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I have never read a business plan or balance sheet

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Re: I have never read a business plan or balance sheet

#131

Post by marklubi »

rkagerer wrote: post #109
paulpauper wrote: post #29

Earlier quoted context omitted.

incognito mode

Not the op, I don't have any bans, and I'm not normally signed in to Twitter. But a side note on UX here... When I land on this tweet the site takes long enough to annoy me before it loads the content (ie. everything below the "Log In / Sign Up" banner is delayed). When I scroll down past the first few tweets the whole page disappears and is replaced with a nag screen implying I can't see more without signing up and/…

What Twitter has been doing with blocking access without an account has reached the levels of being user hostile. It's like they're following the awful pinterest model.

I find the URL that they call just before they block access to be interesting:

https://twitter.com/i/api/1.1/onboarding/fatigue.json

Onboarding Fatigue

Re: I have never read a business plan or balance sheet

#132

Post by syzygyhack »

moontear wrote: post #113
Neverending wrote: post #71

He later goes on to claim he's "never read a pitch deck". https://twitter.com/paulg/status/1492696791434731529?s=20&t=... What an eye roll.

That one was more puzzling to me. Every one liner people would use to pitch their idea, every elevator talk essentially is a „pitch deck“.

A one-liner is a pitch. A presentation is a pitch deck.

Re: I have never read a business plan or balance sheet

#133

Post by onion2k »

guynamedloren wrote: post #106

I’m surprised the YC application hasn’t been more of a focus in this discussion. The following questions are pulled from the application (perhaps an older version): What is your company going to make? Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making? What's new about what you're making? What substitutes do people resort to because it does…

These questions cover product description, value prop, market analysis, financial projections and more, all of which are the core of a “business plan”.

There is a key difference though - none of the YC questions are about the planning bit of a business plan. None of them are about what you're going to do in the near term future. It's all about what you've done so far and where you believe you could be when you exit.

The issue with business plans isn't that they include a report on what you've done to date. It's the idea that you can reasonably predict what you plan to do over the next year or two. Lots of more traditional businesses can do that, and a business plan is appropriate for them, but a YC startup needs to be significantly more agile than that. Any plan will certainly be wrong, so there no point wasting time making one.

Re: I have never read a business plan or balance sheet

#134

Post by tomhoward »

darksaints wrote: post #128
tomhoward wrote: post #114

Earlier quoted context omitted.

“telling prospective startup founders that they shouldn't ever worry about the balance sheet” He said nothing of the sort.

He just told them that he isn't ever gonna look at it. Not sure how you could interpret that in any other way.

It could be interpreted in several ways, and you're choosing the worst possible way to argue against. And you're totally overlooking the fact that his career success since the very start of YC has hinged entirely on giving good advice to startups and focusing on the right things. You might think that after 17 years and countless successful companies, we might just think twice about presuming ignorance or malice in what he's saying.

The point of this tweet is just that balance sheets don't determine outcomes for early stage startups; good products and excited users do. Balance sheets matter later. Many of the teams PG invested in were not even incorporated when he invested in them.

Re: I have never read a business plan or balance sheet

#135

Post by tomhoward »

davidivadavid wrote: post #120
tomhoward wrote: post #112

Earlier quoted context omitted.

You keep throwing barbs around but missing the important point. He specifically didn’t want to see balance sheets or income statements as he knows they can be full of bullshit (FWIW my only university qualification is in accountancy, so I know what he means). All he cared about the bank balance and whether it was going up or down, because that’s what indicates whether the company would survive or not. He still cared…

Dude, everyone knows that. Seriously. Nobody's missing the "important point" because everybody who's been on Hacker News for five minutes has heard Paul Graham make that point. Indeed, people have made jokes about startup business plans for decades. Literally everyone knows that those things don't matter for super early stage startups. The tweet, however, and very much like many of Paul Graham's latest essays and twe…

"Literally everyone knows that those things don't matter for super early stage startups."

If literally everyone knows that then I don't need to be commenting, as my replies in this subthread are to someone insisting that balance sheets matter even before a company has a working product. Clearly they don't.

It seems the people "reacting" are imagining some deeper intention or elaborate plot or some complicated character weakness behind it all.

I just see him repeating what he's said for years: for early stage companies, you should just focus on making something people want.

Re: I have never read a business plan or balance sheet

#136

Post by onion2k »

Neverending wrote: post #71

He later goes on to claim he's "never read a pitch deck". https://twitter.com/paulg/status/1492696791434731529?s=20&t=... What an eye roll.

I don't find that particularly hard to believe. Reading a pitch deck is like reading presentation slides - you can't really know what the author had in mind unless it's really good, and you tend to fill in the blanks with your own biases. That makes reading most decks a bit redundant. It's probably better just to talk to the founders and actually see their pitch.

Re: I have never read a business plan or balance sheet

#137

Post by tomhoward »

darksaints wrote: post #123
tomhoward wrote: post #112

Earlier quoted context omitted.

You keep throwing barbs around but missing the important point. He specifically didn’t want to see balance sheets or income statements as he knows they can be full of bullshit (FWIW my only university qualification is in accountancy, so I know what he means). All he cared about the bank balance and whether it was going up or down, because that’s what indicates whether the company would survive or not. He still cared…

But you just said that he actually didn't care much about that stuff, that he just wanted to know 3 specific datapoints. Datapoints that traditional financiers have gotten from traditional financial statements for centuries. Sure, there's lots of bullshit in financial statements. But there's also lots of bullshit in emails and slack messages. If someone is pumping up a balance sheet with dead receivables and check ki…

"You're acting like PG is sitting on something profound here"

I'm really not. You and others are acting is if he said something far more grandiose and potentially influential than he did.

He's just saying he focuses on teams and products when investing in super early stage companies. Finances matter only to the extent that the company can survive long enough to become sustainable. It's only then that GAAP accounting matters.

It's really not that big a deal. Seriously, which competent startup founder is going to make a decision to "never" take care of balance sheets for their entire company-operating career based solely on this tweet?

Re: I have never read a business plan or balance sheet

#140

Post by daniel_iversen »

guynamedloren wrote: post #106

I’m surprised the YC application hasn’t been more of a focus in this discussion. The following questions are pulled from the application (perhaps an older version): What is your company going to make? Why did you pick this idea to work on? Do you have domain expertise in this area? How do you know people need what you're making? What's new about what you're making? What substitutes do people resort to because it does…

I would certainly hope that all founders have gone through these questions in detail, and may even internally have it written down (even if they didn't call it a business plan), but I guess in an "interview" people might (accidentally or intentionally) paint things very rosy, and sometimes as the owner of the plan you can stare yourself blind in the details.. Having someone like PG question and unpack things in real-time would probably be priceless for most startups! Also remember that when you invest in great people as much as (or even more than) ideas, then the moment-in-time plan matters less/differently somehow.
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