Throw Away Your Business Plan
Mental Models For Startups #6
Today let’s talk about why big projects fail and small projects become giants.
Starting a new project is always hard. There are so many decisions to make, so many variables to define, so many questions to answer. It is hard to even find where to start.
A good piece of advice would be to start writing a plan. A good plan will help answer as many questions as possible from the very beginning.
Planning helps with giving structure and guiding the thinking process.
The problem is that planning is a learnable skill, and it takes years of mastery to get good at it.
And if your goal at the moment is to focus on the project — you probably just don’t have the time to pump up your planning skill.
“It always takes longer than you expect, even when you take into account Hofstadter's Law.”
— Hofstadter's Law
All of us are terrible at planning, let’s try to understand why, so that we can become a bit less terrible.
There is a whole bouquet of brain errors that contribute to the Planning Fallacy, here are a few:
Optimism bias: choosing only the “happy path” when estimating options
Wishful thinking: or Motivated Reasoning
Hasty generalization: making assumptions based on little evidence
Even if you try to eliminate as many fallacies as possible, there is another important aspect that plays a critical role in the Planning Fallacy.
Let’s simply call it: Underestimating Complexity.
The first step of any project is to grossly underestimate its complexity and difficulty.
When planning, we have to imagine various chains of future events and then identify what factors we should take into account to maximize the chances of success.
Naturally, our brains are wired to avoid ambiguity. The human brain is a future prediction machine, it is constantly making predictions.
But, for all its wonders, the brain has a pretty limited capacity of the short-term memory.
“Most adults can store between 5 and 9 items in their short-term memory. This idea was put forward by Miller (1956) and he called it the magic number 7. He thought that short term memory could hold 7 (plus or minus 2 items).”
— Dr. Saul Mcleod, Simply Psychology: Short Term Memory
This is the main reason why we can never keep the whole plan in the head.
This is why we have to offload our memory and thoughts onto an external medium — paper or a computer.
But even if writing things down helps dealing with complexity — there are still going to be many gaps in the thinking process arising from our inability to process more than a few variables at once.
Some gaps will be automatically “filled in” by assumptions or guesses.
Other gaps wouldn’t even be taken into account in the plan — the Unknown Unknowns, the bottom of the iceberg — the problems that haven’t been identified during planning because of lack of information.
Assumptions and missing information aside, when there are hundreds or even thousands of different variables that factor in, it is just impossible to enumerate all possible versions of how they play out together and what version of the future is most probable.
In other words, the complexity of almost any substantially meaningful plan is so high that it is impossible to take into account everything all at once.
Writing a plan is a great way to structure your thoughts, but implementing the very first initial plan most likely would be a terrible idea.
“I can’t tell you how many startups try to begin by “boiling the ocean” — that is, trying to do everything they can because they can. It’s almost always a mistake, of course.”
There is a much better approach to complex things which makes the complexity much more manageable.
Instead of trying to cram as much as possible in the very beginning, it is better to spread the complexity over time.
“The secret of getting ahead is getting started. The secret of getting started is breaking your complex, overwhelming tasks into small manageable tasks, and then starting on the first one.”
— Mark Twain (allegedly)
This way, you can cultivate your project in small steps, answering a few questions every day, adding a few new variables and removing the old ones that are not relevant anymore.
This makes it possible to consider just a few variables at a time, which makes the complexity pretty manageable. Thus, you can make sure every step is based on real facts and evidence.
Compared to executing a plan based on assumptions — taking every next step based on the previous one that already works, would create a solid foundation grounded in reality.
Instead of drawing a map of the new territory before the journey, you’d be drawing it step-by-step while exploring and learning at the same time.
After continuing on this path long enough time, it is possible to create and manage extremely complex entities.
For example, if you’re building a product, instead of trying to plan, design and build it all at once, you’d rather start with a small and simple version (MVP).
The smaller the scope of your first verion — the sooner you launch your product — the easier it would become to execute based on user feedback. You will learn real facts much faster and you’ll waste less time building based on assumptions.
You will be able to draw a more preciese and more complex map, compared to what you could have made before you started.
“I think it’s because we know from our past experiences that big things start small. The biggest oak starts from an acorn and if you want to do anything new, you’ve got to be willing to let that acorn grow into a little sapling and then finally into a small tree and maybe one day it will be a big business on its own.”
With that in mind, there is one very important caveat.
Venturing into an unknown territory you need to know exactly where you’re going.
You need to define your end goals, your final destination and then make sure you stick to it.
Even when drawing the map on the go — take a compass with you, so that you can always correct the course and make sure you’re moving in the right direction.
Start small and keep going. Great things are achieved by moving towards your goal over a long period of time.
Onward.