Overview
"Discovery-Driven Planning" is a 1995 Harvard Business Review article by Rita Gunther McGrath and Ian C. MacMillan that articulated a methodology for planning under uncertainty — one of the intellectual precursors that Steve Blank has cited as foundational to the Lean Startup methodology.
The Methodology
McGrath and MacMillan argued that conventional business planning — which assumes relatively predictable outcomes — is dangerous when applied to new ventures operating under high uncertainty. Discovery-Driven Planning inverts the conventional approach:
Reverse Income Statement: Start with the required profit and work backward to determine the revenues, costs, and unit economics needed to achieve it. This forces explicit articulation of the assumptions underlying the business case.
Assumption Checklist: Systematically identify and document every assumption underlying the plan — customer behaviors, market demand, pricing, technology capabilities, cost structure. Assumptions are rank-ordered by importance and uncertainty.
Milestone-driven checkpoints: At each milestone, assumptions are tested and the venture can be continued, pivoted, or halted based on what has been learned. Funding is released based on the accomplishment of key milestones, not upfront commitments.
Connection to Customer Development
The conceptual throughline is clear: both Discovery-Driven Planning and Customer Development reject conventional planning in favor of iterative assumption-testing under uncertainty. Blank has cited McGrath and MacMillan's work as a foundational influence. The key difference is that Blank made the assumption-testing process concrete and customer-facing — instead of testing assumptions at internal milestones, Customer Development tests them by getting out of the building.
Significance
Discovery-Driven Planning (1995) predates Customer Development (2003) by eight years and represents the broader intellectual context from which Blank's work emerged. It demonstrates that by the mid-1990s, leading business thinkers were already recognizing the inadequacy of conventional planning for uncertain ventures — Blank's contribution was to operationalize this insight specifically for startups through direct customer contact.
Sources: McGrath & MacMillan, HBR July 1995; Wikipedia (Discovery-Driven Planning)