Do the plans get better?
June 3, 2009
After spending many years reviewing business plans, I can say that I believe that most plans are junk. And, unfortunately, they don't seem to be getting any better. As more and more people get on the InterWeb (which is a "series of tubes," as you know), they all seem to come up with some of the same wacky ideas of what would be cool.
Painful lesson #1: What would be cool and What will get funded are two different things. Even some businesses that are really good ideas and could actually get done, are not appropriate for most types of funding. Let's face it--VCs and Angel Investors are GREEDY. They want their money Xed, not just doubled. It turns out that most businesses would never be able to create that kind of return, no matter what the exit.
It always surprises me how unaware the newest of entrepreneurs are. Unaware that there are TONS of smart people out there, unaware that if it's not there space, there may be something REALLY REALLY HARD to do in what they're planning.
The revenue plans are probably the funniest. Assuming traffic levels without planning customer acquisition cost, assuming huge consumer pick-up while putting all kinds of subscription gates in the way, plans with NO CLUE about what raising awareness, creating online brands and creating buzz COST.
So the patterns are there. Each new crop of wanna-be-entrepreneurs must go through the learning process.
Painful lesson #1: What would be cool and What will get funded are two different things. Even some businesses that are really good ideas and could actually get done, are not appropriate for most types of funding. Let's face it--VCs and Angel Investors are GREEDY. They want their money Xed, not just doubled. It turns out that most businesses would never be able to create that kind of return, no matter what the exit.
It always surprises me how unaware the newest of entrepreneurs are. Unaware that there are TONS of smart people out there, unaware that if it's not there space, there may be something REALLY REALLY HARD to do in what they're planning.
The revenue plans are probably the funniest. Assuming traffic levels without planning customer acquisition cost, assuming huge consumer pick-up while putting all kinds of subscription gates in the way, plans with NO CLUE about what raising awareness, creating online brands and creating buzz COST.
So the patterns are there. Each new crop of wanna-be-entrepreneurs must go through the learning process.
Posted by Bizplan Geek.
For better or worse, I am a serial entrepreneur, having been involved in more than 6 startups in the last 10 years (OK I'm ignoring the PC software startup I founded in college).
A little about me: In the past, businesses I have started have been featured in the New York Times, Wall Street Journal, and BusinessWeek. Some of these companies won design awards such as the MITX award for new media, MIMC travel & tourism award, and London International Advertising award. I've worked for large consulting firms such as CSC Consulting, and startups like OurStage, Symmetric, and UpTake. I've had large clients like AT&T, Travelocity, ConEdison, SunLife, and Wellington Management...and I've also consulted to small startups who didn't quite make it. You can reach me at bizplangeek atgmaildotcom