Let's face it - the traditional business plan as we know it (or as we knew it) is slowly slowly going away. Or is it? Startups and small businesses move at such lightning pace these days that a static document quickly becomes outdated, but the principals and lessons involved with its creation could be valuable in a new form. Many young entrepreneurs still think a business plan is a must-have cornerstone of their business, but as many venture capitalists have said recently, the traditional business plan is not the end-all be-all for startup success.
- Bijan Sabet, Spark Capital
"The next generation business plan should look more like a GANTT chart or database application than a Word doc or an Excel spreadsheet, and it should be a collaborative, living document," writes Rainey. "In fact, as a venture capitalist, I ask start ups to give me a project/task oriented view of the first 100 days after funding. This view is better than the prepared business plan for my purposes and infinitely more useful for the entrepreneurs as well."
Business Plans Are Dead
Other VCs have voiced their opinions on business plans recently as well. Spark Capital partner Bijan Sabet suggested to a commenter on his blog that he doesn't need a plan at all. "Most angels and VCs I know don't look at them. Go build a product that you want to see in the world. That's my suggestion," says Sabet.
business models are far more important than business plans. "Instead of writing a formal business plan they took their business model and got out of the building to gather feedback on their critical hypotheses," he says of one startup. "This team had wanted to have coffee to chat about which of the four seed round offers they had received they should accept."Lean startup advocate Steve Blank thinks
Long Live Business Plans
But not everyone is ready to give up on business plans. Union Square Ventures' Albert Wenger argues that business plan competitions are still the best way to excite students about startups and entrepreneurship.
"There is no cheaper way to get a lot of energy and excitement going than organizing a tournament. That is really what a business plan competition is," writes Wenger. "By offering a meaningful prize to the winner and having a big initial field it is possible to get a large number of students exposed to thinking about startups as an alternative to joining a large company (or worse yet Wall Street)."
What do you think? Should business plans go the way of the dodo? Or is there still room for them in the startup and entrepreneurship ecosystem? Perhaps they just need to evolve like some have suggested. Let us know what you think in the comments below!