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Do internet startups need a business plan to succeed?

Chris Barsness,

startup, finance, law, and tech nerd

Execution is what is critical, not necessarily the idea or some 50 page written research paper.   However, I completely disagree about not having a business plan as the process of writing a business plan is to go through the process of thinking through how to execute on and monetize your idea.   It is true things will change from your original plan hundreds of times, sometimes in a single month, but not having something you can look back at to see where you are and where you plan to go in your company's life-cycle can be a huge detriment. 

The business plan is not a fixed document and will be modified many times, so entrepreneurs should keep an open mind to adjusting their strategies.  For me (and many investors, banks, potential business partners), if you haven't thought through all possible challenges and strategies, you may be nothing more than someone who makes a great motivated new years resolutions to lose 20 pounds, joins a gym, and quits going after a few weeks.  You didn't have a detailed plan (hire a trainer, journal what you eat, pre-plan your meals) and were not able to follow it.  Most investors will probably not read through a full business plan (which is why it is good to have an elevator pitch, short presentation, and written executive summary), but they want to see that you have one so that you can prove you actually have thought through a plan and how to execute on that plan.

Yes, you can succeed without one, but you are doing yourself and your stockholders a disservice in not going through the planning process.  If you don't think successful companies write business plans, read through a 10-K, 10-Q, S-1, or similar SEC filings and you will find it is pretty much a business plan.

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