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0 pointsargonaut13y ago0 comments

You completely missed my point. Read what I said here: "So instead of spending time on a business plan, the recommended route is to build a quick prototype and see how users respond to that."

A business plan is nothing more than an idea wrapped up in some estimates and guesses. Sure, you can do "market research," but those are nothing more than guesses and they usually turn out to be wrong. So in a sense, when you criticize money being thrown at an idea, you are criticizing the notion of business plans. My point was that business plans are a negative signal because all it indicates is that you have an idea and that you haven't built anything to test your idea.

It is not a point of whether or not you can put your idea on paper. It's a point of wasting your time over-analyzing things you cannot know - and then putting all that useless analysis on a multi-page business plan or a 15 slide presentation, etc.

No, it is not the case that Silicon Valley just throws money at ideas (alone), and you're arguing against a straw man if you think I ever made that point. In fact, the process of building a prototype and validating your product by testing it in the real world is the quickest way to get huge multi-million dollar valuations in Silicon Valley. The exception would be having a very strong team with experienced founders.

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chris_dcosta13y ago

I totally agree that actions speak louder than words, and a app or site with traction certainly demonstrates that an idea works, but the point you missed is the money point.

If you have money coming in, why do you need to raise more money?

If you plan to raise more money on the back of traction how much do you need, why do you need it and how will you spend it?

What does your balance sheet look like?

What is your cash flow?

All these questions are answered by a business plan, and you cannot avoid answering them just because you have traction, no matter what you say.

argonautOP13y ago

> the point you missed is the money point. Explain how I missed the point. Nothing you said indicates anything about how I missed the point.

You don't need a 5 page business plan or a 15 slide presentation to answer those questions. You can answer all of those questions in 5 minutes of questioning from investors.

And yes, you CAN avoid answering those questions if you have traction. If you have MASSIVE traction, your cash flow and balance sheet is pretty much irrelevant since the assumption is you can monetize later (see: Facebook, Instagram, Twitter, Tumblr, many other social companies). Even in Silicon Valley this is the exception, make no mistake, and generally doesn't apply to B2B or B2D(eveloper) companies, but it is one possibility.

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