Startup Guide, Part 7: Why the Initial Business Plan Is Not So Important

Part 6

The initial business plan of a startup means very little, because it is extremely difficult to determine which combination of product and market will be successful.

By definition, you will be doing something new, in a world characterized by its uncertainty. You simply can not predict whether your product and business will work. And most likely, you will have to adapt to reality on the fly.
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As the military says, “no battle plan can withstand a clash with the enemy.” In your case - with the real world. Therefore, for a startup, it is more important to search for a large market more actively and to build a product hit the market, instead of trying to plan everything ahead of time. The history of successful startups speaks about this clearly.

I would simply point to Microsoft, which began as a software utilities company, while IBM almost forcefully forced Bill Gates into the area of ​​operating systems. Or Oracle, which was engaged in advising the CIA, until Larry Ellison decided to create a relational database. Or Intel, which focused on memory chips, until the advance of Japan in the mid-80s pushed Andy Grove to change operations on the production of processors.

But I recently read Randal Strauss’s wonderful book about Thomas Edison, The Wizard of Menlo Park . Edison's first commercial breakthrough was the phonograph - the forerunner of turntables, turntables, a Walkman, CD players and an iPod. Edison continued his activities and became one of the greatest inventors ( comment pere - and patent trolls ) of all time.

At the beginning of the story, Edison, an unknown inventor working on his startup, wants to design a more convenient device for telegraph operators. Particularly interested in his ability to send voice messages via telegraph wires.

From book:

The day after Edison got the idea of ​​recording voice messages received by telegraph, he got the idea of ​​implementation. That evening, July 18, 1877, after lunch in the laboratory, Edison turned to his assistant, Charles Bachelor, and remarked: “Bach, if we put a needle here, we can write something down, and then stretch it under a needle and get a record.”

After this proposal seemed so obvious, they did not even begin to admire him, but immediately turned to the experiments. An hour later, the design was on the table. Edison sat down, ducked to the sound receiver and said the phrase, which in the laboratory tested telephone diaphragms: "Our Mary had a ram."

Bachelor inserted a strip on which the phrase was written, again, and she issued "at ... necks ... ri ... ain ... wounds." “It was not very clear,” recalled Bachelor, “but the essence was clearly bugged.” The men issued a victory cry, shook hands and continued their work. By the next breakfast, they managed to get a clean reproduction from waxed paper (first audio carrier) after the first recording that day.

The discovery was mentioned in the magazine surprisingly casual.

This was an important moment in the history of inventions, but in subsequent years, Edison never told the story the way it actually happened that summer, but constantly shifted events from July 1877 to December. You can guess why: in July, he and his assistant did not attach due importance to their discovery. At that time, they worked hard to create working phones to show them in Western Union. There was no time to stop and think about the random invention of the first working model of the phonograph.

The invention was noted in notebooks under the “talking telegraph” rubric, as it was intended to be used at telegraph stations to record messages. One of the employees made a list of possible names for the car, which included: tel-autograph, tel-avtofon, chronophone - time-talker - talking clock, diddascofon - talking teacher - portable teacher, glottophone - language device, climate phone - weather announcer, klangofon - bird singing replicator, hulammophone - husker ( who, who, who, who let the dogs out?) comment

In October 1877, Edison wrote to his father that he "currently needs money," but if his "talking telegraph" is waiting for success, he will be given an advance from royalties. The commercial potential of this unnamed device was not visible to him.

A phonograph description in Scientific American in November caused frenzy in Europe and America. In The New York Sun were struck by the metaphysical consequences of the invention, which could lose the "echo of dead voices." The New York Times predicted (which strangely coincided in essence with their review article on the Internet in the mid-1990s) that great business can be done on “bottled sermons”, and wealthy experts will show off the assembled cellars with public speaking sets.

Such was the authority of Scientific American that all this hysteria happened not because of a working phonograph model put on display, but only because of the description made by Edison's assistant.

In late November, Edison and his team guessed the commercial potential of the phonograph as a device for entertainment. A list of possible uses was made: talking toys, toy trains, music boxes, talking clocks. There was even a hint of future music collections - a phonograph, as a car for the whole family, equipped with thousands of music recordings, could provide "unlimited fun".

But the real model was still not built. December 4, 1877 in the diary of Bachelor read: "our employee John Cruise built a phonograph today." Unremarkable entry; above it is “working on the talking telegraph” ...

On December 7, Edison entered Scientific American's New York office, put a small typewriter on the table, and in the presence of a dozen people gathered around, turned the handle of the plant. “How are you?” The car asked, slightly hoarse. "How do you phonograph?". The phonograph told the audience that he himself was feeling fine and wished everyone good night.

Working in the field of telegraph equipment, Edison was perfectly prepared for the sudden inspiration for the invention of the phonograph. But that world, focused on huge industrial customers, had nothing to do with the market.

The story goes on ... I recommend reading the entire book, it is very interesting there. But what I’m talking about: even if Thomas Edison didn’t understand at first what he did when he invented the phonograph ... After all, he tried to improve the equipment of telegraph operators ... What are the chances of you, or another entrepreneur, foreseeing everything in advance?

Part 8