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Discovery Driven Planning:  Debunking dumb entrepreneurial ideas

Wired magazine runs a regular column by “Mr. Know-It-All” in which the great mysteries of our time—such as how to retrieve porn from a laptop you’ve loaned to a friends’ child and what the correct protocol for breaking up on Twitter—are sweepingly resolved.  In the September, 2008 column a reader writes to ask how he can talk his ‘pigheaded’ brother out of investing in a venture to generate energy from hog manure.  Mr. Know-It-All had some pretty good suggestions, including checking out the people involved in the venture to see what their track record is like and remembering not to invest your life’s savings in an uncertain business.

To that, however, I would add that anybody even considering investing in something like this should really do a discovery driven plan, particularly in situations in which what we call the unit of business isn’t clear at all.  .  Just as we saw with the example of the toy store we looked at earlier, being forced to detail assumptions about costs, who the customer is, and in this business, the price of future energy and raw materials inputs is highly likely to show that the business is highly unlikely to succeed.  Of course, that much being said, there are always wonderful exceptions.  The problem is, they’re rare. 

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