I don't think anyone sees 3-5 year plans as promises, more as the fact that you've thought about what your company will be doing in 3-5 years.
Yes technology is impossible to predict but they want to see that you've given it more thought then, we don't need revenue Google buys us in year 2!!!1!
Well, if you've ever had to write a business plan, you'll agree the projections for a startup end up being complete BS, but they make investors feel safe looking at a 20+ page document with lots of charts and numbers.
That said, business plans can be useful and help the founders solidify their business model, predict costs, etc. If anything, it helps you get a vague idea of what to expect a few years down the road instead of just the next 60 days.
No, I'm being serious. Thinking about your business model is useful, and planning is useful, but the formal practice of writing an official "business plan" (with revenue projections, etc.) is from a bygone era. More than anything, business plans give people (in this case, Arch Grants) a false sense of security.
Oh yes I completely agree. New industries move too fast to predict their profitability. I think the resume will go the way of the business model in our lifetime, if not 10 years.
You nailed it. Doing the traditional resume-and-interview grind is OK if you're just getting started, but as soon as possible you should be building and using your personal network. If after gaining some experience you need a resume to get a job, you're probably doing it wrong.
Filling out the YC application thoroughly and thoughtfully will do more to make you think about your business than writing a business plan. You don't have to submit it, but answering the questions as if pg were going to be evaluating it is a great mental exercise!
Same way you work any business model projections, pull it out of your....
It's really not a bad idea to set up a business model with a set of variables defined from which you base your projections. When I do this, I make it very easy to drop in actuals and have the projections auto updated based on the collected metrics over the original projected ones.
1) you don't need $500k+ in funding to build a successful software company.
2) this is especially true living in a part of the country with a reasonable cost of living. Somewhere like Missouri, $50k is two reasonable years of runway for a single 20-something (even in a metro area like St Louis, you'll be able to rent for ~$400 .)
3) it's pretty ridiculous (and arrogant) to assume that nowhere else in the country can you get investors.
Not true. I worked at one! However, it's fair to say there are no VCs in St. Louis that focus on consumer-facing technology companies.
That said, St. Louis isn't impossible. Strangeloop STL is one of the hands-down, bar none, best conferences in the country each year; Slicehost did quite well for themselves from there; Jack Dorsey goes back home all the time (a co-founder of Square is from the Lou, and the swipe-powered dongle technology comes out of Wash U); and it's not like Chicago's all that far away.
Yes, there are VCs in almost every major city, and I was definitely exaggerating, but the number of VCs in cities like St Louis is laughable compared with the valley.
By the time you move a team you may exceed $50,000 in expenses.
Anyone who is really serious will not take $50,000 to move to St. Louis.
And of course there are exceptions, like someone who has family in St. Louis, or someone who does know investors there etc.
How can anyone reasonably predict where their N-month old company is going to be in 3-5 years?