Business Plans Help the Web 2.0 Kool-Aid Go Down
Is it a “sad time for the Web” as Steve Rubel laments?
NO! Irrationally exuberant? OFTEN!
The original “micro-persusasion” announces he doesn’t have the heart for propping up “ridiculous BS press releases” that fly into his Gmail box” anymore. (As SVP at Edelman, “the largest global PR firm,” Rubel presumably helps assure a no ”ridiculous BS PR” policy there!)
Press releases are not the only problem: a “tech blogosphere getting drunk on its own kool-aid” and heralding every shiny new object as the next Google (Jes.usR.com) may soon send all Web 2.0 co-conspirators fleeing for the safety of “Betty Ford Clinic 2.0,” Rubel warns.
“No one’s casting a cynical eye anymore. No one’s looking at valuations and reality—or at least very few people are,” Rubel underscores.
Here at Insider Chatter, the Kool-Aid recipe is indeed given the critical eye, with an ongoing piercing look at the hard-nosed business world reality behind “the next big things,” or not.
I am a strong proponent of business plans, despite them being deemed unfashionable by the very tech blogosphere Rubel portrays. Case in big who needs business plans point, Twitter, signaled out by Rubel as a Web 2.0 startup that “gets it” because it is presumably about “changing the Web, not making a quick buck.”
Rubel may be right about Twitter not being worried about “the almighty dollar,” after all the venture capital firm that put big bucks behind it, Union Square Ventures, proudly hailed “we’ll have plenty of time to figure out the business model.”
BUT, can Twitter really be a best Web 2.0 practices model if it portrays a business model/plan optional approach to doing “business”? NO!
LinkedIn is a solid Web 2.0 play with a real business model. Earlier this month, I used the LinkedIn “Answers” feature to find out: “STARTUP BUSINESS PLANS, MUST-HAVE OR OVERRATED?”
While Web 2.0 startup circles today happily “diss” business planning and even business models, here is some of the real-world advice I got, thanks to Web 2.0 LinkedIn:
Raymond Luk: My Bubble 2.0 sense is tingling right now! Only Bubble 2.0 entrepreneurs could “diss” business models and business planning. But wait, that might be perfectly consistent because many don’t actually have businesses. There is a difference between building a [insert non-Ajax product] using Ajax (now it’s available *online*!) and creating something people will use *and* pay for.
Anyone who disses business planning is really a speculator, not an entrepreneur. You don’t need a business plan to start a pyramid scheme either. Business plans are not just for venture capitalists. They can take many forms (from quick and dirty to long and complex) but they represent the thinking behind the business. Who are we? What market do we serve? What makes us different? What is our exit strategy
If you don’t need to answer those questions then, sure, you don’t need a business plan. But then you really don’t have a business do you? You’re just building Ajax apps for fun…
David Lorenzo: One of the common characteristics of successful entrepreneurs is that they set goals and objectives for their business and they have a plan to achieve those goals. In some instances this is a formal document that includes financial projections and is shared with potential sources of financing; and in other cases this is an informal document that is folded up and reflected upon during moments of despair.
The bottom line is that a good business plan is a living, breathing document that should be changed and updated as the business grows – and the leadership team learns more about the market. The best business plans are like a roadmap that helps chart the course toward success.
Too many people think of them as academic exercises that are used only for the launch of the business or to obtain financing. I suspect these are the folks who believe that they are overrated.
BOTTOM KOOL-AID LINE? Any lamenting of a Web 2.0 bubble ought to lament the current ill-advised dissing of business plans!
MORE: Startups: Who Needs Business Plans? Draper Fisher Jurvetson, Mayfield, Sequoia… and DayJet CEO: Business Models Drive Disruption, NOT Technology
PLUS: CED Tech 2007: 30 Cool Startups, But NO Facebook Apps and paidContent Disrupts Business Media, Today in Silicon Alley!
NEED HELP IN DEVELOPING A BUSINESS PLAN? CONTACT DONNA BOGATIN