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Book Review – Getting to Plan B: Breaking Through to a Better Business Model

I am going to occasionally post book reviews on this blog when I read something I find particularly interesting that relates to innovation, Lean Startup, and hacking.

Getting to Plan B: Breaking Through to a Better Business Model by London Business School professor John Mullins and Venture Capitalist Randy Komisar is a great addition to the bookshelf (or Kindle) of anyone interested in Lean Startup principals.  It has a lot of practical information about how to come up the ideas that you are going to test and learn from and builds a great case as it goes through case studies about companies including Amazon, Apple, Celtel, Costco, Dow Jones & Company, eBay, GlobalGiving, GO airlines, Google, Oberoi Hotels, Pantaloon, Patagonia, Ryanair, Shanda, Silverglide, Skype, Southwest Airlines, Toyota, Walmart, Zara and ZoomSystems.

The book argues that a business model is made up of five key areas: the revenue model, the gross margin model, the operating model, the working capital model, and the investment model.  A company is successful when all five of these areas are working together.  “Getting to Plan B” is the process of discovery that a company or entrepreneur goes through to find a model that works.  By constantly formulating different “leaps of faith” (i.e. hypotheses) and using dashboards to test them (i.e. measuring) this becomes a systematic process of discovery.

Sound familiar?  Sounds pretty much like the Lean Startup to me, and the book actually came out two years earlier!

However, the authors’ take it one step further by proposing a methodology for how to develop the “leaps of faith” that are to be tested.  The starting point is to look for analogs, examples of companies and models you are going to mimic, and antilogs, examples you purposefully choose to do things differently from.  The leaps of faith are then the things for which you have no evidence from these analogs and antilogs to support.

The book goes into detail about how to find analogs and antilogs and how to develop the dashboards that will be used to test your leaps of faith.  There is a chapter on each of the five elements of the business model with examples of companies that have successfully innovated each element and a chapter about how the five elements interact with each other and how companies that can innovate at this interaction level are some of the most successful.

Overall, a great read, well written, with lots of interesting examples.  I can’t help but wonder if Getting to Plan B was an analog for Eric Reiss and The Lean Startup.

  1. Insightful and interesting topics and writing, Rick. Very focused blog. I love the “exploring the missing link . . .” piece. Intriguing! Best of luck to you!

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