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Comment by sillysaurusx | Hacker News Reader

If all business plans were as thorough and as revealing as YC’s application forces you to be, then YC would have called it one. But there’s a separate name for a business plan. Most are useless.

I suspect pg is referring to the plans founders make to impress investors, rather than to figure out which problems to solve.

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This is all just semantic nonsense. YC has no more profound understanding of the noun "business plan" than anyone else in the business world. Don't overthink it

To be fair, there is a pretty concrete idea of what a traditional business plan looks like. Traditional business plans are needed if you want a small business loan from a bank. If you try to get a small business loan from the bank with a YC application, you'll get laughed out of the bank. A YC app is quite different from a business plan and most people would not see it as the same thing.

In a prior life as a regulator I read formal business plans (legally required) which probably looked quite different from what you're talking about. It's a generic noun used in various business contexts.

The business plan for a startup pitching to a VC will look different than the plan an SMB submits to a bank

I assure you its very different from the vast majority of business plans out there. Here is Dropbox's YC app:

https://www.ycombinator.com/apply/dropbox

Well, that business plan looks fairly similar (albeit more detailed) to the legally required plans I used to peruse as part of my old job. I've never been a banker so I don't know what the business plans you're talking about look like

I do think the plan you linked to is more thorough than what the majority of SMBs will be writing. YC is another league of finance. Most SMBs I know are not very sophisticated

That's interesting. Do you mind sharing an example of what you worked with?

I don't think they're public - it was just a narrative business plan (under a section titled business plan) required when an insurance company submitted an application for a license to sell insurance in the state of Alaska. Each state has similar requirements (NAIC model law).

It also included a background check on the management IIRC

Can you link to an example SMB business plan? I once tried to help a neighborhood grocer with financing and I can assure you they weren't writing a sophisticated business plan.

And YC isn't a venture capitalist or angel investor either: it is a company that provides funding and advice to startups.

> This is all just semantic nonsense.

No it's not. The point is that what most start-ups submit as a "business plan" is just a load of b.s.

The questions that are asked in the YC interview draw out the information that _should_ be in a business plan.

A typical 'deck' will cover all of these, and a typical deck has about as much relation to what will happen later on as most business plans do, ie: none whatsoever.

In most cases though YC applications are meant as a way to evaluate the team, not the business and that's where the difference lies between the data they collect and what your typical business plan shows, even if there are superficial similarities the goal is an entirely different one.

I think PG & Co would invest readily into a fantastic team with a crappy business plan knowing full well that they are effectively already investing in the first - or second - pivot.

For them it doesn't matter: people driven to succeed will try to do so one way or the other and have a leg up on people that are not like that.

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