Cowboys and Indies
I had a fascinating discussion with Daniel Jalkut this weekend about indie business plans, compared to startup company business plans.
We chatted for quite awhile, but the point that really emerged from the discussion was this:
Startups and indies may have the same long term goals, but the paths they take to get there and the fundamental assumptions they make are wildly different.
Successful indies look for initial products that are comparatively simple and lucrative. Startups tend to work towards plans that are, at some point, going to take the world by storm. The reason for this difference is pretty straightforward: the indie needs a way to keep things going so that they can grow their business and work on cool stuff later. Startup business plans are usually dependent on investments from angel investors or venture capitalists to be successful.
For the startup this changes the entire dynamic of what they’re trying to do. Simplicity has to take a back seat to growth potential. You must have some explicit plan to put your product on the road to global domination or no investor is going to want anything to do with it.
Consequently, this makes the odds of the startup surviving very small. Rather than working on something simple that will keep a roof over your head, startups are always looking for something that will turn an investor’s head. This usually also means a plan that is difficult, risky, and not likely to turn a profit for quite some time.