I suspect that what is on the mind of pending U of O MBA students, current, and recent graduated is if the education received is relevant and valid.  Well I can say, after the first day of the Cleantech Open Academy, the answer to that question is a resounding YES!

After getting over the awkward start of once again trying to define sustainability within a room of entrepreneurs dedicated to developing sustainable and green products and services, we got off to a shocking start with the announcement that business plans are obsolete!  This of course is not a shock to many of us, who have traveled down the road to entrepreneurship, be it in the Venture Start-up program within the University, or out there on our own.  But for many in the room such a statement seems like heresy.   The dogma out there, when looking to raise money, is that you need a business plan, and I suspect that for many of the competitors in the Cleantech Open, they had the impression that the whole purpose  of this event is to write a winning business plan.

That is not the case for this competition.   What they want from all of us is not a plan, but a solid business.  In the past this competition had focused a great amount of energy in creating a solid business plan, but now they say investors are even not interested in reading them.  Over the next several weeks, with the help of our assigned mentor, we are going to walk through a process that creates a compelling and engaging executive summary, and 10 slide PowerPoint presentation, and 10 worksheets.  This body of work will be what we are judged on later in the Fall.

So with that cat out of the bag, the real work of this Academy got underway.  Randy Komisar, author of the Monk and the Riddle, and Getting to Plan B, launched us into a conversation about the importance of failure as a learning tool, and pointing out that our first customer in not going to be our planned customer (thus the irrelevance of the business plan), thus the need for a plan B.  Not that a plan B is once again something that your “plan” for thus write into your business plan, but have a built in process to test all the assumptions you are making when creating your business model.  And let’s not kid ourselves, new venture planning is all about making assumptions; sometimes stacking assumptions upon assumptions, and this is what makes the business plan irrelevant.

With these plan B strategies in mind, we then headed down the road of customer selection.  The main theme here – “get out of the building.”  It is not unusual for a start-up venture to be founded upon a brilliant idea, dredged deep from the mind of the inventor.  However an idea is rarely robust enough to become a viable business.  There has to be a customer that is hungry for the idea, sees the value of the idea, AND has the ability to pay for the solution.  The best way to evaluate the market validity of your business idea is to show it to potential customers, but to make this a more efficient process, have a clear understanding of the value your idea has to your potential customer.

With face-to-face time with real customers they will tell you if your assumptions about value are real, and if they are not, hopefully they can tell you what they value, and your plan B mentality can kick in.   A formal business plan is too static to capture this important process, thus the need to build in flexibility and a focus on developing a process to form your business model.

So with all this being said, at the end of the day, we still don’t have an exact indication of the contents of those 10 pending worksheets, but if I was to give my best guess, I have a feeling that they will be looking for detailed information about how we know our customer and how we are confident that our product offering is a very profitable match to this customer’s need.  This will be the contents of our Cleantech  “business plan,” and competition aside, this will be a very powerful go-forward strategy.

So all said and done, a business plan will still be created, but we are going to approach its creation in a completely different way.  At the end of the day, the mantra was this: Think Big, Start Small, and Move Fast.  Big ideas brought us here.  Now we have to go out there and find that first viable customer, and waste no time adapting  and learning from them.  This same mantra applies to the U of O MBA studies.  We are well prepared to make it happen, even in a green, clean way!

– Paul Clark, MBA ‘11

You can follow Doug, Paul, and Innovative Invironments team in their Cleantech Open experience on Twitter @douglassander.

Editor’s Note: This is the second in the series of blog posts that will follow two Oregon MBA graduates from the Center for Sustainable Business Practices as they participate in the semi-final round of the Cleantech Open 2011 to commercialize the SolarStream™ Awning System. 

Written by UO Business

The UO Lundquist College of Business empowers an engaged community of students, faculty, staff, and stakeholders who create, apply, and disseminate knowledge that contributes significantly to their professions, communities, and society. The college delivers a dynamic learning environment where world-class professors engage and get to know students, where students work on real projects for real companies, and where alumni go on to high-powered jobs worldwide.