If you want to get your students’ attention, tell them…

“Business plans suck!”

By the time they get to your class, your students will likely have heard that business plans are key to entrepreneurial success.

This exercise will use a game to help your students see why business plans have fallen out of favor, and what data-driven entrepreneurs do instead.

When to Use this Exercise

The Why Business Plans Suck: The Game exercise is best used as a way to introduce the:

1. Business Model Canvas and/or
2. Minimum Viable Products (MVPs)

So consider running this either at the beginning of your course when you’re introducing the canvas, or toward the end of your course when you’re introducing MVPs.

The Game

Step 1: Students Play Innovator’s Plinko

You start the lesson with each student playing Innovation Plinko, courtesy of the amazing team at Kromatic!

As students drop each of their Plinko chips, each of which represents a new business idea, they quickly realize that:

Most new business ideas fail.

Step 2: Introduce Experimentation

With that context, students discover what’s needed is a way to “test” each idea to determine which ones are most likely to pay off:

As students play this game they discover that…

The earlier they test their business ideas, the better their outcome.

Step 3: Tinder is Testing (for Dating)

While most students have no prior entrepreneurial experience, virtually all of them have dating experience. That’s helpful because Tinder is a great metaphor:

Entrepreneurs are “searching” for business models like single people are “searching” for partners.

Tools like Tinder help you weed out bad relationship matches quickly:

Unfortunately, Business Plans don’t encourage students to “swipe” through bad ideas like Tinder does. Which is exactly…

Step 4: Why Business Plans Fail

Writing traditional business plans are like writing fairy tales: it’s fun and they always have a happy ending, but they’re divorced from reality.

Any potential benefits from the “planning” process are dwarfed by the fact that:

Business plans encourage you to fall in love with a fantasy.

Business plans take a significant amount of time to write. Google can’t answer the real questions of market size, sales channels, or value proposition.

Only customers know the answers to those questions.

The more time spent theorizing and “planning” a business, the less time learning what customers’ real needs are, and the best way to address them.

Step 5: A Better Way

Here re-introduce that Tinder analogy. Let students know there is a Tinder for entrepreneurship, a more efficient way to find a lasting business model. When looking for a business model in which we want to invest our time, energy, and money, we only want to find the best fit for an idea. We want to treat looking for a business model like we treat looking for a significant other.

Instead of thinking of business ideas as looking for “the one”, we should look at it more like dating. On Tinder, a person is not looking at every single profile thinking “this could be the one!” Instead, what people do is look for red flags on every single profile, and for the vast majority of profiles, people will swipe left because they sense some sort of red flag indicating that person isn’t “the one”. 

Make the point that when looking for ideas and business models, what we are looking for are red flags and reasons not to pursue it; we are not looking to get married to every business idea we think of.  

Just like in dating, with our ideas, we want to test the waters. We look at someone’s profile, and if it looks good, we send a message. If they do something that raises a red flag (sending graphic photos or using offensive language), we stop.

The same thing goes with working on ideas and business models. We want to test the waters as soon as possible, and immediately stop as soon as we sense red flags, then modify things or somehow pivot.

The idea to drill home with students is to save their time and energy and money for the best of the best! The faster we can eliminate the bad ideas, the sooner we can find the good ones, so we want to stop and assess ideas as soon and as often as possible.

Business Models Are a Better Alternative

Explain to students that instead of working on business plans, they want to approach ideas and business models as experiments. In this approach, they have the opportunity to stop pursuing any idea at any given time if they sense a red flag, whether it’s at the very beginning, or further along. Show students a Business Model Canvas and explain that we use this tool instead of a business plan because it allows us to quickly hypothesize and experiment with our ideas and our business model.

This tool lets us quickly write up all the potential red flags we are worried about and want to test in our business model and allows us to make a small investment in one element at a time (like sending a quick message on Tinder to see if the person responds appropriately).  

The Full Lesson Plan

If you’re looking for a way to engage students while you introduce:

• Business Model Canvas and
• Minimum Viable Products

…or you just want to play Entrepreneurial Plinko…