Jason Sherman

In this episode of Strap On Your Boots, I explore why I’ve stopped treating five-year business plans as predictions of where a company will actually end up. After years of building startups, I’ve learned that customers, technology, competition, and entire markets can change faster than any spreadsheet can anticipate. I share how Vengo AI evolved from consumer to B2B SaaS to enterprise, why I now plan more specifically for the near term, and how founders can balance having a long-term direction with staying flexible enough to respond when the market tells them something new.

Listen to the podcast episode here:

Get ready to strap on your boots. I’m your host, Jason Sherman. And today I want to talk about how differently I plan a business today compared to when I first started building companies. I still plan quite a bit. I have documents everywhere, spreadsheets, projections, product roadmaps, research, notes from customer conversations, and folders full of ideas that I may or may not pursue. What has changed over the years is how much confidence I place in anything that tries to tell me exactly what a company is going to look like three or five years from now.

I remember when writing a traditional business plan felt like one of the first things you were supposed to do if you were serious about starting a company. You’d sit down and describe the product, research the market, analyze the competition, figure out your pricing, estimate expenses, and eventually create financial projections showing how the business would grow over the next several years. I did this myself, and at the time I found the process useful because it forced me to think through parts of the company that I might otherwise have ignored. If I thought we were going to have a certain number of customers in three years, I had to work backward and consider how we might actually reach them.

The strange part was how specific some of those projections became. You could be sitting there with a product that barely existed, maybe with a handful of users or no customers at all, and somehow you’d have a spreadsheet estimating revenue in year five. I remember working on projections like that and trying to make them as realistic as possible. I’d estimate how many people might sign up, what percentage might become paying customers, how much we’d charge, what our expenses would be, and how the team might grow. Eventually you had this very professional-looking document describing a company that didn’t exist yet in a market that was probably going to change before you ever reached those numbers.

I don’t think doing that work was a waste of time. It taught me how to think about the mechanics of a business. I had to understand where revenue would come from, how much growth would be required to support the company, and what kinds of expenses we’d encounter along the way. What I’ve become much more careful about is treating those projections as if they’re a reliable picture of the future. After building enough companies, I’ve seen how quickly the assumptions underneath them can change.

Even fifteen years ago, the environment felt different to me. Building a software platform usually required a substantial commitment before you could learn very much from the market. You needed developers, servers, designers, and enough time to get a usable product in front of people. Once you had invested all of that effort, changing direction could be expensive, so there was a practical reason to spend more time planning before you started.

Today I can test an idea much earlier. I can create mockups, build a prototype, put up a landing page, talk to potential customers, and sometimes get a working version of a product into people’s hands without making the kind of investment that would’ve been required years ago. That has changed the way I think about planning because I can replace some of my assumptions with actual information much sooner.

The market itself also seems to move faster. I’ve watched technologies appear that changed entire categories of software within a couple of years. I’ve seen social platforms become incredibly important for businesses and then change their algorithms in ways that completely altered how companies reached customers. Advertising costs change, consumer habits change, competitors show up with different pricing models, and sometimes something completely outside of business disrupts everyone’s plans at once. The pandemic was probably the clearest example of that in my lifetime. Imagine sitting in 2018 creating a detailed five-year plan and trying to predict what your customers would be doing in 2020 or 2021. There was simply no spreadsheet that could’ve accounted for what actually happened.

That experience stayed with me because it made the uncertainty very visible, although smaller versions of the same thing happen constantly in business. A competitor releases something you didn’t anticipate. A customer starts using your product in a way you hadn’t considered. A new distribution channel appears. Something you expected people to care about gets almost no response, while a feature you considered secondary becomes the reason people are willing to pay you.

I’ve had enough of those experiences that my planning has gradually moved closer to the present. I spend much more time trying to understand what I can learn over the next few months and less time trying to describe exactly what the company will be doing several years from now. I still want a sense of where we’re heading because without some direction it’s very easy to chase every opportunity that appears. I just leave considerably more room for the possibility that the information I have six months from now may change what I think we should do next.

That shift took me years to become comfortable with because there’s something reassuring about a detailed plan. It creates the feeling that you’ve thought everything through and can see the road ahead. After enough time running companies, I’ve become more comfortable admitting that I can usually see part of the road, and that’s often enough to make the next decision.

A good example of this for me has been Vengo AI because the company we’re building today isn’t exactly the company I would’ve described if you’d asked me about it several years ago. The underlying technology and the problems we were interested in solving were there from the beginning, but our understanding of the customer changed as we actually put the product into the market. Initially, we were much more consumer focused. We thought individuals would use the platform directly, so naturally a lot of our early decisions were based around that assumption.

Once people started using it, we began seeing interest from business owners who looked at the technology differently. They were thinking about how it could help their companies, how it could interact with customers, and how they could incorporate it into things they were already doing. Those conversations gave us information that we couldn’t have gotten from sitting around a table trying to predict the future. We had real people showing us where they saw value, and over time that led us toward a B2B SaaS model.

Then something similar happened again as we got further into the market. We started having conversations with universities and larger organizations, and those conversations were different from the ones we’d been having with smaller businesses. The problems were larger, the use cases were more specific, and the economics of the relationship were completely different. A small business might look at a monthly subscription and decide whether another software expense fits into its budget. An enterprise organization might be trying to solve a problem across an entire department or institution and be willing to invest significantly more if the platform can address it properly.

If I had written a rigid five-year plan at the beginning and treated it as something we were obligated to follow, I could’ve easily spent years trying to make the original consumer model work. Maybe we would’ve continued spending money attracting individual users, adjusting subscription prices, and improving features designed specifically for that audience because that’s what the plan said the company was supposed to become. Meanwhile, some of the most interesting opportunities would’ve been sitting right in front of us.

I think this is where planning becomes complicated for entrepreneurs because there’s a natural tendency to become attached to the work you’ve already done. Once you’ve spent months researching a market and creating projections around a particular business model, changing direction can feel like you’re admitting the original idea was wrong. I’ve had to get much more comfortable with the idea that the original assumptions were based on the information available at the time. Once better information becomes available, I want to be able to use it.

At the same time, I’ve also seen what happens when founders go too far in the other direction. If every conversation causes you to rethink the company, you can spend years moving from idea to idea without giving anything enough time to develop. Customers will sometimes ask for features that are useful only to them. A potential partner may suggest entering a market because it happens to benefit their business. Someone you respect might tell you that your pricing should be completely different. All of that feedback can be valuable, but I’ve become more patient about looking for patterns before making a significant change.

Usually, I want to see the same signal coming from several places. If multiple customers independently describe a similar problem, sales conversations keep running into the same obstacle, or a particular type of customer consistently shows more interest than the audience we originally expected, then I start paying closer attention. At that point, changing the plan feels less like reacting to an opinion and more like responding to evidence.

This has also changed the way I think about financial projections. I still create them because they’re useful. If I’m considering a business model, I want to know what the economics could look like. If a product costs fifty dollars a month, I can calculate how many customers we’d need to reach a certain level of revenue, what acquiring those customers might cost, and whether the numbers make sense given the size of the market. That exercise can expose problems with an idea very quickly.

Where I become skeptical is when those calculations extend several years into the future and start looking increasingly precise. If a spreadsheet tells me we’ll have 7,842 customers in year four, I know that number is really the result of assumptions stacked on top of other assumptions. Change the conversion rate slightly, increase customer acquisition costs, introduce a competitor, adjust pricing, or lose more customers than expected, and suddenly the projection looks completely different.

I’ve had investors ask for those numbers, and I understand why they want them. They’re trying to understand whether I’ve thought seriously about how the company could grow and whether the business has the potential to become large enough to justify the investment. I don’t think anyone experienced in startups truly believes that the number sitting in the year-five revenue cell is going to turn out exactly as predicted.

What matters to me is whether the assumptions underneath that number make sense.

Over time, I’ve started thinking about a five-year plan more like a direction than a set of instructions. I may have a pretty good idea of what I want the company to become and the kind of market I want us to serve, while leaving the path flexible enough to respond to what we learn. The closer something is to the present, the more specific I can reasonably be. As I look further ahead, I become increasingly comfortable with leaving some of the details unresolved, because experience has shown me how much information I simply don’t have yet.

The way I plan now tends to reflect how far into the future I’m looking. I can be fairly specific about what I want to accomplish this month because I know what projects are active, which customers we’re talking to, what the development priorities are, and what resources we have available. I can also make reasonable plans for the next quarter because most of the information those decisions depend on is already visible. Once I start talking about next year, I still have goals, although there’s naturally more flexibility around how we’ll reach them. Five years from now, I’m thinking much more broadly about where I’d like the company to be and what kind of opportunities I’d like us to have.

I’ve found that this gives me enough structure to make decisions without creating the expectation that I should somehow know everything that’s coming. If I’m deciding whether to hire someone, invest in a new feature, pursue an enterprise customer, or spend money on marketing, I can evaluate that decision based on what I know about the company today and where we’re trying to go over the next year or so. I don’t need to pretend I know exactly what the market will look like in 2031 in order to decide whether something makes sense in 2026.

There are also practical reasons I still think long-term planning matters. If I’m building a company that I eventually want to sell, raise capital for, or grow into a larger organization, the decisions I’m making today should support that possibility. The same applies to hiring. If I know that a certain part of the business is likely to become increasingly important, I can begin developing that capability before it becomes urgent. I can think ahead without locking myself into a sequence of events that depends on everything unfolding exactly as expected.

I probably approach this differently because I’ve lived through enough plans that went in directions I couldn’t have predicted. I’ve launched products that attracted completely different customers than I expected, watched technologies change while we were still developing around them, and had business opportunities appear through conversations that weren’t even on my radar a few months earlier. I’ve also had plans that looked promising for a long time and eventually went nowhere. Those experiences made me more comfortable separating preparation from prediction.

That distinction has become useful outside of startups too. Filmmaking is a good example because I can spend months preparing a documentary, researching the subject, scheduling interviews, figuring out locations, estimating costs, and thinking through the story I believe I’m telling. Then I sit down with someone for an interview and they tell me something I didn’t know, which leads me toward another person, another piece of research, or an entirely different part of the story. I still needed all of that preparation to reach that moment, but I also needed enough flexibility to recognize when the project was becoming more interesting than the version I had originally planned.

Running companies has started to feel similar to me. I want to know the subject well enough that I can recognize when something important is happening. That requires research and preparation because without them, every new opportunity can look equally exciting. The experience I’ve accumulated helps me decide which changes deserve a response and which ones are probably temporary distractions.

I also think there’s a psychological benefit to allowing plans to evolve. Earlier in my career, I sometimes interpreted a change in direction as evidence that something had gone wrong. If the business model changed or the customer turned out to be different from what I’d expected, I would spend time wondering why we hadn’t figured that out earlier. I’ve become much more accepting of the fact that certain information only becomes available after you’ve started. There are things customers can’t tell you until they actually use the product, and there are things you can’t understand about a market until you’ve spent enough time trying to sell into it.

So I still make plans, and I probably always will. I enjoy thinking ahead, researching possibilities, running numbers, and imagining where a project could eventually go. I just hold those ideas more loosely than I used to.

If I were starting another company tomorrow, I’d want to understand where I hoped it could be several years from now, but most of my attention would stay on what I could learn during the next few months. I’d want to get something in front of real people, listen carefully to how they respond, understand who’s willing to pay for it, and let that information influence what I build next.

Five years is still useful to think about because it gives me a horizon. I just don’t expect to see every detail between here and there anymore. After doing this for as long as I have, I’m actually more comfortable with that uncertainty than I used to be. I can have a destination in mind, make the best decisions I can with the information available today, and leave enough room for the company to become something I haven’t thought of yet.