I feel like recently, as the Lean Startup movement gains more and more traction (I love the Lean Startup principles) and there are more incubators, accelerators, innovation centers, etc. helping startups get off the ground, that I’m hearing more and more this idea:
“you don’t need a business plan, you need a great pitch”
While I absolutely agree that a great pitch is critical for any high growth startup thinking of pitching Angel Investors or Venture Capital firms, I am puzzled by this idea that you need a pitch but not a plan. When I talk to people who run incubators and accelerators, they all give me the same song and dance. Full disclosure: as the CEO of Palo Alto Software, the developers behind LivePlan, a Software as a Service online planning solution, it is in my benefit to have every small business and every startup write a business plan. But nonetheless, I run this business because I truly do believe in the tools that we produce and truly feel that planning will make startups and small businesses more successful. So, back to this idea of a plan vs. a pitch and what a startup really needs to be successful in today’s landscape. Let’s make the assumption that you don’t need a plan. That what you need is a fantastic pitch. A pitch where you presumably need to talk about:
- Your special sauce. Why your product or service is what this world needs.
- Your team. Why you are the ones to make this happen.
- The competitive landscape.
- The market, and how you will reach it.
- How much you will sell, (i.e. your forecast) over the next 12 months, and then the next few years.
- How much it will cost you to sell (i.e., your Expenses).
- Your implementation plan/timeline to implement.
- How you will use the investment you are asking for (most likely it will match a Profit & Loss you have done).
- What investors will get for giving you their money.