Why startups miss their projections

Met with my  friend the other day - and I tried desperately to prove to him how bullet proof our startup's (pretty ambitious) financial projections are for the next few year. He is probably one the wisest guy I know - so I thought of writing down the points he made and all the points I thought of after thinking the points he made.

So here are the reasons why founders projections/forecasts fail

• Murphy's law in projection - making your projections more conservative does not decrease the odds for a bad year
• 1 out of 4 years is going to be flat - for random reasons
• Dis-economies of SW scale
• As your company grows - a significant amount of product development (compared to what anticipated) is spent in infrastructure/refactoring, ie not your direct business value generating roadmap
• As your software grows your ability to grow features at a *flat* pace declines - unless you expand disproportionally your R&D staff
• Dis economies of organization scale - or "Trees only grow from the root/top down law"
• People always underestimate \the need (and time taken) for top down mgmt expansion in order to achieve the expected lower level organization growth,
• The people that are needed to drive the roadmap change are needed to recruit, hire, train the people above. It is not possible for the company to both expand and improve its operations.
• The less expensive someone (remote is not an exception) you hire the more time you need to spend training them, both in terms of % of your time you need to devote to them as well as total time it will take them to reach a certain level
• Murphys law for how much time fundraising will take : more than what you will have
• Fundraising takes time that is inversely proportionally to how much time you have. If things are easy (and thus you have ample time to do fundraising - you wont need time to fundraise). If you are in a tight spot, fundraising will magically become very time-consuming.
• Competition
• Projections assume no competition change. The only way this will happen is if you fail to execute: if you achieve your growth goals this year, you need to take for granted that the year after that you will find imitators.
• You should not assume that competition will steal your bread. You should assume that competition will slow you down and make you expand energy/money.
• Competition is often affecting you in unexpected ways. It cost you $/time in replacing stolen key personnel, more expensive ads, marketing fine tuning, brand iterations, time spent with investors, customers, partners explaining why you are better than X as opposed to truly telling your story.
• Competition in spite of being 2 yrs behind often has a louder/more influential investor or board member or CEO or marketer/influencer. Competition is going to be better than you in sth (since they are worse in many other things - for them to be able to get off the ground)
• Competition will not follow your path. Successful companies succeed not because of what they planned to do but because they were flexible to understand upsides and make quick turns along the way to go after them. Your first pitch deck as a founder has all these examples of upsides you don't focus right now but may become relevant in the future. With every year that passes some other startup will chose each one of the upsides and make it the path they are are focusing on - you will not even call them a competitor - you will just remove that "upside" point from the deck before anyone notices. If you are a bit slow to grow, pretty soon all that is left for you is exactly what you planned and nothing else :-|. when this happens its going to be more than a big projection miss.