What should entrepreneurs think about in planning out a business strategy?

Take-aways from a talk in the Trust Center on 6/24/16

  1. Your strategy dictates the sustainability of your company
  • While two companies can start at the same time, have a similar idea and a similar technology, the strategy they set will take them in different paths and lead to different results.
    • Example: Coinbase vs. Ripple: both want to engage with blockchain technology but Coinbase is trying to lead a platform for bitcoin while the other is trying to create a competing new platform as the “Anti-Bitcoin”
  • The challenge is to implement your idea in a way that creates value and helps you capture value

 

  1. The “Action vs. Planning” entrepreneurial conflict
  • Action - use when there is an obvious path and all you need to do is implement.
  • Planning - use when you can get significant insights based on models/frameworks without the actual execution.
  • In the real startup world - it’s usually a mix!
    • In order to really learn you need to also go out there and interact with your customers.
    • What you view as experience, your potential customers view as their first impression of your start up. They evaluate you and decide on future interaction based on this.

 

  1. Managing the uncertainty of different paths
  • Axiom 1: There is more than one potential path to create and capture value from an idea (True for most ventures, not all)
    • Example: Starbucks: Selling high end coffee for customers can either be selling the beans or be opening cafe’s.
  • Axiom 2: Without moving down a specific path, uncertainty prevents ranking of alternatives
    • Example: Webvan vs. Peapod: Same concept: internet meets groceries. Different strategy: Collaboration with grocery stores vs. disruption of the existing market.
      • Sometimes it’s hard to know in advance which strategy will take the market and the only way to learn is to try.
  • Axiom 3: Choosing to move along one path changes the way you can move towards future paths
    • The paradox: choosing the right strategy/path requires knowledge and insights that can only be gained through real life experiences.

 

 

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