Randy Komisar, who wrote the bestseller “The Monk and the Riddle,” will be back in bookstores in September with “Getting to Plan B.”
A partner at Kleiner Perkins Caufield & Byers since 2005, Komisar co-authored the book with London Business School Prof. John Mullins.
The basic premise is that most entrepreneurs find success not by clinging to their original business plans, but by tweaking them, or even overhauling them, based on feedback from the marketplace.
Don’t buy it? Well, consider this: When Komisar asked the CEOs at a KP offsite last year how many of them had discarded their original ideas for a Plan B, two-thirds of them raised their hands. And Mullins studied 70 businesses that his students had created over five years and found that more than 60% of the 63 companies that were still active were pursuing different strategies than the students started out with.
I spoke to Komisar about his book for the September issue of Venture Capital Journal. Here are some snippets of our conversation:
Q: Your book seems targeted at entrepreneurs, but will VCs find it useful, too?
A: My goodness, yes. The book is about the innovation process and it is about startups, but one of the most important reasons that I wrote the book was to create a better dialogue between entrepreneurs and institutional investors. I think [VCs] often forget that they are part of innovation process and think about themselves more as governance investors.
The idea here was: How do I create the right language and the right philosophy for entrepreneurs to be able to escape the straight jacket of their business plans and, at the same time, propose an accountable and responsible process to their institutional investors that everybody can feel comfortable with?
Q: One company that comes to mind as moving from Plan A to Plan B is Twitter, which started out as a podcasting company named Odeo.
A: Absolutely. We looked at Odeo and passed. We didn’t believe in that original model. On the other hand, I wish I was working with those entrepreneurs, because they’ve done a great job. It really goes to show that if you invest in a team that is well-versed in the getting-to-Plan-B process, you can feel a lot more comfortable betting on great talent.
Q: What’s wrong with the entrepreneurial process as you see it now?
A: The problem you get with getting to Plan B in the current business model-driven process, is that you don’t begin the process until Plan A has failed. What John Mullins and I are suggesting in this book is a completely different process. Which is to say, it’s not about Plan A. It’s about how we actually move from Plan A with empirical evidence from the marketplace toward the highest potential. How we do that efficiently, how we do that quickly, and we do that with the money and resources at hand.
Q: The premise of your book seems counterintuitive, since so many entrepreneurs start companies based on a “great idea.” How do you convince them that their idea is probably going to morph?
A: It is counterintuitive. It’s getting them to think as a scientist would think. I call this a quasi-scientific method. A good scientist has a strong hypothesis that they need to prove, but they understand the questions that they need to ask and the metrics that are going to determine whether it’s right or wrong. And they are open to the results of that experimentation. I’m asking entrepreneurs to think the same way. I’m asking entrepreneurs not to give up their passion for an idea or concept, but to think about it in a more fluid fashion. You may find with the feedback from the marketplace that you are zigging and zagging a little differently than you might have expected, but fundamentally, hopefully, you’re still solving the same issue.