Real strategy hurts
and "Product Strategy" isn't a thing
This is a newsletter I write to figure out what’s real… and counter startup myths that sound good but aren’t real.
This week I’m digging into strategy. I’ve been re-reading Good Strategy, Bad Strategy and reading 7 Powers for the first time… and realizing (1) just how important strategy is, and (2) how misunderstood strategy is.
(Especially true after reading this tweet thread on why Flow lost to Asana. Even highly successful and thoughtful people misunderstand strategy and its role in success and failure.)
Reply to this email with your startup’s strategy, and I’ll send feedback!
Strategy is force against weakness
Of course, we all know the results of a good strategy:
Meaningful differentiation
Lasting profitability & business value
But we seem to misunderstand the inputs to a good strategy - and what a strategy actually is.
Strategy ingests tons of data about customers, the industry, competitors, the ecosystem. And it assesses which factors are relevant and important. Where is weakness? Where is opportunity? How could strength be built?
Strategy is the overall business optimization function. It is strength against weakness - how your business tackles a big market challenge or opportunity.
Which is to say, strategy simply diagnoses the market challenge / opportunity. Then it prescribes an approach to that market challenge / opportunity that enables your business to win.
How does something so simple get so misunderstood, ignored, misused?
In my opinion, there are two reasons:
The word “strategy” sounds good
Real strategy hurts
The word “strategy” sounds good
I want to be a strategic thinker. Do strategic planning. Build a go-to-market strategy. Have a product strategy. Have an influencer strategy. Fix our onboarding strategy.
I believe all these things are important, and I believe I am important, so I overuse the word strategy.
As do consultants and salespeople, who want me to think about my Data Strategy, because Data Strategy products and services make me feel self-important so I’ll pay more. (Capitalize the “S” in “Strategy” and you can increase your prices 10%).
Product. Brand. Go-to-market. These things are dependent variables. They are the results of strategy - the embodiment of strategy, even - but not the strategy.
There is only ONE strategy, and it resides at the business level. Sub-functions do not have strategies. They have plans - or some other word that’s NOT strategy.
Then come the people who talk about business strategy but do it wrong.
Goals/OKRs are not strategy. When you find yourself arguing about incoherent goals, it’s probably because you don’t have a clear, commonly understood strategy.
And wishful thinking isn’t strategy. Working harder than everyone else isn’t a strategy. Culture isn’t a strategy. Being the “leading provider” isn’t strategy.
These things don’t diagnose a market challenge / opportunity, nor do they prescribe a winning approach to that market challenge / opportunity.
The misuse of the word “strategy” holds society back. It leads to wasted effort on products and services that aren’t meaningfully differentiated. It causes confusion and pain inside companies, preventing people from doing their best work on meaningful things.
But that doesn’t mean strategy is easy.
Real strategy hurts
Creating strategy isn’t a pleasant exercise. And once you have a strategy, the world conspires to cause you to lose focus.
You have to understand what’s really going on in the market - which requires you to both get your hands dirty in the details AND understand higher-level trends and competitive dynamics.
You have to make trade-offs to create real strategy - which requires you to part with the past and forget sunk costs.
You have to take risks to create real strategy - no strategy is 100% foolproof, and adding vague language feels safer (but isn’t).
You have to articulate your strategy clearly and repeatedly - and it’s hard to put these things into words that other people understand.
You have to commit to your strategy - which requires you to say “no” to great ideas and suffer through near-term pain as you disappoint both employees and customers.
And sometimes, you have to adjust your strategy - which requires you to ignore most of the above principles.
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This weekend, I’m writing our company’s strategy down as clearly as possible, because (1) I finally think I know enough to have a clear and good strategy, and (2) as we think about Q2 goals, I don’t want to waste time bridging incoherent goals that result from a collective misunderstanding of our strategy.