What is this?
There are certainly key assumptions in your business plan that will only reveal themselves when you actually start to implement the venture. If you know what your uncertainties/assumptions are, you should also be able to formulate a number of milestones you whish to reach at certain points in time. What will happen when you reach the set milestone? What if you don't? Randy Komisar calls these key assumptions "leaps of faith" that need to be tested early on. Reid Hoffman, co-founder and CEO of LinkedIn, calls some of these assumptions failure points that need testing. Check out the following video's to learn about leaps of faith and failure points.
Leaps of faith
As you remeber from business model prototyping, analogs are companies you associate with in terms of the processes they went through, you can learn from them in a good way. Antilogs, on the other hand, are companies whose process you don't want to associate with, you can learn from them by not ending up like them. Knowing both your analogs and you antilogs will help you set course. The questions you can't answer by observing other companies are called leaps of faith. All leaps of faith you have to take should be mapped out and tested as early as possible.
- Watch Randy Komisar, a co-author of the book Plan B, explain the entire concept in this movie on Stanford's entrepreurship corner.
On Failure points
According to Hoffman, getting to failure points and measuring them as early as possible is one of the of the most fundamental principles of entrepreneurship.
- Watch Hoffman explain his ideas in this video on Stanford's entrepreurship corner.
Weave a MAT and outline your priorities
Use milestones, assumptions and tasks, to create a system to keep your business going. Milestones enhance the value of your company. Assumptions define your business model and require testing. Tasks will test assumptions and help you reach milestones.
- Guy Kawasaki explains the concept in this movie of Stanford's entrepreneurship corner.
Assumption based planning
Assumption based planning means having assumptions on multiple "what if" scenarios. Considering that the future of startups is generally highly uncertain, and that they have no past experiences to extrapolate, assumption based planning is useful for them.
- More info on assumption based planning in this wikipedia article, however, don't get tangled up in the article's complexity, its a simple concept really.
Want to know more?
- "Discovery driven planning" by McGrath, R. G. & MacMillan.
- Getting to plan B, breaking through a better business model is a book by John Mullins & Randy Komisar on good reasons for not sticking to your original business plan (2009).