Business strategy is the easy part.
People tend to over-glorify business strategy as if its this mystical gift that only a select few people possess. And those who’s businesses succeed must be impeccable business strategists. Only this leaves out a few factors: one is luck. 1 in 10 startups succeeds, a 10% success rate! That one business might in fact be a great one with a fine business strategy, but there is absolutely luck involved in a successful startup, particularly the unicorns. Only it is our tendency to take credit for our successes and point fingers outward from our failures. Privatize wins; publicize losses like Wall Street in 2008.
A poor business strategy may not be the culprit in why a business failed. They could have run out of money. They could have made a product that never found a market for it. They could have never listened to customers. Their timing could have been off (too early / too late). Business strategy is but one of these factors. And likely the easiest one to fix should it be proven incorrect and the startup has to pivot.
The best business model is a simple business model. Business model generation is not hard nor complicated. If it’s too complicated, you’re doing it wrong. Wisdom loves simplicity. Plus, we can always test and try, run experiments. You’ll never know for sure until you test it. We are poor predictors at what our customers will best respond to. The only way to know is to test it. Your business model needs tweaking if your customers windup hating you. Plus, why build a business where your customers hate you? That’s poor business strategy! Duh.
While it is no guarantee of success, why not determine who you’re going to be first? Why not determine what your startup will stand for and what it will stand against? Why not determine exactly who your target market is, and the problem you seek to solve for it immediately? Why not determine whether generosity will be a value here? Why not decide in advance how we will treat each other and our customers ? These are all determined to help you shape your culture. And while having a great culture is not a guarantee of success, it does shape who we seek to become and how we decide to treat people. While that sounds so basic — it is basic — it becomes lost in the messy, emotional days of the startup. Plus, culture, above even strategy, helps guide decision-making and behavior. People will know how to behave based on who we seek to become. It is culture — not ’sexy’ strategy — that guides us forward.
Why is that?
Because behavior doesn’t always follow strategy. But behavior nearly always follows and aligns with culture whether healthy or toxic. Only the iconoclast clashes with culture, and they do so willingly. Strategy outta simply be a subset of our Culture. If we break with our Culture we all agreed upon, we need to seriously re-evaluate who we are now and where we see ourselves going. For if we break with our culture, why should people trust us? And trust is everything.
So strategy, while important, isn’t the be-all, end-all for businesses. Plus, it needs to be flexible. It needs to shift. If it can’t be flexible, then the business will falter. Strategy has to flex with the shifting market. Or else it won’t work effectively. What was a great strategy even three years ago might be a terrible strategy today. Which is why a focus on the market needs that don’t change is actually a great strategy!
# The #1 Leadership maxim of all time.
The ironic thing about the company offsite — where executives go sit in lavish meeting spaces and hammer out the latest, greatest business strategy — is that just because you change a strategy, doesn’t mean that the people will all be on board. No. People support what they help to create. Don’t forget it! So, it is best if they have a say in the discussions. The fact that people support what they help to create outta be leadership lesson #1, 2, and 3, respectively. It is best to involve others, get their opinions, actually make them feel heard. Then they will have buy-in to the new strategy instead of feeling like it is simply being shoveled onto them from above. Involving others is such a simple act, and I bet you’re not doing it. When you don’t involve them, they feel like nobody cares what they have to say. (Are they right?)
Culture asks who are we going to be today? Strategy asks how will we best do it. How we will best accomplish it is preceded by who we are going to be today. Who trumps how. No offense to how, but there’s a lot of how out there. There isn’t a lot of ambitious Who out there. Maybe 2%. Maybe. The right Who can figure out any how. Only the really thoughtful, creative, prescient Who will persist with any how, even pivot as necessary.
A diversified, tight startup culture ought to be able to start multiple businesses in its space, not only one. Serial, successful Entrepreneurship proves this. Some successful Entrepreneurs just cannot help themselves. They have to stay in the game. To be out of the game, to ‘retire,’ is to be put to pasture. C’mon! It turns out to not be 100% about the money.
You really see this post acquisition. Founders rarely stick around for long. They’re onto the next startup venture. Who can blame them? Founding companies is WAY more fun and exciting and terrifying and engaging than working for the big, bloated org post acquisition. You just have to know which one you want, which one you have the stomach for.
# Try this for business strategy.
Instead of executives and founders being obsessed with strategy, they outta be obsessed with creating a positive, helpful, Creative Culture within their org. If you take care of culture, you take care of your people, which take care of customers, which takes care of your strategy. If your whole business strategy is simply customer success, you’re onto something big. For if business strategy isn’t guided by values, by what we claim to hold dear, such as customer success, then what are the values for anyway?