Developed by Wharton professor Ian MacMillan and Columbia professor Rita McGrath, discovery-driven planning has become an essential tool in exploring and developing the viability of a new business venture. Professor MacMillan began this research in the early 1990’s by studying venture capitalists and was surprised by the differences between actual and planned performance of VC investments. Through his research he realized VCs reduce the expense of a poor venture by only providing ventures a small about of money up front. If the investee is not being successful VC firms can withdraw quickly with limited loss. When working in uncharted markets, the key is to reduce the assumption to knowledge ratio over time and ahead of substantial investment. He saw how the process VCs use of making increasing incremental investments over time as confidence in a venture increases could be helpful to entrepreneurs and he systematized the process in what is now known worldwide as discovery-driven planning. The relevancy of the tool Professor MacMillan developed over 20 years ago was a discussion topic at the most recent Wharton Reunion Weekend.
To read the full, original article click on this link: Discovery Driven Planning: An Evergreen in Entrepreneurial Management | Entrepreneurship Blog
