Fred Wilson made a great post on What Is Strategy today to followup from a previous post on Product > Strategy > Business Model. Both good to read.
I’m not sure if I’m still confused when trying to differentiate strategy and tactics. Maybe it’s because your tactics will likely be dictated in part by strategy - and that is causing the confusion.
Perhaps I define strategy as leading metrics I want to aim for - goals to work on knowing how the strategy will play out long-term (assuming enough other things maintain a positive state) - versus how to obtain those goals or get those leading metric numbers moving in the right direction - is the tactics; Tactics as action?
JLM, a regularly commenter and someone I disagree with in the political arena, made this notable comment that paints a good picture, and is very complementary to what Fred says.
Applying Fred’s post on strategy to my own plans
Differentiation - Check.
Cost - Check.
Segmentation - Check.
Strategy to include a trifecta should be a good sign eh? Guess I’ll find out soon enough. :)
Re: Throwing money at something and expecting to win
Luckily I’ve not ever had a big chunk of resources available all at once, at least so far, and that’s allowed me / forced me to focus on the absolute most important aspects.
Strategy for defensibility long-term and determining leading metrics, along with the importance of branding, are the two top things I have focused on.
I’ve only ever really had access to chunks of money, low to medium five digit amounts, and it’s amazing how fast you can burn through that with outsourced contractors (specifically developers / programmers) - who in general want to provide you with as little work done, bill you for the most hours possible - all because they don’t care or need to build a long-term relationship with you.
Anyway, I digress, these experiences have prepared me to value time and relationships, and I look forward to being able to manage larger amounts of funds so I can start building those good long-term relationships I’ve been craving. It really made me see the value and importance too, of a paycheck; I’ve not ever really felt a personal / direct attachment to money — a positive I think in allowing me to come up with ridiculously grandeur plans.
“If you can’t get product right nothing else matters [including strategy]”
… Fred says, and said also,
“I have seen brilliant strategic plans wasted with terrible product execution …
And I’ve made fortunes investing in brilliant products that had no plan.”
He also noted that he’s “lost too much money investing in brilliant plans.”
I know this will be my biggest challenge for garnering investment — very big vision / plan, though I’ve never put together or lead an in-person team before.
It’s why I am a fan of convertible notes / debt, which would allow me to prove myself in a more fair environment. I’ll get some money, give it my best shot, and the amount of initial equity returned for that initial capital will be based primarily on my performance leading. I feel if I perform extremely well, and everything’s going really well, then I should be rewarded from that (by not losing/needing to give as much equity for that round). Of course there’s still finding a fair balance as to what it’s worth to an investor if “best case scenario” is reached / performed.
Luckily I’ve been doing UI / UX since I was 11 or 12 years old, without realizing or caring that’s what was - first starting when I was developing my own MUD (online text-based game); I was turning the interface from the standard of scrolling text, into a fixed layout, where elements that made less sense scrolling, and where it made more sense for elements to be in a known-fixed location. Fun times.
So, I’m not personally worried about creating / leading towards a good product - though there are more elements to execution, other than just seeing what an end product should look like / be like. I do have proof points in this area, otherwise I think it’d be a non-starter for conversation with investors.
The next step for me really is just getting the funding to keep moving the product forward, moving more towards executing on the whole strategy.
Albert Wenger at USV wrote a blog post on internet exceptionalism. He’s countering some arguments made in a post he read entitled “It Always Comes Down to Math.” His post is brief but he makes valid points contradicting the author of the the article he’s commenting on.
I had some thoughts to add, and made the following comment, which I am pasting below.. and I often do, I go off on a bit of a tangent from differentiating (if any) between brick and mortar and internet businesses…
Browsing a store is equivalent to freemium. Window shopping too could of course fit into an analogy too, though not in a super creative mood today.
The service you’re providing as brick and mortar location is discovery of product and providing access to it. You could extend that service provided to to distraction, entertainment, social engagement, etc. - and then hoping to upsell via them buying product.
Of course in part it’s the store’s job to showcase what they want to sell, and of course the packaging and marketing associated with a product is designed by a company competing with all other products for attention - with companies trying to increase demand by marketing a product externally from the store’s location via whatever channels lead to an increase in demand. You could compare this to advertising on third-party sites.
Brick and mortar and online are identical except for the physical space limitations that exist, and the known or unknown variables and efficiencies or inefficiencies that come with each. One factor though, relating to physical space, to highlight is online is much more competitive as you’re competing with the world - whereas with physical space, once you own or are in control of it, you will have a pretty good idea of what your competition could be (at least in a saturated and developed area).
I want to start a few brick and mortar businesses in my lifetime, preferable sooner than later. I feel there is a large shift that will happen / should happen. It’s in line with Carlota Perez’s economic theory touching on quality over quantity and towards a wellness economy.
It will take some political drive to shift economics away from certain complexes that have evolved and perpetuate themselves - and that I’ve never heard or read about before I discovered it on my own. I’m curious if others have come to the same conclusion / ideas, though I’m not ready to publicly state it yet.
So going back to a concept I like linking to of virtual reality - mimicking virtual reality with real life - I see large general-use platforms comparatively as brick and mortars like Walmart, etc.. Some are more contextualized such as Home Depot.
Smaller stores can and of course must be more contextualized (else they’re not very useful - and ‘convenience store’ is relative to what a person regularly would want to buy), though they currently are squashed out / put out of business due to at least one pattern / cycle that’s relatively simple and obvious once you see what its trickle effects are and their importance; Economies of scale, and efficiencies that come along with it, being part of it.
Once I can clarify what I discovered then I want to jump in the political arena with (in part), and once I find the funds to make educational material that makes the concepts easy to digest then I’m pretty sure it will be easily consumable and conversation can then occur amongst people. Like any complex or system that maintains and perpetuates itself with its profits, the controllers of those profits won’t like what I’m proposing and will shout out all kinds of fear, from anger and fears of their own - among with self-preservation, though the systems I want to change will help everyone - will help the majority.
I think the sooner systems are shifted in this way, the faster humanity’s creativity and loving nature (once removing the fear/fixed thoughts/ways that covers over fluid thoughts/creativity and love) will be able to support and solve all problems, and become relatively fast at them too; Patents get in the way of this speed of innovation as well, as I know I’ve talked about elsewhere, other methods of funding will be found if something is truly useful and/or beneficial - or even potentially beneficial with the right research and science or other supporting evidence of said benefits.
We need to be teaching everyone some very basic leading metrics, and probably in a relatively specific sequence - or at least in a framework so there are reference points to how things relate to the whole. I’ve started this though only small pieces of the whole are together; I’m working on and building many theses, so my attention is a little spread, which just means it’ll just take a bit longer to get done (curate my thoughts and get them down in a logical way).
Of course this kind of thing isn’t ‘profitable’ in a simple-definable-micro quantitative way, though like all mind-altering experiences (experienced-based learning/realization) or thoughts - qualitatively they are the most profitable, invaluable.
Fred Wilson’s video of the week on crowd lending is a valuable one to watch if you want an overview of where the financial world will be heading. USV has of course made multiple investments in this area, including in other important financial disruptive areas such as Bitcoin.
I love financial disruption, and USV’s investments have painted a clear picture as to why they are and will be so important, and now more easily able to extrapolate how that will affect everything else. Loving how the sharing economy was brought into the discussion early on to help frame it all.
The more I think about it, the more I really want Fred’s job of researching for emerging markets and then making investment plays, though for now I’ll continue to work that same R&D strategy into my own company … and then I’ll probably just become addicted to building companies and stick with my even grander business plans. That’s what seems to happen to everyone else who starts building big ecosystems!
You’ve only got three choices in life: Give up, give in, or give it all you’ve got.
Fred Wilson (my old Man Crush, my new one being Elon Musk) wrote about a mistake he sees entrepreneurs make, and that is that after they they find product market fit, they move to a business model before deciding strategy. It’s worth the short read.
Well, I’ve bootstrapped so far to product market fit. It’s only just reached the most bare MVP, and that is only for half of the segment of the market I am trying to have flow into the ecosystem I’m fostering - though that’ll be enough for what needs to happen next.
During this process of evolving understanding I’ve figured out many revenue streams that I feel are viable, and I want to at least try them all out, eventually. I’m not sure what priority those will happen in, and I don’t think I need to know at this point. You need to be careful when implementing them though.
You can’t know the value of your product / ecosystem or what negative pressures it can withstand until you reach scale and therefore some stability.
So how do you get to scale and stability? Freemium model is one good way. It allows you to let a larger amount of use occur, and then you can determine how you can monetize / ask for money (or other) in return for added / uninterrupted benefit - and you can see how people use your product, or how they function within your ecosystem.
An example would be if Twitter charged people for every public tweet they posted. People already pay for private texts, so why not public ones?
But what does that cost long-term, in exchange for that short-term gain of the cost per tweet? I imagine that would prevent Twitter from scaling because most people don’t get enough value from sending out a short message to a bunch of people in order to be willing to pay for it. Some will be willing to pay though, and they’ve found revenue streams around what accommodates the base demands / requirements that lead to and allows their ecosystem to exist.
The conclusion is that if you jump to business model before product market fit (understanding your market and its values and needs) then you have a high probability of squashing something that could have worked.
This kills the business - well, not usually fatal as Fred points out, though costly otherwise.
I understand people and the frustration of who want to “make money now” - who want to just put in work and make an immediate return. This concept / mantra seems to attract people who are looking for something more than that though.
What most need to realize is that anything that can be done to “make money now” doesn’t have much of a barrier to entry, so everyone will be doing it - and so the value / cost people will pay will be low, e.g. you won’t be able to make much money.
The basic make money now scheme is selling a service, whether as a contractor or getting a salaried job. If you don’t want to have a boss or be making someone else a profit - assuming they’re not paying off debt they used to start and grow a business - then start a company. Starting a company requires a deeper understanding of how things work, how interconnected they are - the holistic view - though being your own boss is good incentive to learn what you need to learn.
Over the years, since I was 11, I’ve been watching and learning people’s behaviours online - and adapting and developing for those in mind, including for what my own preferences are - design, use, and otherwise.
Since that young age what I’ve been working on has taken a natural evolution, and these plans have grown large, however they’re all connected to the same understanding of business and psychology - working within patterns / a framework that resonates with Clayton’s disruption theory. I have a very solid model planned out now, I’ve just not the resources to fully create or execute on, yet. I don’t think anything will stop me - though I’ll wait to see if someone punches me in the face.
I’ve been told by many over the years that I need to focus on smaller plans, be less ambitious. I just can’t though - and it is a single thing I am focusing on, a holistic vision, where there’s just too much synergy and “disruptive benefit” from the bigger plan (the whole ecosystem) that will lead to beating out competitors - assuming with execution of equal quality or more efficient than their own.
The people who have said to focus on less to me though are right in one way: It is very difficult to get something going that is so ambitious - though I think now I’ve done the majority of the roadmap work required, and is soon time to focus fully on execution, building the foundation for what will become a good-sized company.
I know most of you don’t know what I’m working on, and only a couple know closer to the full scope, though I think around end of summer I can be more open, and I’m sure I’ll reach out and pick your brains for thoughts on it all. Perhaps I’ll do a series of blog posts explaining my reasoning and theories in depth - perhaps I’ll have to in order to gain the interest of investors, though the ones I’m hoping for would understand with seeing basic overview - and then hopefully be able to add value with guidance, though I guess that potentially moreso comes from a board of directors, advisors and mentors.
The part I struggle with most, mostly being on my own for getting work done and only smaller limited funds coming in at a time to outsource other work, has been moving things at a fast enough pace so I can be properly ready to talk to investors. It’s mostly been the lack of money to hire full-time people that has been the cause of my time delays, though my projects have still all moved forward, my thinking and theory and plans have evolved, they are more clear to me now, and I’m better learning my weaknesses - which are still a pain in my ass, at least until I can hire people to fill those gaps.
Something that’s kept me going, moving forward, has been focusing on self-development, self-improvement - always learning, always trying my best - realizing and acknowledging I’m always trying my best - along with finding new ways to improve, and noticing behaviour patterns that I could do better without. These all take time, though I’ve had time, and it’s important time to take.
A friend of mine recently said to me life is a platform, to which I replied that I want to make it a playground. I want to make the world a playground, though in which I am working on something meaningful and practical - and I want everyone else to have that same opportunity, experience.
The goal of my projects - business and otherwise - is to build community, and I’m getting good at that. It’s my 30th birthday this Sunday, and I’m having a birthday dinner celebration today and have 20+ confirmed coming to it - from people in the yoga community that I’m close to, to crazy-brilliant-hilarious university professors I almost on a daily basis have tea with.
I’ve come a long way. A year ago I’d hated my birthday since I was about 6 years old - and this year I’m excited about seeing a whole bunch of great / awesome people all at the same time who’ve supported me over the years, and being able to thank them and give them all at least one hug each. :)
Brilliant. He gets it. Resonates with my approach. Reassurance is always nice too. Clayton Christensen does a nice warmup to his discussing his theory of disruption - along with a number of examples. Some other goodies in this talk.
What is wellness? What is quality of life? The Community Foundation for Kingston & Area just asked via Twitter.
I think for most would define wellness and what quality of life is relative to their circumstances. If you try to define it outside of what resources and support you have access to you’re going to be fighting an uphill battle that is too strenuous, draining, exhausting, defeating - physically, mentally, emotionally. This won’t lead to the positive cycle everyone needs in order to challenge themselves to improve themselves, their life - their family, and the community.
So is there room for making a better, healthier life for you and your family? Are you capable of doing this on your own? Do you have proper support in order to achieve this higher quality of life or wellness - being able to be active, engaged with others and the world, and learning - as to improve yourself and your community?
If you have disposable money and time then you can afford these things. If you don’t have disposable money or time then you’ll potentially be stuck if you’re not in healthy enough place (mental, emotional, physical) to be active engaged, learning. In either case, you may not know the best path specific to you for you for attaining wellness and an improved quality of life.
So what’s the answer? Providing the support and tools for everyone - whether they have disposable income or not, and making it so time costs are minimum (accessibility) - is the answer.
You being happy is good for me - so I want everyone to be happy; Selfish, I know.