On a recent episode of ABC’s Shark Tank, the sharks shredded an entrepreneur’s pitch to pieces, and he left battered, bruised, and empty-handed. This, of course, is a significant part of the sharks’ job, makes for engaging TV, and nothing new.
But what was intriguing about this particular shredding was that while they loved the product, they simply didn’t get the business strategy.
The entrepreneur, Vincent Zaldivar (aka CocoVinny) was asking for $150,000 in exchange for 10% of his Las Vegas-based company, Coco Taps, that featured a coconut water drinking system pairing fresh shaved and branded coconuts with a separately packaged, patented, reusable, simple screw-in tool to easily “tap” the coconut for the freshest possible drink of natural, unprocessed coconut water via the tool’s spout or a straw.
CocoVinny’s first-year sales were a respectable $250K, and his 2017 forecast doubled that. The sharks wanted to know the source. Answer: two product lines, the tap kit, and the branded coconuts themselves. The revenue split was 80% drink, 20% tap kit. The majority of sales had come from Las Vegas hotels.
The sharks dug deeper, wanting to know CocoVinny’s growth strategy. He began talking about the cruise line industry opportunity. The sharks struggled with understanding the scalability of what Mark Cuban stated was essentially “a delivery service.” CocoVinny replied, “hotels are calling us from all over the world…”
Branding guru Rohan Oza stopped him cold: “Wait…they’re calling you for the fully completed coconut or the tap kit?”
“Yes,” answered CocoVinny.
“OK I’m lost,” replied Rohan.
“I see it as two businesses,” added Robert Herjavec.
“Right,” nodded CocoVinny. “We just let the kit live organically on Amazon. Lori [Greiner], we could do a QVC infomercial and rock the world, show them how easy it is to tap a coconut, and offer a ‘coco cleanse.’”
“Coco cleanse?” asked Mark Cuban.
“Yes,” said CocoVinny. “There’s lots of business here. Barbara [Corcoran], with your help…we’ve done some amazing franchises…the Coco Tap Shack model…”
“Franchises?” asked Robert. “You have another business?”
“Yes, it’s an entire Coco Dream that we’re building.”
Mark Cuban cut to the chase with an exhausted eyeroll, “Look, Vinny, we can’t get straight answers, I can’t tell if you can scale…I’m out.”
Robert Herjavec followed suit: “There’s a term, you’re drowning in opportunity. Every time I took a sip there was a new business. I can’t follow the bouncing coconut, I’m out.”
Barbara Corcoran thought Vinny’s strategy was “too complicated.” Lori Greiner thought the coconut water space was “too niche” for her.
Rohan Ozo summed it all up: “You have a fantastic tasting product. You have a wealth of opportunity. But what you have to do is focus. During the pitch, I didn’t get that clarity of focus, and I didn’t get the clarity of gameplan operationally…I’m out brother.”
While CocoVinny left the tank strumming a song on his ukulele, I couldn’t help but think, “if he only had a strategic sentence.”
Allow me to explain.
If I were to ask you what your company/unit/team strategy is, could you answer in a single sentence?
Is that even possible? And even if it is, why would you want to (other than to respond to some smart-aleck Medium writer)?
I know it’s possible, because it’s a regular part of my work. And there are at least two worthy reasons for stating strategy in a sentence, beyond capturing a Shark Tank investment.
First, because every time I ask someone what their strategy is, I rarely get a crisp, clear answer. I usually get a medley of purpose, vision, and mission-like responses. Many times I just get blank stares, shoulder shrugs, and head scratches. Sometimes I’ll get a response akin to either “we have a detailed strategic plan” or “we don’t really have a strategy.”
Second, because a single sentence has real power.
Journalist and pioneering congresswoman Clare Booth Luce once told the story of a conversation she had in 1962 with her old friend John F. Kennedy. According to her story, she told him, that “a great man is one sentence.”
In other words, a great leader can be so well summed up in a single sentence that you don’t have to hear his name to know who’s being talked about. For example, “He preserved the union and freed the slaves.” If you’re an American, you don’t need to be told “Abraham Lincoln.”
Luce challenged JFK to think about his sentence, urging him to know the great themes and demands of his time and focus on them, to have absolute clarity on them.
It’s a legacy sentence, a future-back statement, and I believe the same logic can apply to crafting strategy. That is, to steal Clare Booth Luce’s words, a great strategy is a sentence.
Let’s give it a go. But before we do, let’s define strategy, because strategy means different things to different people. My preferred strategy definition is the one I learned personally from Roger Martin, as contained in his book, Playing To Win:
“Strategy is an integrated cascade of choices that uniquely positions a player in its market to create sustainable advantage and superior value relative to the competition.”
The “integrated cascade of choices” centers on five key questions, the answers to which provide the very focus Johan Ozo advised:
- What is our winning aspiration?
- Where will we play?
- How will we win?
- What capabilities do we need?
- What management systems must we have?
Making and acting on these choices produces winners. Why? Because clear, tough choices force your hand, confine you to a path, but free you to focus on what matters most: winning.
To state your strategy in a sentence, though, you really just need the first three parts: winning aspiration, where to play, and how to win. This simple madlib-type plug-n-play is basically a tailored, more specific version of this construct:
We want to [what to win] in [where to play] by [how to win].
Your winning aspiration needs to spell out a clear win. It needs to be future-oriented, ambitious, specific (thus measurable), contain a competitive element, and avoid a simple internal goal that may or may not result in a winning position. It’s super-important to think about winning, because if you’re not in a winning position you’re at the mercy of those who are, and they’ll use the resources that accrue to a winner to beat you up.
Your where-to-play needs some element of segmentation. The usual suspects include industry, market, geography, customer, channel, product/service, and stage of production. The key, though, is to focus only on the spaces you can dominate. (A better question might be: where will we win?)
Your how-to-win needs to capture your unique value proposition and defensible advantage, which briefly outlines why you’re a better choice over rivals. The only way to win is to consistently offer a better value equation than other alternatives, even if that value equation is a matter of perception.
Here are some quick examples:
We want to lead the U.S. luxury performance sedan segment by offering higher quality and competitive design for one-third less.
We want to have a top-ranked 5-star property in every market that will support a luxury hotel by providing a home-away-from-home, office-away-from-office experience.
We want to capture the short-haul air travel market with high-frequency flights and efficient service to secondary airports at a price that rivals driving.
You probably don’t need to be told “Lexus,” “Four Seasons,” or “Southwest Airlines.”
CocoVinny needed to state his strategy in a sentence. I firmly believe that had he been able to do so, he would have had the sharks eating out of his hand, not tearing his pitch apart.
Try it for your own business, team, or even your own professional career (substitute “I” for “We” to make it personal). State your strategy in a sentence. Done right, it prompts the questions of what capabilities and systems you’ll need to produce the win you aspire to in the space(s) you’ve chosen.
Share your sentence with those in your charge or those you serve. Watch the glazed looks evaporate. Watch people lean in.
Then when some smart-aleck Medium writer asks you what your strategy is, you can look him squarely in the eyes and answer in a single breath with the clarity of focus even a Shark Tank shark would envy.
Now that is a win.