Why Business Plans Are Overrated (And What Smart Entrepreneurs Do Instead)

For decades, it was common to “write the big business plan” before doing much of anything. Entrepreneurs would detail every possible expense, create elaborate forecasts, and spend months adjusting PowerPoints—all before ever talking to a single customer. The world is littered with failed ventures built on such plans, all polished and persuasive but unsupported by reality. The flaws? Plans are guesses, not proof—and wishful thinking is cheap fuel that burns out quickly in the marketplace.

Instead, leading thinkers and seasoned founders now champion a customer-driven feasibility study, where the main job is to test whether what you want to offer truly matters to anyone. The smartest entrepreneurs quickly build rough models or prototypes—sometimes just conversations or sketches—and chase feedback from their likely audience, not just friends or family.

They deliberately write short, brutally honest memos to themselves: here’s what customers said, here’s what’s still unproven, here’s the risk if my assumption is wrong. This habit brings small truths to light before big commitments are made. You learn and adapt instead of doubling down on wishful forecasts.

This change in approach draws on psychological research about confirmation bias (our tendency to see only what supports our dreams) and the value of 'experimentation' in organizational learning. Instead of betting everything on reams of paper, you let customers tell you whether you’re solving a problem they’d pay you to fix.

Start by asking yourself what pain or aspiration your idea is supposed to resolve—write this in one plain sentence. Next, resist the urge to build everything out; instead, get your roughest version in front of real people who might eventually give you money, and listen closely to what turns them off or makes them light up. Write a memo not for investors or followers, but for yourself, detailing the actual evidence you’ve gathered: what you still don’t know, and which hunches need testing next. This process saves you from months of wasted effort and reshapes your plans on solid ground, so you’ll know you’re onto something (or not) before it’s too late. Try switching to this approach for your next project—chances are, you’ll spot issues or opportunities much earlier than with any fancy plan.