Source: The Ladue News Review: Getting to Plan B
Date: Thursday, January 21, 2010 11:08 PM CST
Plan B is a place no one wants to go. In our society, a Plan B isn’t synonymous with success. Even its name comes off as the also-ran, the ‘next best’ thing or the back-up when all else fails. But the truth is, many Plan B’s are better than their alpha predecessors. The smart executive makes sure they are as well-researched and as well-grounded in reality as any of the other plans before them. And as authors John Mullins and Randy Komisar note in their latest bestseller, Getting to Plan B, those ‘also-rans’ could be your answer to beating the odds to succeed.
To prove their point, Mullins and Komisar load their narrative with examples of successes snatched from the jaws of defeat. To find one of the most striking Cinderella stories, you need to go to Google. No, I don’t mean its search engine. Look into its business plan. Google’s original plan was purely academic, with two students at Stanford trying to find a better way of finding information. They did, and by invitation or word-of-mouth, a following was born. But as the demand for Google grew, so did the need for money to maintain its infrastructure. Creators Sergey Brin and Larry Page found themselves in need of revenue.
Brin and Page considered advertising ‘evil,’ so the several Plan Bs that followed focused on investments and licensing. The results were marginal at best, so Google set out to find a better method that wouldn’t fly in the face of their mantra to provide information to all, not just those who can afford it. The answer was paid listings (well separated from Google’s organic searches), and then a cost-per-click model. To this day, no ads are displayed on Google’s home page.
Throughout its evolution, Google’s executives continually identified ‘leaps of faith’ they were making along the way through each of their new plans for revenue. The reality is that left unguarded, these untested questions (which many businesses bank on) can easily sink a company into failure. But, according to the authors, Google survived by recognizing them and seeing how they related to the five elements that determine a business model’s viability: revenue, gross margin, operating, working capital and investment models.
As the economy continues its limp out of the recession, more enterprising entrepreneurs will be forced into the world of the self-employed or to take matters into their own hands and start their own business. For these, the lessons of Getting to Plan B are invaluable. This is our year to embrace new ideas, to be bold enough to innovate and challenge conventional wisdom. We are all entrepreneurs looking for the next best thing, whether it is a new product or a better way to do things. All require a solid business plan that is data-driven, strategic, well thought-out and crafted from the lessons learned from other peoples’ mistakes. By heeding the insight in this book, our second plan or backup may turn out to be the best plan of all.