Startups: Let’s Rewrite Your Business Plan!

Typically, startups write business plans to raise funding. And the time horizon for these plans typically stand at 3-4 years.

But then, it takes a while to build a business (while++ for Indian businesses). Let’s look at numbers first.

In Silicon Valley, it takes (on an average) 7 years to exit. In India? Well, it took JustDial 17 years to go public (read : India’s New Billion Dollar Club).

1AvgTimeToExitTech

Unless you look at valuation as a mere data point (of business success), there aren’t too many babies in the billion dollar club.

What does this really mean?

First, the bad news!

Mega success won’t happen so soon. Not that early. Not within  3 years. Or even 5 years.

The Good News?

Take a look at what has survived (and not survived) in the last 15 years.

Siebel, Sun, Nokia, Blackberry, Digg, Orkut, MySpace etc : do not exist anymore (Nokia does, but sold to Microsoft for a much lesser valuation).

What has survived? Very few. Google, Amazon, Apple, IBM, SalesForce

What does this really mean?

In 15 years, there is a very less probability that your current competitors will live to see those 15 years. There will always be new competition, but unless you are moving up (and up and up), you should not even worry about the competition (at any stage).

In fact, another good news is that you might be left with little competition over the next 15 years. Little *direct* competition, but more indirect threats. For e.g. Google doesn’t have a direct threat – they pretty much rule the search space, but unless they get mobile web well, they will lose the battle to others (i.e. indirect competition).

Revisiting Your Business Plan

Did Google have Android vision in 1999?

Did Apple think of tablets in 1999?

Was Amazon even thinking about Kindle in 2001?

Probably not. None of what successful survivors are currently doing was part of their business plan 10 years back (or even 5 years back).

What does this really mean?

Simple. Business plans aren’t just about the numbers. It’s a lot about DNA that a team is building. The DNA to visualise the next 5-10 years. The DNA to bet on big challenges that your competition is not even aware of (and at the same time, competing in the same marketplace, competing for same $$s as your current competitor- the competitor that will cease to exist in the next 5 years!).

And while you are feeling sorry for your competitor [heck! they are not gonna make it beyond 5 years 🙁 ], revisit your business plan and talk about 15 years.

What DNA are you building? DNA that says ‘this is how it works’ OR a culture that keeps questioning the current status? Visualise whether the business will survive the next 15 years (do you even want it to?). If yes, how it would look like?

Do you even expect (and want) the busines to exist for the next 15 years?

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