Entrepreneurs face unequal challenges even before getting in an investor's door. Data illustrates disparities in the social innovation sector.
Entrepreneurs: You’re More Important Than Your Business Plan
Image: African Leadership Academy, 2006 Echoing Green Fellows.
“Would you take a look at my business plan?”
Some member of our staff at Echoing Green, an angel investor and grantmaker in social enterprise, hears this request every week. And we are often happy to review these start-up plans – which include the typical elements such as a product description, competitive analysis, estimate of market size, and projected financials. But we are interested in much more than these traditional plans. We use other criteria to find new people and ideas that can create large-scale social change.
In short, the business plan is overrated.
Like the vast majority of start-ups, most new social enterprises are bootstrapping efforts. As Amar Bhide said in “Bootstrap Finance: The Art of Start-ups” (a 20-year-old HBR article that is an uncanny precursor to today’s “lean startup” meme), traditional business planning processes are less relevant to bootstrappers – where resilience trumps planning and energy trumps experience.
Applying a formal spreadsheet-type analysis to an early stage concept can be “disastrous.” Instead, we look at eight broad rules for success, half of which are about the nature of the entrepreneur herself (not her business plan). These are lessons we’ve learned from investing $30 million over the last 25 years in 500+ social start-ups about what make a promising social entrepreneur, but they are equally applicable to any entrepreneur...
Continue reading You're More Important Than Your Business Plan on Harvard Business Review, and then check the 2013 Echoing Green and Black Male Achievement Fellowship Semi-Finalists, to be announced later today.
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Echoing Green focuses on finding stellar individuals who can carry their ideas and explain why they have what it takes to succeed.