Stay ahead of everyone else with a bit of strategic thinking
While a startup journey starts with an idea, building and growing a startup requires a thorough strategy. Your strategy is your compass and map to navigate your entrepreneurial journey.
I thought of covering here some of the basics. Unfortunately, many entrepreneurs lack a strategy to focus their efforts and position their companies.
Why do you need a strategy?
At the surface, entrepreneurs might be perceived as agents of disruption. However, in reality, they are accelerating or surfacing a developing disruption. As a result, they make the inevitable future happen faster.
As an entrepreneur, you need to develop abilities to see mega changes and separate them from the noise. Your goal is to align your goals and desired outcomes to the market forces and the inevitable upcoming changes. You want to ride one of the massive tides in the market. Or, as one of my mentors once told me, harvest the free energy in the market to generate the escape velocity.
A strategy will protect you from being overwhelmed by the many possible things you can do. It will help you to eliminate the less impactful moves from your plan and focus on what you believe will bring value to your startup.
What is a strategy?
Researchers and theorists are constantly coming up with different definitions of a strategy. But in our context and in simple terms, a strategy is your attempt to get desirable ends with available means. You do so by building a system of finding, formulating, and developing a doctrine that will ensure long-term success if followed faithfully. In addition, you want to deliver a unique mix of value with your activities and moves, i.e., the strategic choice you make for your own company.
Does a strategy contradict being flexible and agile in your movement?
Formulating a strategy does not contradict the basic practices of moving fast and finding the product-market fit. Instead, your strategy will guide those moves and ensure that your efforts will eventually lead to a mega win and massive opportunities.
A strategy is about why you are doing what you are doing. It makes sure that every move adds a piece to your puzzle. It creates a system to make tactical decisions quickly, efficiently, and with the least amount of confusion. A strategy also opens up the door for your team to innovate on the execution of this strategy. You will keep the coherency of actions and movements.
What are the building blocks of a strategy?
The definition of a strategy dictates its building blocks. I see the best book that talks about building a proper strategy is The Art of War by Sun Zue. Sun Zue defines a conflict between two opposing forces (think of your startup and the status quo) governed by five main factors. Understanding them and using available resources to exploit these factors in your favor are critical to a successful strategy. These factors are:
Purpose, which is your moral imperative. It is the scope of what you are doing and why you are doing it. It is the reason why others follow you. This factor stems from the entrepreneur’s beliefs, character, and what triggered them to build a startup.
Landscape is a description of the environment you’re competing in. It includes the position of troops, the features of the landscape, and any obstacles in your way. The ability to see the landscape is critical to developing and keeping in your sack since change is accelerating daily. You will constantly need to assess the market and identify what is changing, and it is still there despite the noise that suggests otherwise.
The Climate, describes the forces that act upon the environment. It is the patterns of the seasons and the rules of the game. These impact the landscape, and you don’t get to choose them, but you can discover them. It includes your competitors' actions and other forces in the market that keeps changing the perception of your customers, partners, employees, and investors.
Doctrine is the training of your forces, the standard ways of operating, and the techniques that you almost always apply to win the war or change your position. These are the universal principles, the set of beliefs that appear to work regardless of the faced landscape. Jim Collins called these in his Good to Great the SMaC recipe (Systematic, Methodical, and Consistent). These are the set of strategic rules that you decide to apply and define your company’s operational strengths.
Leadership is about your chosen strategy, considering your purpose, landscape, climate, and capabilities. It is to “the battle at hand.” It is context-specific, i.e., these techniques are known to depend upon the landscape and your purpose. It requires you to adjust according to these changes. Ben Horowitz, for example, classified CEOs actions and strategies according to the war and peace times of the startup. The landscape and the Climate your startup has to compete in define whether you are in wartime or peacetime.
A strategy is a living and evolving piece of your startup. With the changing landscape and climate, you need to reconsider your doctrines and leadership strategies constantly. It all starts with formulating a proper situational awareness, which will be the topic of my next article.