5 strategy questions for every founder
Define and socialize your startup vision
Every startup journey begins with an existential crisis:
Who are we?
To answer this question, startup founders typically lay out their vision for the future in a pitch deck. The pitch deck describes a problem worth solving and paints the picture of your solution. The pitch to investors, of course, is that your team is on to something with massive growth potential. Investors would be crazy not to invest!
A pitch deck answers core self-reflective questions about the startup like:
What is the problem we’re solving?
What is the market size?
What traction can we show?
Who are our key competitors in the market?
How will we make money?
What is our unique advantage?
And finally…why us?
The pitch deck may define the startup to some degree, but it leaves many unanswered questions. In a startup, identify crisis and confusion can lead to misalignment.
Your startup requires another level of clarity. The strategy deck deeper explores the question
Who are we and what do we believe in?
For an employee, there is nothing worse than not knowing why you come into work every day. What is the point of this company? How are we different? If the answer isn’t clear, employees will quickly disengage.
According to Gallup, “32% of employees in the U.S. are engaged — meaning they are involved in, enthusiastic about and committed to their work and workplace. Worldwide, only 13% of employees working for an organization are engaged.”
The clarity of strategy decisions is critical to motivating and aligning potential employees and customers. Without clarity, employees are at risk of going rogue — they will start to fill in the blanks for themselves.
The strategy deck is shared in all-hands meetings and used for recruiting and onboarding of new employees. And these decisions directly feed into the product development process, leading to the definition of what the startup should build — the product strategy and product roadmap.
To avoid your own startup identity crisis, here are 5 strategy decisions every founder must answer and internally evangelize:
What problem are we solving?
Your startup exists to fix something that hasn’t been fixed yet. Some startups, as an example, are founded to solve a problem described by a single, ominous research statistic. This one statistic can drive all company strategy.
What problem is Third Love solving? Research shows that “80% of women wear the wrong bra size!”
Every employee at Third Love knows exactly why they come to work every day: to solve the fit problem.
Consequently, every Third Love employee should know what problem their company is NOT solving. Is Third-Love going after the high-end, premium, sexy undergarment fashion market like Victoria Secret? No. The fit problem. Focus on the fit problem!
Pop quiz: What problem does your company solve? If you ask each employee, would they each have the same answer? Bonus points if employees reference market research statistics that the founders mention frequently!
How do we describe ourselves?
You’re at a conference and someone asks you “what does your company do?” Unfortunately, this question can result in diverse and mixed answers each time it is asked. A useful exercise is to break down your company description into three levels, depending on the audience
- We are X for Y — high level
- The elevator pitch — 2–3 sentences
- The blurb — a descriptive paragraph
These descriptions are not sales pitches, or the full backstory, or a vision. They are meant to center your audience around their first question: “Who are you guys?”
The simpler the better. Avoid the temptation to keep adding more detail. Avoid hyperbole and drama. Don’t worry if your description doesn’t sound as revolutionary as you’d like, it’s just a starting point.
My company, BigTalker, for example, can be described as “Yelp for professional development training.” This description doesn’t do justice to what the startup is all about, of course. But it does narrow down what industry we’re in and how we operate, bluntly.
Pop quiz: What does your company do? Bonus points if you can answer in all three formats without looking it up!
What do we believe?
What is your vision? From the beginning, you need to define your startup’s vision and mission. This doesn’t mean you have to spend weeks and weeks writing the perfect sentence, but you do need an honest, thoughtful answer to this question. Challenge yourself to write a simple, direct, memorable, accurate description of what your startup believes in. Make sure everyone in your organization is on the same page.
Facebook is a good example of a company that has a memorable, clear, and simple vision and mission. Facebook employees should know why they come to work every day.
Pop quiz: What is your company’s mission? Bonus points if you can also speak to vision and values. No points for “to make the world a better place.” ;)
How are we different?
Many hot new markets can feel crowded quickly. How is your company different?
For an employee, there’s nothing worse than coming in to work every day if your company is just another competitor in a trendy market. It’s important define specifically what sets you apart in the market. What’s your unique angle?
When Quip launched, for example, critics questioned how they were different than Google Docs. The Quip CEO did a very good job of a) defining their key differentiators and b) describing them in marketing material, and even in a Quora post on the topic.
Pop quiz: How does your company differentiate?
How do we measure success?
Every company should have their own approach to success metrics. You may start with simple metrics like revenue and number of users, but ideally you have unique measurements for your unique approach to the market. Don’t use your competitor’s metrics.
And don’t be tempted to measure success with false-flag metrics like umber of employees, name of investors, and size of office space. These are all things to brag in the startup community, but they in no way correlate to customer traction and proof of business success.
Your entire company should be aware of what metrics you track to measure success, whether it’s acquisition rate or daily active users (DAU’s) or monthly revenue. If you don’t identify key metrics, employees will be confused about how to measure success. Is it number of clients? Is it number of hours worked late?
Pop quiz: How does your company measure success?
Beyond these 5 core strategy decisions, there are many other questions that may need more thought and communication internally, depending on what’s important to your startup:
Who are your target customers? Who are you NOT targeting?
Who is the enemy?
How do you fit in the ecosystem? Who are partners and who are competitors?
How do you acquire customers? How do you NOT acquire customers?
What are you going to build? What are you NOT going to build?
It’s worth repeating that it is critical that all founders are synched up on the narrative behind these decisions. In my experience, it’s a terrible sign when three startup founders tell three different stories. It’s no surprise that 65% of startups fail due to co-founder conflict.
Strategy decisions are fluid
While it’s important to document strategy decisions, it’s also important to keep strategy decisions fluid — they evolve as you experiment and learn. Make an effort to keep everyone up to speed as your startup direction changes.
Every employee writes themselves into the startup story
Another benefit of a well defined strategy is that each employee can run with it. Each employee can evaluate and adjust their role to directly impact the company vision. In order to feel motivated, employees need a strong connection between work and purpose.
In a recent research study by LinkedIn, 74% of job candidates want a job where they feel like their work matters.
Thoughtfully communicating these 5 strategic decisions to stakeholders and employees helps to clarify the company’s purpose, aligning and motivating employees towards a single goal.