Entrepreneurship is often portrayed as a process of careful planning. Aspiring founders are encouraged to conduct extensive market research, prepare detailed business plans, forecast revenues, estimate costs, and anticipate every possible risk before launching their ventures. While planning certainly has its place, experienced entrepreneurs know that there is a fundamental limitation to this approach: the most important questions about a new business cannot be answered from behind a desk. They can only be answered through action.
This reality is captured remarkably well by two influential voices in the startup ecosystem. Paul Graham, co-founder of Y Combinator, once observed that “Startups are like sharks. If they stop swimming, they die.” Brian Armstrong, co-founder and CEO of Coinbase, described entrepreneurship using a different but equally powerful metaphor: “You’re at the base of a mountain that’s shrouded in fog. You’re looking up at the mountain and trying to figure out how to get up there, but you can only see three or four steps ahead because the fog is so thick. So you have to just take steps into the unknown. And when you take three steps, another three steps will be revealed ahead of you. And sometimes you’ll end up on some local maxima and have to retrace your steps… But most people in life don’t take the steps into the unknown because it’s scary.”
Armstrong summarizes this philosophy in one simple sentence: “If you’re pre-product/market fit, the best advice that I have from that period is: action produces information. Just keep doing stuff.”
Although these statements use different imagery, they describe the same entrepreneurial reality. Early-stage ventures survive and grow not because founders possess perfect knowledge, but because they continuously generate new knowledge through experimentation. In other words, entrepreneurs do not simply execute plans, they discover opportunities by acting.
Why More Planning Isn’t the Answer
One of the greatest misconceptions among first-time entrepreneurs is the belief that uncertainty can be eliminated through additional analysis. This assumption often leads to what psychologists call analysis paralysis, a situation in which founders spend months refining business plans, conducting market research, designing logos, and projecting financial statements without ever interacting with potential customers. The irony is that these activities may create the illusion of progress while producing very little information about whether customers actually value the proposed solution.
The earliest stages of a startup are fundamentally different from managing an established business. Large organizations typically optimize proven business models. Startups, however, are searching for one. Before reaching product-market fit, entrepreneurs face numerous unanswered questions. Is the identified problem significant enough for customers to pay for a solution? Which customer segment experiences the greatest need? Which product features matter most? What pricing strategy will customers accept? Which marketing channels are effective? No amount of planning can provide definitive answers because these answers do not yet exist. They must be discovered.
This is precisely why Armstrong’s statement that “action produces information” deserves to become one of the guiding principles of entrepreneurship. Every conversation with a customer, every prototype, every product demonstration, every marketing experiment, every unsuccessful sales meeting, and every product revision generates new information. Some experiments confirm assumptions, while others reveal that the original hypothesis was incorrect. Both outcomes are valuable because they reduce uncertainty and move the venture closer to a viable business model.
Airbnb, Dropbox, and the Power of Just Trying
The history of successful startups provides abundant evidence for this approach. Airbnb, for example, did not emerge from a flawless business plan. Its founders initially believed that travelers might be willing to rent air mattresses in private homes during conferences when hotel rooms were unavailable. Rather than waiting until every uncertainty had been resolved, they launched a simple website and observed customer behavior. Early adoption was limited, but instead of abandoning the idea, they experimented continuously. They discovered that low-quality photographs discouraged bookings, prompting them to personally visit hosts and take professional pictures of their properties. This seemingly small action dramatically increased reservations and revealed valuable insights about customer trust and purchasing behavior. Over time, hundreds of similar experiments helped transform a modest idea into one of the world’s largest hospitality platforms.
Dropbox followed a comparable path. Founder Drew Houston recognized the difficulty of convincing users to adopt a cloud storage service that did not yet fully exist. Rather than investing years building a complete product before testing demand, he created a short demonstration video illustrating how the software would work. The overwhelming response validated customer interest long before the product itself was finished. That simple experiment provided more reliable market information than countless additional planning sessions could have produced.
Assumptions vs. Evidence: Why action matters
These examples illustrate a principle that extends well beyond technology startups. Consider two entrepreneurs launching identical businesses. The first spends an entire year refining financial projections, designing marketing materials, preparing investor presentations, and perfecting a comprehensive business plan. The second spends that same year interviewing customers, building prototypes, testing pricing strategies, making sales calls, collecting feedback, and modifying the product based on real-world observations. At the end of twelve months, the first entrepreneur possesses an impressive collection of documents. The second possesses something considerably more valuable: validated knowledge about customers, markets, and value creation. While the first entrepreneur has accumulated assumptions, the second has accumulated evidence.
This distinction highlights one of the most important characteristics of entrepreneurial learning. Information does not precede action; information follows action. Entrepreneurs often assume they must first acquire sufficient information before making decisions. In reality, many of the most valuable pieces of information become available only after decisions have been made and experiments have been conducted. Every action generates feedback, every feedback cycle improves understanding, and every improvement enables more informed decisions. Progress emerges through repeated cycles of experimentation rather than through exhaustive prediction.
Fail, learn, adapt
This perspective also changes how entrepreneurs should think about failure. In traditional management, unsuccessful initiatives are often viewed as costly mistakes that should have been avoided through better planning. In entrepreneurship, however, many unsuccessful experiments represent productive learning. Discovering that customers do not value a particular feature, reject a pricing model, or belong to a different market segment is not necessarily a setback. It is information that prevents even larger mistakes in the future. The objective is not to avoid every failure but to learn quickly, adapt intelligently, and continue moving forward.
Paul Graham’s metaphor reinforces this idea from another angle. Sharks survive because they never stop swimming. Likewise, startups remain alive by maintaining momentum. Continuous experimentation creates continuous learning, and continuous learning increases the probability of eventually discovering a scalable business model. A startup that stops experimenting gradually exhausts both its opportunities and its resources.
Brian Armstrong’s mountain hidden by fog may be an even more accurate representation of the entrepreneurial journey. Founders naturally wish they could see the entire route before beginning the climb. They seek certainty before committing time, money, and effort. Yet entrepreneurship rarely offers such certainty. The path becomes visible only one section at a time. Each step reveals the next few steps, and occasionally entrepreneurs discover they have climbed toward the wrong ridge and must retrace their path. Although these detours may appear inefficient, they are often the only way to identify the correct direction.
Learning instead of predicting
The implication for entrepreneurs is both simple and profound. During the earliest stages of a venture, progress depends less on creating perfect plans than on conducting meaningful experiments. Planning remains valuable because it helps organize thinking and allocate resources wisely. However, plans should be viewed as hypotheses rather than predictions. Their purpose is not to eliminate uncertainty but to identify which assumptions require testing.
Ultimately, successful entrepreneurship is not about predicting the future with precision. It is about learning faster than uncertainty evolves. The founders who eventually build successful companies are rarely those who begin with the most complete information. They are those who generate information more rapidly through deliberate action.
As Brian Armstrong reminds us, the road to product-market fit is almost always hidden by fog. Waiting for perfect visibility means never beginning the climb. The entrepreneurs who reach the summit are those who are willing to take the first few steps, learn from what they discover, and continue moving forward.