Every organizations lives and dies by its strategy. What makes a good strategy? The best strategies are simple and answer 5 fundamental questions: who, what, where, how and why.
Still, developing a strategy is hard. There’s a tendency to make it a very complex activity, which I believe drives most organizations to fall for many traps; one being the the copy-paste approach.
Startups, by their very nature, do not fall for this trap. But this doesn’t mean their path to victory will be easier; but much more harder.
I normally don’t post private messages between other entrepreneurs and myself, but I think a recent exchange I had recently is useful for others. Last week I got a message from a fellow entrepreneur facing some challenges, and she looked me up to talk about them and get some perspective from me.
Below is a part of our exchange:
The post she is talking about is How startups slay giants, in which I write about my experience in helping position The Jumpitz as a kids entertainment group. Ultimately the startup was sold to an incumbent, the acquisition was driven by the strategy we implemented to create our own space and become known.
The point I want to emphasize is her comment “it seems so simple”. In hindsight it does seem simple, but I do believe that simple ideas well executed are better than complex ideas.
Play the game only you can win
My Jumpitz experience was 10 years ago. Social media was still in diapers; back then it was called Web 2.0.! Facebook Fan Pages were just getting started, Twitter was still niche to techies, being a YouTuber was not thing, and the Apple app store had just launched.
I recognized this shift and acted boldly to use it to our advantage; specifically what new media enabled businesses to do.
As an entrepreneur you have to recognize that all startups, compared to incumbents, have the same constraints: cash, resources and time. But these constraints create opportunities (constraints are a strength), because startups have strengths in places where incumbents don’t: focus, speed and agility.
With that said, here are some ideas for you to think about:
- Competition in business is about business models. When an industry is established, everyone has the same business model. This is an opportunity for a startup because incumbents protect their business model; and when the startup enters an existing industry with a new value proposition, it’s best they do so with a new business model that difers greatly from competitors.
- In the world of startups, you will likely lose if you go head to head and fight giants on their own terms. To avoid heavy loses, you have to play the game only you can win; and if all goes well you’ll bait them to play on your terms.
- Strategy is about leveraging strenghts in a way that only you can. Compared to other kids entertainment groups, our startup had some differences. But we had to act differently to help us showcase those differences; and that’s what we did by leveraging new media in new ways that enabled us to do things that others wouldn’t.
- Rules are made to be broken. There are no rules, only principles.
Be willing to do what competitors aren’t
The principle that underpinned our strategy is simple to talk about but difficult to put into practice: do what others are unwilling to do.
You have to be willing to do what competitors aren’t. Incumbents generally operate by a “we do things like this and would never do things like that” mindset. This is where your opportunity resides because you can apply your strength and create better options for customers.
When you do what competitors simply can’t afford to do, whether for structural, branding, or risk reasons, you force them to do the unthinkable; and they usually opt not to fight at all.
The reason this principle is hard to execute is because you have to say no to many things, make tough decisions, stand your ground and act with conviction. In others words: you need to have the courage to be wrong.
Incumbents don’t have the courage to be wrong; that is your advantage.
Also published on Medium.