On November 23rd 2006 Andrew Mason scribbled a diagram on a paper napkin.
It was a plan for how his business, The Point, was going to make money.
Ordinarily, people used The Point to organise around some sort of cause that might make the world a better place.
But in this case, a group of users decided their cause should be saving money. Their plan was to round up 20 or so people who all wanted to buy the same product and see if they could get a group discount.
Groupon — a side project launched out of desperation by a team of do-gooders who professed no real desire to make big bags of money — was born.
Yesterday Groupon was valued at $2.9 billion.
A paper napkin to a $2.9 billion company is quite a ride.
One of the most searched terms related to business is ‘business plan template’.
Having a plan is valuable and it gives you focus.
But most ‘business plans’ could be renamed to ‘business hopes’.
It’s a collection of things that the business hopes come true and bears no reflection on reality.
Those 5 year projections only exist to make the bank manager feel better.
I have dozens of spreadsheets projecting monthly revenue and sales from my previous business efforts. If I copied and pasted the formulas long enough and scrolled to the right then I would feel really good about my business.
The problem is not one of them ever came true.
Now I have one spreadsheet.
It tracks what happened yesterday to show what will happen tomorrow.
How many leads, how many sales and net cashflow.
I know exactly what happens when I feed $1 in one side and how many $ it will generate on the other.
When resources to deliver are exhausted I go and get more.
I don’t have a business plan, I have a business system.
If you’ve got a spreadsheet that isn’t bearing any resemblance to reality lets talk about giving you a system: