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Part I: Validate Your Business Model Start With a Business Model, Not a Business Plan - The Accelerators - WSJ

Posted on by Brandon Klein

STEVE BLANK: Last week I was catching up with Todd, an ex-graduate student. He and his co-founder were both PhD’s in applied math who believe they can make some serious inroads on big data problems. Over coffee he said, “I think my startup is going to fail even before I get funded. After we graduated we took my great idea based on my thesis, holed up in my apartment and spent months researching and writing a business plan. We even entered it in the business plan competition. When were done we got out of the building and started talking to potential users and customers.”

Ok, I said, “What’s the problem?” Todd replied, “Well the customers are not acting like we predicted in our plan! There must be something really wrong with our business. We thought we’d take our plan and go get customers. We can’t raise money knowing our plan is wrong.”

I said, “Congratulations Todd, you’re not failing, you just took a four month detour.”

Here’s why....