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> It is difficult to believe that a business plan is useless. It provides a framework for evaluating a business and its progress. They all show hockey-stick gr

> It is difficult to believe that a business plan is useless. It provides a framework for evaluating a business and its progress. They all show hockey-stick growth up and to the right. Not many businesses succeed by that measure. And the goal of a lot of business plans is not to plan a business, but to plan to get funding. Big difference. And a lot of businesses pivot after realizing they were totally wrong. > If the plan is wrong, an underlying assumption is incorrect. Incorrect, or made up. Nobody has perfect information beforehand. Both Juicero and WeWork were known to be business failures from the earliest days, by people who didn't even have to read any financial reports.

rjyoungling 6y ago
In fairness, silly ideas can work. Take Dyson, Nespresso, or Red Bull for example. I think it's tempting to succumb to hindsight bias. I'm sure that had Juicero succeeded and become the Apple of juicing, people would've been saying how obvious it was.
- redis_mlc 6y ago
  I thought of those. Nespresso has a restaurant-grade product that competes favorably with Starbucks at a querter of the price. Red Bull is kind of a sleep replacement/stimulant, which a lot of people needed pre-corona. Americans somehow were willing to sacrifice their sleep for their job/commute. Dyson vacuums - that I can't explain. Maybe their high prices signal them as better quality. Maybe somebody can explain that?
  - rjyoungling 6y ago
    I have some ideas but it's always a bit dangerous because it's easy to make up stuff ex-post. But I think that you nailed the first two. Red Bull offered an alternative to coffee and the market was lightly validated in rural Thailand. You had Krating Daeng in 1975 but it didn't really take off until they started sponsoring fighting. (It had a bit of a status problem.) Nespresso, in addition to what you said about essentially changing the price architecture, also enhanced simplicity. A simple pod allows you to have a good cup of coffee quickly. I think that Dyson was appealing because of the same enhanced simplicity as Nespresso. You didn't need bags anymore. I also think there's some cognitive thing happening where people derived pleasure from seeing their mess by hovered up inside the machine. And like you said, status could also play a role here. They've created the perception of being an Apple of boring household appliances.

rjyoungling 6y ago

In fairness, silly ideas can work. Take Dyson, Nespresso, or Red Bull for example. I think it's tempting to succumb to hindsight bias. I'm sure that had Juicero succeeded and become the Apple of juicing, people would've been saying how obvious it was.

redis_mlc 6y ago
I thought of those. Nespresso has a restaurant-grade product that competes favorably with Starbucks at a querter of the price. Red Bull is kind of a sleep replacement/stimulant, which a lot of people needed pre-corona. Americans somehow were willing to sacrifice their sleep for their job/commute. Dyson vacuums - that I can't explain. Maybe their high prices signal them as better quality. Maybe somebody can explain that?
- rjyoungling 6y ago
  I have some ideas but it's always a bit dangerous because it's easy to make up stuff ex-post. But I think that you nailed the first two. Red Bull offered an alternative to coffee and the market was lightly validated in rural Thailand. You had Krating Daeng in 1975 but it didn't really take off until they started sponsoring fighting. (It had a bit of a status problem.) Nespresso, in addition to what you said about essentially changing the price architecture, also enhanced simplicity. A simple pod allows you to have a good cup of coffee quickly. I think that Dyson was appealing because of the same enhanced simplicity as Nespresso. You didn't need bags anymore. I also think there's some cognitive thing happening where people derived pleasure from seeing their mess by hovered up inside the machine. And like you said, status could also play a role here. They've created the perception of being an Apple of boring household appliances.