Denver entrepreneur and entrepreneurship leader John Wren says in his blog that I told him I didn’t have a business plan. That’s not true at all, and important enough to respond in this blog. He’s falling into the common trap of confusing planning and the plan; and he’s not going to get me down there with him.
Here’s what he says on his blog, supposedly narrating a telephone conversation:
I asked him if he had done formal market research and if he created a written business plan before he’d started his business. “No” he said, and I like to think that is part of what got him thinking about what has resulted in this new book.
John apparently likes to exaggerate. We haven’t actually talked on the phone, I think not ever, but at the very least not for years. I think he’s misquoting from a blog comment. Still, it’s a useful distinction, because in fact as I developed Palo Alto Software in the late 1980s I worked a business plan for years, revised it every month, and even created the full formal business plan several times along the way. The first time was when I needed to get a merchant account with the credit card company, so I could take credit card sales from customers, which would have been in 1987. Then again in 1993 when I moved the company from Palo Alto to Eugene and needed new banking relationships, and once again in 1999 when we took in venture capital partners.
I think what confused John was that I didn’t always do formal market research every time I revised my plan. Often I dealt from the strength of talking to my customers every day. The formal research would come once every year or so, and then became regular as the company grew, when we started formally managing the information our registered customers would share with us.
I also think he’s trying to be contentious, which, I suppose, is okay in the context of blogging. For example, he also says, about me:
I say it’s surprising because it [he’s referring to my new book, The Plan-As-You-Go Business Plan] is in part an apology for much of the work he’s done over the last decade or so in being part of the “you must write a business plan” choir.
And there again, that’s an obvious confusion between the plan and planning. I’ve always said that every business deserves to give itself the benefit of business planning, which is a matter of focus, setting goals, establishing priorities, and tracking the steps to achieve the goals, plus a lot of other concrete specific elements. And that’s what the new book says too. I have changed emphasis, however, which is what John missed — because I worry that people don’t do the planning because they fear how much time and effort it will take to do the big formal plan.