I wrote this post last year about the first strategic mistake you can make, which is writing a business plan when starting a new business.
Have a look at Alexander Osterwalder’s argument here. He makes three points, and I’ve added my additional thoughts.
- Wasting Time: And increasing your confirmation bias. You will begin to listen to data that only supports your written business plan, not gathering customer insight.
- Locked In: And you spend a lot of time un-selling your stakeholders possibly causing them to question their confidence in you. Un-selling is time-consuming, internally focused and takes time away from customer development.
- Premature Scaling: And if you are VC backed it may lead to dilution of founder ownership. Scaling too early is “eating your seed corn”, consuming cash, and then you will need to go back to your investors for more cash because you started to execute on your guesses, not facts.
Using the Osterwalder Canvas or the Ash Maurya Lean Canvas and associated methodologies is one way to avoid this strategic mistake.