John Mullins, Randy Komisar, Harvard Business Press, 2009
This very interesting book has the potential to capture the readers’ attention from the very beginning. The book presents thoughtful insights on discovering and developing successful business plans. The authors have made it an interesting reading by lucidly illustrating their points, and several interesting case studies.

Very often the coveted dream of an entrepreneur, the initial idea or the “Plan A” fails to materialise successfully, even if it is backed by survey or focus group results. The authors argue that the process to unearth what the customer will buy requires real life experimentations. Accordingly, the entrepreneur might have to modify his product or approach several times. The less expensive and time consuming this process is, the better. He might eventually click the right solution that will make his “Plan A” attractive to customers.

However, if evidence suggests that the plan is going to fail, it is better to make the transition to a Plan B. Getting through to plan B or successive ones is about discovering, developing an effective business model through continuous evaluation of the assumptions.

The authors suggest four building blocks to develop a business plan; namely-Analogs, Antilogs, Leaps of faith, and Dashboards. A successful idea is one which either addresses someone’s pain or creates customer delight. “Analogs” suggest borrowing from successful predecessors, such idea or part of it. “Antilogs”, on the other hand, is about figuring out how the idea could be used differently and more successfully.

Analogs and Antilogs together provide an idea of what is known. But, to know the unknown, for example, how customers will react an entrepreneur needs a “leap of faith”. He needs to believe that his answer, which is a conclusion of his initial hypotheses/assumptions, is going to work. Experimenting with the hypotheses will show whether the assumptions are right or modifications are required. And, a “Dashboard” provides the systematic, structured and disciplined way to review the progress.

While experimenting with a plan, an entrepreneur must check five key elements of a business Model. These are as follows.

• Revenue Model: This is required to plan the way revenue is going to be generated
• Gross Margin model: This will provide an idea about the amount of revenue that will be left after covering all expenses.
• Operating Model: This plans for expenditures besides the cost of goods and services, which might arise due to sales-supporting activities.
• Working Capital model: This is required to figure out how the working capital would be managed.
• Investment model: This will provide an idea about the amount of investment that one must make before the business reaches its break even.

The authors have discussed each of these models in length in separate chapters, using insightful case studies to elucidate each of them. In the penultimate chapter, the authors stress that it is vital to combine these five models effectively together to grow the venture. The book provides useful guidance for building a business plan, and moving to the next one if need may arise.