Strategic planning, while critical for larger companies, is “life critical” for start-up and emerging companies. You might get lucky just following your instinct and hitting on a successful strategy, but this is as smart as driving on the left hand side of the road as the best way to get from the Twin Cities to Duluth.
Picking up on Todd Krautkremer’s recent blog, the best approach to strategy is to think about your company’s offering (software, service, hardware, etc.) as transformative for the customers you seek. Another image is to think how your company is seeing a “crossroad” better than anyone else. By “crossroad,” I mean two new technologies intersecting or, perhaps even better, an intersection of a new technology and a market trend that can cause a step function in customer value. At my company, OptiMine, we have the good fortune of playing in the high growth market of online advertising (the “market trend” is the move of advertising to the internet) and delivering mathematical solutions that address complex pricing decisions for online advertisers in a fundamentally different way. The result is the potential to improve advertiser performance by $3 billion in the world of paid search advertising. This is a crossroad!
So, how to think about strategic planning?
• Describe your company’s crossroad.
• From the crossroad description, articulate the compelling value proposition in words your prospect would use in describing the value proposition to his/her boss (customer vocabulary only!)
• Be your best devil’s advocate and identify the top 2-3 reasons you will not succeed. Have specific plans, in writing, to counter these issues.
• Yes, do financial projections for the next 2-3 years but keep it simple, to start with, and realistic.
• Articulate the entirety of your plan in less than one page including several graphs or schematics to tell your story visually (and this is hard to do).
Hopefully, you have a crossroad clearly identified and right in front of you. If so, go for it! If not, or at least not yet, the recognition of this fact is important enough to understand the challenge or limitations to what can be achieved.
The essence of strategic planning is clear thinking and a tough and honest view about your opportunity (is it a true crossroad?) and not in the pages of “stuff” that often pretends to be a strategic plan. Have fun!