I feel like a crazy person for having to write this, but: if you are starting a business (yes, non-profits are businesses), then you need to have a business plan. If you launch a business and you have not done the work to have a business plan, then in 99.999% of situations, your business will fail. A business plan includes market & competitive research, a revenue plan based on that research that includes realistic pricing models and costs, a marketing plan, and several options for when things don't turn out like you planned. This isn't even Business 101, this is like Remedial Intro to Business. If you don't have this worked out before you launch, you have already failed.
The corollary for this is as a user, you should determine whether or not the business you are planning to depend on has a business model before you choose to depend on them. If there is no apparent income stream, then the business will close at some point and you may as well skip all the heartburn and choose not to use that business for anything you care about. BlueSky, I'm looking at you right now.
I think this was their business plan. See if it works and, if it doesn't, shut it down
Is that a problem? Seems like a fair strategy. lol
Fair early, fail fast is a cornerstone of startup culture
That's not what Session is doing. They're dragging it out with a plea for donations to cover operating expenses.
I don't see the issue.
Keeping the servers online for 90 days is a very good thing.
This final donation run doesn't change the timeline unless it gets a big amount of money, in which case is it supposed to be bad for them to change plans?
I don't see an issue either. I never really fully bought into moving fast and breaking things.
I'll rephrase. I don't see what's "dragging it out" about what they're doing.
Only if you're using other people's money.
I'd wager most still successful businesses weren't started with much of a plan, especially if they offer services instead of products. I started mine by paying less than a hundred bucks to incorporate on a whim, and was successful for many years. The only reason I shuttered it is because it led me to programming and I went off in that direction instead. There are many such examples everywhere you look, so it's not just anecdotal. I'd say that all one needs is determination and a vision.
You know, bra, at Sandhill Road offices we call this "to make a pivot to challenge more sustainable goals" or so ;-)
nah. we never had a business plan and are still going strong 11 years later. 99.999% is a gross exaggeration of reality.
we’ll never actually have this data, but I bet there isn’t much correlation if any between having a business plan and being successful.
have you started a successful business?
I suspect you did actually have a business plan, even if it was informal & just in your head. Something like "based on my experience in this line of work, I can charge about $X for Y service, if I get Z sales at that price, it's a viable business, otherwise I'll try to do ABC instead." It's light on details, but that's still a business plan, you had a plan to bring income in. That's fine.
Not having a business plan looks like "we'll release a free thing, have no way to generate income, lose money for a few years, and then beg for a million dollars." That's not a business plan. That's a waste of your time & your users' time.
> have you started a successful business?
Not yet, but I am actually working on it! Having a meeting with a local business tomorrow to discuss potential market pricing options so I have some idea of how much money I can expect to make. Business plan!
> "we'll release a free thing, have no way to generate income, lose money for a few years, and then beg for a million dollars." That's not a business plan. That's a waste of your time & your users' time.
This is literally the foundation story of numerous billion-dollar businesses. In fact OpenAI managed to beg their way into a trillion dollars after losing money offering no kind of product for many years. It sounds like it's just a business plan that you don't like very much.
Off the top of my head, I believe Twitter, Youtube, Discord, Reddit, Imgur each had no monetization at all for the first 3~5 years of their existence. Or more recently there was uv, that write-it-in-Rust Python package manager that had no avenue for monetization but received millions in investment funding a team working on it full-time until successfully getting bought out by OpenAI.
> I believe Twitter, Youtube, Discord, Reddit, Imgur each had no monetization at all for the first 3~5 years of their existence
yes, their business plans was always to engage a lot of users losing VC money until you are a platform with enough moat to add monetization. It was the plan all along
It is the plan for plenty of startups: when it works you become a tech giant, otherwise you fail and no one knows you
Those are actually all pretty good examples of what I'm talking about, yeah. Investment money is not income, it is debt. It has to be paid back some time, or else your business will close. So the users who came to depend on the business will get boned when the business either closes or drastically changes as they find a business model.
OpenAI, for example, is not profitable as far as I know. I think the users they have now will be in for a rude awakening once they have to come up with a business model in order to pay back their investors. Startups that don't have a business model and get bought also regularly get shut down shortly later, leaving users stranded, look at Nest or Keybase for example off the top of my head.
Investment money is not debt. Equity and debt are different things.
For my master thesis I did a lot of digging into the research on success factors for startups. And at least based on what I found back then, you're right. The correlation is weak between any factor like this and success. Generally positive though, so it does make sense to try doing some planning. But it's definitely not a requirement.
In general, observable factors doesn't strongly correlate with success. Probably both because there are so many to choose from and because the real world is complex and typically doesn't align well with any predefined plan.
This kind of analysis sounds far more interesting than a lot of the "just do what I did!" startup writing that's out there. Do you have any recommendations for further reading from this perspective?
I’m not speaking from the startup world, but the sheer amount of small businesses that don’t do any level of revenue forecasting, financial modeling, or even formal budgeting and still make a comfortable sum (~$10m assets over the course of 10 years) based on instinct is pretty staggering. Personally it seems more stressful but that’s the leeway experience gets you.
It took Uber, like, 14 years to become profitable. That doesn't mean Uber is necessarily a success, though. They could still disappear.
There's a lot of corpse businesses around. The walking dead, just operating with zero profit and no realistic plan to be profitable. Their investors are usually just stupid or they think they can eventually squeeze the market so severely they can't go out of business.
https://cdn.sanity.io/files/btop3zhg/production/6cdd8502a5fd...
Closest thing I could find poking around.
Here is an example of one of their core growth plan items from the strategy above:
"Social Media Campaigns, Organic and Paid Driving key messages around digital hygiene, decentralisation, and security on social media platforms to raise awareness."
The whole pdf is basically a collection of the remedial "go-to" SaaS growth blog posts everyone thinking about startups read: make content, build a community, turn your community into advocates, write about things people care about etc etc.
Given I've done this stuff for some 20+ years now, here is what is missing and frankly what most folks miss/don't want to admit:
This document basically has no ICP, who is the ideal customer? What is their persona? Who specifically are they, like, super specifically! You can't start with "oh anyone who wants anon-privacy first msg'ing!" That would have been like me at digitalocean saying "oh it's for anyone who needs a VM" - you can't execute a series of steps with that, you can't boil the ocean so to speak, we had to work through communities one at a time, we did: rails, node, php, devops/config management, in that order, split up over quarters and years, maybe it looked like we just...did developers, but we didn't, we slowly worked our way through all the developer communities slightly tailoring towards them while keeping things general enough.
The biggest problem here tho is the classic vitamin vs. aspirin problem. They're selling "better privacy" and "decentralization" - these are vitamins for the vast majority of people - they're things people say they care about in surveys but don't actually switch apps for. The 85% of adults who "want to do more to protect their privacy" aren't switching off WhatsApp. Are they the most secure messenger, or are they a token ecosystem with staking? Those attract fundamentally different people with different motivations...so just bolting them together creates confusion.
Folks need to stop thinking "we're going to do marketing" = "we're going to build a business" marketing, go to market, growth.. these are tiny components of overall business strategy. </rant>
> I feel like a crazy person for having to write this, but: if you are starting a business (yes, non-profits are businesses), then you need to have a business plan.
Not in tech you don't. The business plan these days is try and get as much investment money as you can to redistribute to your friends, have a few parties, hand out some Macbooks and try to get acquired by Google before your runway runs out.
> The business plan these days is try and get as much investment money
I know you're trying to be snarky, but this is itself a business plan and will impact how the company is operated.
> try to get acquired by Google before your runway runs out.
And on the user side, treat this outcome (company whose product you use being acquired by Google) the same as the company announcing it will go out of business within the next year, because Google will almost certainly shut the service down.
Exactly. The explicit plan for many/most tech startups is to raise VC money and get an exit before everything falls apart.
My last job was one of these. Everyone except the CEO and one designer quit. The money was drying up, CEO spent all his time chasing flashy big name customers who didn't want anything to do with us while ignoring customers begging to buy our product.
When I was in college, we were required to take a business class (Business 101) that mandated a finished business plan as part of the project.
It had to be long, in-depth, and include everything you mentioned.
I was incredibly surprised when I entered the tech and startup workforce that these were generally absent.
I had misunderstood the class and instructor and thought that you couldn't even start a business without one.
Then, when I started raising money for my own venture, I thought for sure a complete business plan was a prerequisite.
Nope. A few graphs, preferably hockey-shaped, and a good story were all that was necessary.
My venture failed, of course. But if I were to do it again, I would do myself the favor of having a complete plan. It would definitely save a lot of headaches and guessing in the moment.
There is some great irony that you can have a flashy app with good user growth, and get a chunk of cash from a vc firm. But if you want to get a loan from a Bank to open a restaurant you best have a business plan.
Privacy enthusiasts tend to align with anarchists - people who intrinsically distrust institutions. Maybe this also correlates with qualities like blind optimism, or disbelief in institutions like capitalism?
> Privacy enthusiasts tend to align with anarchists - people who intrinsically distrust institutions
That's not a reasonable definition. The distrust in the institution is actually a side effect of questioning the authority for authority sake. Anarchists aren't a bunch of individualists that want to burn down whatever we've got in terms of mechanisms in the society regardless if they are necessary. It's just the manifestation of the dialectical opposite of the expression of power and authority.
And privacy enthusiasts just know very well that power shifts and what once was a necessary mechanism can be abused by an elected authoritarian leader.
> Privacy enthusiasts tend to align with anarchists
That's a mighty broad brush you're painting with over there.
What do anti privacy enthusiasts align with?
Statists, I suppose.
Slack (originally an MMO), Nintendo (card games), Nokia (rubber shoes) and Netflix (DVDs over snail mail) would disagree.
"We'll gather a bunch of talented people together, figure out what this industry needs and then do that, let's hope we can do that before the money runs out" can be a viable business plan. There's no guarantee it's going to work, there's never a guarantee a plan is going to work, but it can work sometimes.
You’re neglecting the fact that each one of those businesses had a plan, they just pivoted to more successful plans.
Plans are useless, but planning is essential. IIRC Nintendo had been operating for decades before they shifted to videogames. And Glitch (the MMO that gave birth to Slack) was also very much a product with a plan. Plan failed, or execution failed, or the industry shifted, or something else, or all or the above. But for sure it was not just "a bunch of talented people."
Nintendo was founded in 1889 and basically predates electricity in the home. I think they did a very successful job pivoting to new forms of entertainment as they arose over the years. Not a planning failure in any sense.
I believe NetFlix actually had a plan to stream movies from the start (hence the name) and just did the DVD shipping as a way to get started.