Thinking big vs Keeping it real

Last quarter I took two classes that, on the surface, seem very similar:

• MKTG465: Introduction of New Products and Services
• ENTR462: New Venture Formation

These classes seemed so similar, there were teams taking both classes and doing the same project in both classes. I was one of them, using my startup as the project for these classes. However, the approach we took in each class was different and consequently the projects we produced for each class were different.

New Venture Formation stresses realism. It focuses on creating the most tangible, easy to execute business possible. The judging criteria is centered around this. Can you execute? Can you be successful? It's a heavy workload class that calls on you to write an extensive business plan - typically fifty pages including exhibits and appendices. By the end of the process, you have a very good understanding of all the details around the business.

The one significant problem with New Venture Formation is that it calls on you to reduce risks as much as possible. The more definite you can be, the better is the plan. The problem with this is that some of the riskiest aspects of the business - those that are hardest to test - are removed, for the sake of creating a real, tangible business.

Razeghi's version of Introduction of New Products and Services is a different kind of class. It encourages you to think big. It wants you to take risks, so you can hit the big jackpot. The emphasis here is not in creating a detailed fifty page business plan for a realistic and tangible business. Instead, it is to decompose a big, risky idea into a series of experiments that can be tested, to prove that your big crazy idea has a reasonable chance of success. It calls on you to create traction and iterate the model to make the big idea work.

In my opinion, both approaches hold merit and have their use. Since both class projects were working on a real startup, PreScouter, we're now working on integrating the two. We're finding one route to the big, crazy idea is the realistic, tangible business...