI. They planned the invasion of France for decades. And when it came time to execute they did so with precision. They planned down to such a level of detail that they even had boot repair shops mounted on horse drawn wagons moving with the troops as they marched so that a soldier could hop on, get his boots repaired, and then hop off and keep marching without slowing down everyone else.
However, when the first unexpected event happened – the Russian Army mounting an attack in the East before sooner than the Germans expected – the wheels came off. The army stalled. The French dug trenches and mounted machine guns and thus began the long drawn out trench warfare of WWI.
What they didn’t plan for was flexibility. Had they planed to react to the unexpected things may have turned out differently.
I think this is why large corporations often get outflanked by smaller startups. Large corporations have to move ideas through many meetings and approval from various legal departments, accounting departments, marketing departments, etc. But sometimes a startup can change direction in an afternoon. The CEO runs into the room and yells and the whole team is on board. They can also react faster to newly presented opportunities or obstacles.
I guess what I’m trying to say is: There is no try. Do, or do not. -Yoda
Yeah, it was the “Dark Ages” of our marriage. LOL Actually, it was during the time that I worked in Silicon Valley. Therefore, with all my free time, I started up Silvafug (the first Flex User Group) and 360Flex/360Conferences.. I guess it wasn’t all bad news.
What I found interesting though was that she let me wait all night for the PS3 release, under the guise that we would sell it at auction for profit. Then, when it came time to put it up on eBay, she said, “Well, you waited all night for it, you sure you just don’t want to keep it?” It was then that I realized she truly loved me. Though, we did just use it as a Blu-ray player for several months before games were “officially” allowed in the house.
Yeah, I think plans are primarily made for humans, because situations (war, business, life in general) don’t care about your plans one iota. Again, I’m not saying it’s bad to think things through, just don’t get caught up in all this thinking.
John was really good at keeping our grounds in check. We’d be arguing about some possible item in the next show and he’d be, “Well, we don’t know if that will happen, so we don’t need to bother thinking about it.” There was a lot of truth to those words of his.
I think it’s dangerous to look at this as an either/or thing; for one, you have previous experience with developing a business plan, marketing strategy and analysis, etc., which is going to trickle down (even subconsciously) to any other ventures you have (and anyone who tries this without having that past experience and/or a bunch of money given to them will be in for a rude awakening). Two, some businesses are more fluid than others, and a great team will always be the most valuable tool for success. Finally, for every glorified startup that succeeds despite (it’s never due to) their lack of planning and strategy, thousands fail. If you’ve got the money, friends, and sense to start a company, that’s great – but not everybody does, and anyone who goes in without knowing the fundamentals of business and thinks an ‘idea’ will get them by will fail. That being said, you absolutely need to have the flexibility to be able to account for the unforeseen, and seize opportunities whenever you can.
1) Yeah, I can see how some of that trickled down. However, a lot of businesses can be started with very little or no money these days. This gives us the opportunity to to fail and learn vs plan and stall. Plus, you still have a product development cycle. During that time, you can still be thinking about the business and making plans. I’m just saying start making your product right away. Personally, I like to start businesses at night after my day job is over. I find not having to worry about money allows me the freedom to do things as I see fit vs doing things to make money.
2) I think most startups should be fluid. Like Polygeek says in his comments, it’s the old guard that is rigid.
3) You sorta make my point. If planning doesn’t increase your chance for success, why not just do and plan as you go? Vs plan before hand?
Excellent post – interesting to see the retrospective.
I’ll try to dig up this article I read earlier this year – it talked about the difference in the level of planning needed in a start up vs. an older more established company. The article was saying In the start-up entrepreneurial years too much planning turned out to be crippling or wasted effort as a start-up needs to be ultra adaptive and resourceful and make constant tactile decisions in order to survive.
VS. a more established company they need to use planning to carve out their plan, organize resources so that they’re focused on the direction the company wants to go (otherwise it’s a lot of wasted effort of people working on random initiatives, etc…).
I can see that. When you have 100,000 people, a plan would practically be required.