Ask HN: Please trash my business plan (non-tech) | Hacker News Reader

Ask HN: Please trash my business plan (non-tech)

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13 pointsanigbrowl20 comments

This is a television show I have become involved with. My expertise is on the production & post production side - the logistics of planning, shooting editing and delivering video. Business and raising capital, not so much.

About half of this is mine; the original was much more sale-sy and less business-y. There are two of us, the host/creator has sunk a lot of equity into it, it'sa good product but it needs recapitalizing. I've been working free on this for the last month. I suck at business; I need to be the CTO and manage the manufacture and delivery of the product, which is plenty of work for one person.

For confidentiality reasons, I've left out the financials. In brief, we're looking to raise up to $500k and thinking of a 10-15% risk premium with full recap in 3-5, plus 1-2% of net. I think YC people are honest enough that I feel safe to post it here.

Thank you for your time. Anything from 'tl;dr' to longer critiques would be welcome. If you prefer, email me at eddy@entertainingpeople.com. If this is inappropriate for YC, feel free to say that too.

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Are you sure you want us to do this?

We are in the start of the greater depression, the yuppies you want to sell to no longer have money. Wine, travel, Lifestyle/keeping up with the jones' is now considered tacky.

Business plan trashed. Sorry.

Calling any business that caters to a middle or upper middle class lifestyle tacky seems a little short sighted to me. Yes, times are rough and people are currently cutting back on this kind of thing because this sector of the economy is heavily affected by business cycles. The timing might not be the best, but that isn't to say that in the long run this type of business can't succeed, or maybe even succeed to a lesser extent in the short run. I mean, what kind of entrepreneur would you be if you thought that your business was only viable during booms.

I must admit my feeling is that it is tacky, too. Of course that doesn't imply that there is no market (I don't know).

But come on: adventure, but at the same time drinking the best wine and food and probably driving around in a really comfy car. What kind of adventure is that? A tacky kind...

I can only say that it doesn't appeal to me at all, I am more into creating things than consuming things (travel can be very passive, sort of like TV, only that you move around yourself instead of the image moving).

I disagree. There will always be yuppies who have money. In times of depression they are the least effected group (relatively).

Normally I would agree. But the circumstances of the current depression are different. There was such a bubble in the middle classes due to living on credit that the yuppies in particular will be hit very, very, very, very hard. See AMEX's recent earnings conference call for details.

The fact is that for years people were living the life not based on real earnings, but on credit. And those that were living on real earning were often earning money from those who were spending on credit. When credit goes away as it has, both groups become poor. Hence yuppies become poor.

The price deflation of mid/upper range houses, bmw's, audi's, hotel rooms, travel, wine and jewlery shows this clearly.

PS: Could you please provide some proof that yuppies fair well in depressions/recessions? My evidence suggest they're usually the ones in the middle of whatever bubble activity. As is certainly the case currently.

EDIT: Added extra Very's for emphasis.

Nine out of ten yuppies, or more, will make as much money in 2009 as they did in 2008. They can still afford their mortgages. Consumer confidence aside, tell me why they're going to suddenly stop shopping at Whole Foods, buying organic, drinking wine, and otherwise displaying upper middle-class tastes in food consumption.

Yuppies are being absolutely pounded. They can't spend on credit or rely on an ever increasing stock market to fund their lifestyle. Please provide proof that 9/10 yuppies will be fine. I don't buy it for a second. I've got my own analytics which suggest otherwise.

Consumer savings rate going up. http://www.creditloan.com/blog/consumers-saving-instead-of-s...

bmw sales plunge http://silverscorpio.com/bmw-reports-plunge-in-sales-as-econ...

wine sales plunge http://wineindustryinsight.com/?p=2073

hotel occupancy off 11% http://feedproxy.google.com/~r/CalculatedRisk/~3/-j6_abqDrqc...

housing delinquencies move into prime. http://feedproxy.google.com/~r/MishsGlobalEconomicTrendAnaly...

Those numbers are all across the entire population, while this site is only aiming at the high segment. The question is whether sales of the BMW X5, St. Emilion Grand Cru 1986 and the Bride Suite of the Ritz have also dropped.

Hamptons real estate high end enough for you? http://nymag.com/daily/intel/2009/04/hamptons_real_estate_ma...

Same thing going on in other (supposedly) rich peoples enclaves. and yes, High end champange's have been hit. As has the bride suite.

Now, the true high end market has not. But those people are not even watching your shitty cable tv show. They'll be calling quintesentially[1] and telling them to book a vacation.

I should also note that Bentley sales are down. But not across the board. Only the new-money models - continental gt/flying spur. So everything aspirational from your low end bmw 3-series, all the way up to your nouveau riche Bentley's are being slammed.

I don't have room to post my full analysis - I have actually run serious numbers on this. But the yuppie/aspirational class are really, seriously getting smashed. I would not start a business based on their greed and consumption right now.

Now would be a fantastic time to start a do-it-yourself channel or travel/luxury on the cheap.

[1] http://www.quintessentially.com/

Thanks - no need to apologize. I do think you overlooked 2 things (or I didn't bring them out strongly enough):

1- entertaining doesn't have to be expensive to be impressive 2- throwing a dinner party or a garden party is a cheap and effective way to network

But your point is well taken.

Then you need to rebrand your program. Anything that even slightly has the smell o "lifestyle" is tacky these days. It is not cool to be aspirational these days.

As I mentioned a do-it-yourself or travel/luxury on the cheap program would be fantastic right now. Sell it as such.

Keeping up with the jones' is over for at least a decade.

Agreed. The program is overtly cost-conscious and I've made a lot of changes to bring out the 'caring and sharing' values of having guests to dinner rather than the aspirational ones. all the feedback from you and others has been studied carefully, and gratefully.

Not a critisism, but a question: why are you paying a return on investment funds from before they are drawn? I'm curious - was that based on a precedent?

There is no revenue to speak of at present. Also, that's what I inherited.

People like Dave McClure and VentureHacks have always said keep your business plan short: 1 page.

A 1 page pitch for your StartUp definitely is something worth thinking about and maybe also writing down.

But if you don't have THE idea a longer business plan is necessary from the beginning. And in general, in later stages 1 page probably won't help you to plan your business and therefore more is needed for sales prediction, Strategy, the marketing plan, HR policies etc.

The point behind having a business plan isn't to have a business plan, but to think through all of the necessary aspects of your business.

Whether you write all of that down in a long document or condense it into Powerpoint slides for a pitch is irrelevant. The point is that you have thought about the big picture, as it is clear that this team has.

SF resident, haven't heard of the show or the host. Website at entertainingpeople.com looks like incomplete brochureware (several empty/under-construction pages).

Payback formula of 1% (or is it 1.5%) of revenues and 10% interest seems complicated... not-quite-equity and not-quite-debt... offers capped upside but possibility of 100% loss.

I agree 100% on the website. The dead pages are due it being recently hacked/restored :-( But it's very much brochureware. I've had a lot of resistance to changing that, but your comment helps a lot.

summarize to one page and repost! I promise to give feedback then: mingyeow@gmail

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