Founders Aware: Funding Won’t Fix Your Lack Strategy
Money won't fix stupid.
One of the biggest myths in startup life and building your own company is that money will solve your problems. It’s kind of ironic because the same people who think money will fix their company’s problems are commenting on how people who have money, like Elon Musk, should run their companies.
We named our business book and e-course BIG RICH MONEY, because we wanted to shake some common money myths and help founders understand the importance of business strategy. Unfortunately, “Super Sexy Strategy” probably wouldn’t have gotten the same attention as Big Rich Money as the name did.
Story from the book Big Rich Money: How To Turn Your Business Intentions Into A Profitable Company
I worked as a Chief Marketing Officer in an exciting startup that had secured millions of dollars in funding, but regarless, went bankrupt. I was hired as a CMO after the shit had already hit the fan; I was the fourth CMO of the company that year. I gave my everything to try to save the company, but failed even though we launched two products and gained the visibility of tens of millions globally. I was asked later if I regretted the marketing strategy I had made, and believe me: it was something I thought about a lot. But no. I have no regrets about the marketing strategy I created. For the business strategy the company had and with the knowledge I had in hand, I would still today do exactly the same marketing strategy as I did then. I would change many things for sure, but not the marketing strategy. All of the marketing and PR can not help if there isn’t a good monetization strategy for how the company will make money – real, consistent profit – in a way that’s scalable. One of the problems with this particular company was that the entire team was not unified. Many employees didn’t believe in the company strategy the leadership had put in place, and various teams tried doing things outside of the established strategy. Many had personal opinions about what it should be, and there were small groups of people who were internally trying to drive the company in another direction. They could have been right – perhaps their strategy would have been the way to go. But now we will never know if either of the business strategies would have worked out because the company did not work towards one unified goal. Many actions in the company were actually fighting against each other. It is essential to have one unified strategy and a team that works towards the same goals for any company to be a long-term success. You might have a small company; maybe you are a company of one. You might think you have a pretty good picture of what success would look like for your business and how to get there. I highly recommend spending time thinking about strategy and writing it down concretely. I almost guarantee you will accelerate your growth if you do.
I have been a marketing consultant since 2008, and one of the recurring problems I realized many startups had, was that they didn’t actually have a clear business strategy. It is impossible to create a great marketing strategy without a clear vision of the company’s future, so I ended up helping many of my customers with the business strategy, product strategy and even looking at new business models first.
Strategy is the difference between lemons and lemonade
Strategy is the foundation of your business.A strategy helps you to make decisions faster, and it makes sure that even when things change all the time, you are still going toward your big goal.
As a marketing consultant, I have also often heard “we need to sell first, then we can do marketing.” It’s a clear message that either you don’t understand marketing, or you don’t understand strategy, or neither.
“Strategy” started as a war term, and means “an art of the general” to achieve one or more long-term or overall goals under conditions of uncertainty. It is an overall big vision of where you want to go, which goals you want to accomplish, and how you want to achieve those goals differently than anyone else. Strategy is the foundation of your business.Strategy also defines your values, principles, and guiding lines for how you want to conduct business. Your values and uniqueness guide you in what kind of systematic action you will take. Strategy is different than daily action or tactics you will do, but strategy helps you to choose the correct tactics to do. Tactics are actions that are arranged in a specific way to accomplish short and long-term goals. When you know your long-term goal, you will have to create a business strategy on how to get there. You can accomplish the same goal with a different set of actions (a different set of tactics). Many founders spend time tweaking and trying different tactics, and jumping from one tactic to another trying to find the best tactical ideas and best toolkit and team to accomplish those. This is the moment when money often enters as the biggest problem and the lack of resources is seen as the biggest problem.In a fast-changing world, it is good to be agile and be able to change your tactics quickly if needed. You have short-term goals that you keep measuring and assessing and then changing the actions if needed. But when you don’t have a solid strategy, changing tactics is hardly being agile, but more like a desperate attempt just to get something to work. Tactics are easier (and often more fun) to think about than strategy, and since you can change them up in a matter of weeks or months in the name of being agile, they are less scary to commit to than a strategy.
Difference between being agile and not having a plan.
Not having a plan: I’m at the airport in Helsinki, Finland, trying to figure out where to fly. Singapore? New York? East or West? Skiing or beach? I can not move until I know which direction to go. If I already packed my bag, I already made this trip less successful by probably packing some wrong items. But in a scenario where I have lots of money, I think I can just buy whatever I need at the destination. Anyone who has ever lost their luggage knows that buying everything at the destination is not as fun as it may sound, but will dampen your vacation. Being agile is like deciding that I want to go to Southern Europe, but not sure if it’s Spain or Italy. So I start driving and cross to Sweden, then Denmark. I am moving towards my goal all the time while enjoying the trip, learning things, and buying time and I don’t really have to start making decisions between Spain or Italy until hitting Southern Germany.Now of course, by the time I make it to Germany I start trying to book hotels in Rome or Barcelona last minute, I realize the perfect South European vacation would have required a bit more attention and planning. Now I need to pay more or get a crappy room. I can still accomplish my vacation, but it is not the ideal I dreamed of because I didn’t have a strategic plan, and I was just trying to wing it. When you have a strategy, you know exactly what your dream vacation looks like, what’s the purpose of your trip, and where you are going. You research the best places to stay, calculate what is in your budget, and maybe make tradeoffs between better flights or better hotels, or maybe decide to wait another year, so you have enough money to pay for the ultimate dream vacay. You don’t just wing it, it’s your dream destination, after all!Are you steering your business to your dream destination, or just winging it to see where it takes you?