According to conventional wisdom, the first thing every business founder must do is create a business plan – a static document that describes an opportunity, its size and the problem the business can solve. The typical business plan is essentially a research exercise written at a desk before the potential business owner has even begun to build the product or service. The idea is to predict most of the unknowns of the business before putting actual investment money and other resources in it.

Incidentally, it is only after investing tremendous amount of resources into building and launching the product or service, after months, sometimes even years, of development that true learning comes on the venture. Sometimes the learning comes the hard way. As the boxer Mike Tyson once said about pre-fight strategies, “Everybody has a plan until they get punched in the mouth.” That’s why successful new businesses are those that keep iterating, adapting from one problem to another very quickly, improving as they continually learn.

Only well established business executes a model; a new venture keeps looking for one.

            Reference: Harvard Business Review, May 2013