Recently, a 300-person startup we were talking to told us "We don't believe in strategy, it gets in our way of being agile".
Granted, this is an extreme position on the value of company strategy for startups! However, in our experience at Intersection X most startups struggle with setting strategy in an ever-changing world.
So why bother when everything is changing? Simply put, startups have no excess time for error, meaning all players have to be rowing in the same direction. There are very few second chances in startup land. Strategy is the vehicle for that common understanding of the company goals and how to get there.
Intersection X’s Three-Question Startup Strategy Generator
So how to start translating vision into strategy? Here's our 3-Question Strategy Generator we use with our clients.
1. What is your planning horizon?
The key is to identify a meaningful window of time where you dont expect your vision to change and you can move the needle. Younger companies tend to have short planning horizons. If you're a venture backed, or internally funded initiative, the timing of your next funding round is typically a great planning horizon to manage to. Intersection X clients are typically in the early stages of a business so we rarely see a planning horizon greater than 18 months.
2. What do you need to have achieved by then?
This question begins to tease out the strategy and it's key success metrics. It should be a topic of intense discussion at the executive level of the company. Quick answers might be "repeatable revenue", "technology validation", "product-market-fit" or "cost effective customer acquisition".
3. How will you prove you've achieved the goal?
It's often helpful to imagine the evidence you would provide to an investor to prove you've hit the goal you identified in Question 2. There should always be multiple proof points, typically across functions. A "repeatable revenue" goal might be proven by being on track for a certain acquisition cost, hitting a sales goal and delivering the product for a certain cost
When you're done answering the 3 questions you should be able to make a statement about your strategy that goes something like..
"In 6 months time, we need to have validated the technology, proven by launching version 2 of the product that can do X and Y"
OR
"In 12 months time we need to have product-market-fit evidenced by having 10 customers all using and paying for core feature A".
At this point you've now crystalized your strategy and are well positioned to identify the tactics necessary to execute on the strategy. Conveniently, the answers to these questions also create a simple, concise narrative (see example above) that can be cascaded down through your organization!
P.S. The eagle-eyed amongst you may have identified that we've skipped the vision setting part of strategy creation. Typically startups don't lack clarity on their vision by their nature. The challenge is taking that vision and translating it into objectives and tactics.