Anyone who has done an MBA, or even those who haven’t, would have regularly come across the word ‘strategy’. In fact, at one point of time, during 2005-2007, I used to mull over the fact that in the corporate world ‘strategy’ is the most commonly used word – strategic thinking, what is your strategy, my strategy, etc. Sooner, rather than later, we all as startups, too, realise the importance of having a strategy to run and grow our businesses.
While I am not an expert on strategy at all, I would like to share my learnings with you, based on the observations of the external environment, businesses in operation and also from who went out of operations, and most importantly, learnings gathered while running my own startup. This is a part of a series on ‘Startup Strategy’.As Wikipedia states, “Strategy originates from a Greek word (Greek ‘στρατηγία’ - stratēgia, ‘art of troop leader; office of general, command, generalship’) and is a highlevel plan to achieve one or more goals under conditions of uncertainty.” So, strategy, in the context of a startup, will revolve around the decisions the ‘troop leader’, which will here mean an entrepreneur, will take in an uncertain environment to create wins for his or her venture.
In the book, ‘Playing to Win: How Strategy Really works?’ the authors, A.G. Lafley and Roger L. Martin, put forward a cascade of choices that will help define your strategy. Here are the questions that they put forth which will frame your venture’s strategy:
1. What is our winning aspiration? (the purpose of the enterprise, our guiding aspirations)
2. Where will we play? (the right playing field: where will we compete, our geographies, product categories, consumer segments, channels)
3. How will we win? (the unique right to win: our value proposition, our competitive advantage)
4. What capabilities must be in place? (The set of capabilities required to win, our reinforcing activities, our specific configuration)
5. What management systems are required? (the support systems: systems, structures and measures to support our choices)
According to the authors, strategy is about choices, choices that uniquely position a firm in its operating industry to create sustainable advantage and superior value, relative to the competition.
In a startup, this becomes hugely relevant, because most of us as entrepreneurs are busy running our ventures. Every day, we deal with fire-fights; and, every day, we have innumerable choices to make. Decisions are more often than not impromptu, priorities keep changing, and we are on the run always. In this run, do we have a clear strategy which underlines the very existence of our ventures and our focus? After all, strategy has to originate from the leader at the helm of his or her venture.
Let me share with you how I faced the second question posed above (that is, ‘Where will we play?’). When I started YourStory, the overriding factor was to tell stories of every entrepreneur. And I started by telling stories of entrepreneurs from manufacturing and allied industries. While these stories were meaningful in their own right, as an online venture in 2008, I did not see any traffic coming to the site. The question was why? These are great stories but the traction was not present. A deeper analysis made me realise that an entrepreneur from the traditional venture at that point of time was not reading his story online; and even if he was reading, he was not sharing the stories with his peers and friends. More often than not, and true even now, these entrepreneurs were not on social media, and every story written painstakingly was giving just very few clicks. Soon I realised that I need to come back to these stories later in time and do complete justice to these stories and also our efforts when as a platform I get more traffic. After all, who would not want their story to be read by millions of people?
So, we changed the category to pure-play startups, who are very much online and consuming Internet day in and day out. Web analytics validated this assumption and our clear definition of which category to operate in saw a steady rise in traffic from 2009 onwards.
How are you thinking strategy? What are some of the measures you have taken, which have worked and which ones have not worked for you? In subsequent posts under this series, we will feature case studies, and I look forward to your contribution in these case studies. Send me a mail now.