Ask strategic questions

Not everybody is a brilliant strategist. And that’s ok. Yet every founder team need a strategy for how to develop and grow their startup, and what do you do, if the very thought of developing a strategy just gives you an uneasy feeling?

The simple answer is that you make it as easy as you can for yourself by ensuring that you have a simple platform from which you can get to work on your strategy.

There are many different platforms, you can use. With platforms, I essentially mean approaches. And there is one approach that is more powerful than most and which will easily help guide you through the process without too much pain:

Start by asking strategic questions.

What is a strategic question?

A strategic question is one that borrows from the “How Might We…”-methodology of the Google Design Sprint process (or maybe it was the other way around, doesn’t really matter) and allows you to frame your goal and aspirations for outcomes as a question.

A couple of examples:

How might we utilize our strength towards Segment A of customers to launch successfully with Segment B?

How might we grow retention in our customer base over 97% month over month?

Get it?

When you asks questions like that, you can start plotting suggested answers to them. You can word these like outcomes, i.e. “Launch 1:1 Customer Success offering for Premium Customers” and then look at which actions you will need to take in order to deliver on that.

When you have that sort of Christmas tree of objectives and actions – essentially an OKR structure – you’re well on your way to formulating a strategy: You will be crystal clear about what you will be doing, what the result is going to be and why you will be doing it.

The rest is – more or less – just a matter of getting it written up in a format that can be shared and discussed with your team and various stakeholders, before it becomes the new strategy to guide your venture towards even more more success.

But remember: It ALWAYS starts with being able to ask the right open-ended questions.

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(In)efficiency rocks

Maybe the headline is a bit controversial, but let me try to explain what I mean.

Oftentimes I see products that are super efficient in who they are targeted towards. You can see from the product and the words being used to tell about it that the team behind has been guided by a very clear idea of who they were building the product for.

All that is good. In some respects. But potentially limiting in others.

Of course it’s great to have alignment with who you are solving a problem for as it should increase your chances of getting Product Market-fit for your product. The flipside however is that that exact approach has a risk of you being limited in your thinking and thus in what your product could do and become, if you had a bigger perspective.

A lot of this has to do with setting the right strategy, and even though many will claim that they have had thoughtful strategy processes, it is also rather safe to say that not all people who work on developing strategies are great strategists.

If for instance the people in charge of developing your product strategy are very minded on a specific outcome, chances are that they will build the plan that suits their purpose and delivers on what they wanted in the first place. And they might very well not be the best or most profitable plan.

Thus what you should do is first of all to ensure that your strategy planning has the right source of altitude from the beginning, so you really get the broadest possible view of the horizon. And then you should go about being inefficient in building your product.

Now, that sounds pretty horrible, so what does it mean?

Essentially it just means that you should resist the urge to have a specific, narrow outcome in mind and build your product towards that. Yes, you might be able to get a very efficient process going towards that goal, but the goal itself may well turn out to be limiting.

Instead by taking a more inefficient approach you’re being open towards outcomes. Your mind becomes broader, and your thinking in terms of how your product can be applied and for whom will be bigger and ultimately have greater chance of profitability. Provided of course that the features and value proposition of the product itself is still razor sharp.

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Free your talents

What’s the point in spending a lot of time and effort in getting the best people to join your team, if you’re not prepared to let their talents loose for the good of the company?

It sounds like a stupid question, but in reality it happens all the time; great people are onboarded with promises of exciting challenges and an opportunity to make an impact. And a few months later they leave again, disgruntled, hopes dashed and with a really poor experience of you and your company.

Except in cases of a bad hire, it is rarely the departing team members fault that things didn’t go according to plan. It’s mainly on you for not ensuring that they were provided with the guidance, tools and mandate to do what they were hired to do.

Often this comes down to the fear of losing control as a founder. After all, you and your co-founders built the company to where it is today, and it would be a real disaster for anyone to come and mess that up. It’s super understandable, and I get it. But you can’t think like that if you want your company to continue on its growth trajectory.

Instead you need to realize that you have limits. That there are other and better people out there at doing what needs to get done to get to the next level. And that your task is to persuade them to join your company instead of the competition. And then – basically – get out of their way. Within reason of course.

Personally, I have always found that you generate the best results when you’re brave enough to be ambitious in your recruitment and go for people that are better and smarter than yourself and then do your utmost to provide them with the freedom to operate. Why? Because when they deliver according to expectations – or maybe well beyond that – you and your company deliver as well.

So please, free your talents. Or they will move on to somewhere else, where they can.

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Profitable disagreement

I have always found that one of the greatest opportunities to learn something new and valuable is through constructive disagreement.

I find that when there’s disagreement in the air, there is a chance to broaden your own horizon. If you have the ability to breathe deeply, listen in and resist the urge to just shoot back with your own opinions.

I can’t remember a time where I didn’t learn something or at least have a proper reflection, and on the opposite scale I have even had a couple of epiphany moments that made a huge difference to me in my decision making.

Yet, despite of this, I often hear how disagreement lead to people separating and to great team members leaving teams who IMHO really, really need the kind of disagreement, pushback and questions being asked that they are waving goodbye to.

Instead of working out the severance papers these teams and the people involved should be focusing on what they could each learn from each other, and how this new and broader perspective could be brought to bear on the profitable development of the company.

Because there often is a direct correlation between differences of opinion, a respectful learning environment and broadening of ones horizon and the bottom line.

Yes, disagreement can be painful. And of course also sometimes beyond repair. But it also has an immense potential for future profit that’s worth investing some serious peace keeping efforts in.

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Solve my problem, please

Normally, we’re used to seeing startups looking to solve the problems of their customers.

But lately, I have realized that there is actually quite a lot of startups, who are essentially asking their customers to solve their own problems.

I typically see it in outreach emails asking me to go to a service or a product and do something specific; update something, try out a new feature or something of that nature. And it’s all perfectly fine.

But it also sends a signal that something is off; something is less than ideal. We have encountered a problem or a challenge on our end, and you, our dear customer, should ideally help us fix it.

Essentially, what you’re often communicating in this way is a shortcoming. Something you didn’t get right in the first place, and now you’re looking to compensate or perhaps even fix the issue.

You could of course argue that there is no other way than outreach to tell about new offers, features etc., and to a large extend, you would be right about that.

However, I could also make the argument that if you had a truly sticky product that your customers were so habitually using they knew it inside and out, they would find out these things themselves, and there would be little need to do outreach to already existing customers.

In summary: When your need to do outreach to your customers is on the increase, ask yourself where in your product or service, your core offering may be broken or less than ideal.

That is the problem, you should solve. Yourself.

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What’s the right price?

There are a number of fundamental questions in business, and one of the most fundamental ones to any business is the one of what to charge for your product?

Clearly there is not one 100% correct answer for that question as it always depends on a lot of different things. And yes, pricing is a science in itself and super hard to get right. But there are a few simple considerations to at least get you started.

They are: Cheap But Expensive, Optimum and Expensive For Good Reason.

The Cheap But Expensive option is the starter option. Yes, it will cost the customer less than the other ones, but in reality it is priced in a way to ensure, (1) you get your starting costs covered and (2) there is every incentive to upgrade to a more expensive solution.

Think of this as the small but overpriced ice cream cone that really just screams you were too cheap to get a bigger one.

The Optimum price point is where the offer makes financial sense compared to the value you’re getting as a customer. Yes, you pay, but you also have a pretty good understanding of why you are being asked to pay what you’re being asked. It can be a super hard point to reach and get right, but this is where you want to be also for the sake of customer retention.

Going back to the ice cream cone example from above this is where the ratio between price and the scoops of ice, you get makes sense, and where you think the value is good enough that you also with a happy heart buy for your friends and family.

The final price point – the Expensive For Good Reason – is the where customers demands more of you, and you basically say “Ok, but it’s going to cost you then”.

This is a scary point for startups because it’s usually here where pilot customers, who haven’t really paid that much (if anything), and which the startup needs to prove its case to investors, reside; putting huge demands on the team for promised service, support and updates for very little if any return.

This is the price point where it’s ok to be greedy as a startup and consider that if a customer is asking too much, you can do the same in terms of asking for more money. Yes, you risk losing the customer, but if it was essentially making a loss, you’re in 99,5 % of all cases better off without it anyway.

At the ice cream vendor this is where you as a customer just want an obscene amount of ice cream in your cone, and you’re just billed accordingly. A totally fair exchange of value.

So in summary: Getting pricing right is super, super hard, but if you have more price points than one, you will want 3 price points:

A low price point that covers as much of your cost as possible and provides a clear upgrade incentive,

A middle one that scales well (“Most Popular Option”, as it’s often called),

And one for special requirements, where you basically ensure you get very well compensated for going out of your way to satisfy a very needy customer with their special needs – without getting distracted from your strategy and roadmap to support it.

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The ‘know all’ fallacy

Some of the most charismatic and persuasive people I have ever met have also been the ones who have been the most convinced that they had it all figured out and knew everything.

Until they didn’t.

I am not suggesting that they all failed. But a good number of them did. Because they thought they ‘knew’, ventured ahead without taking stock of what was going on around them – and ultimately hit a concrete wall.

Besides the pain of that particular experience, the most painful thing was that it could most likely have been avoided by adopting a very different approach.

A learning approach, if you will.

When you adapt a learning approach you are more humble.

You’re able to take more signals in.

You are more aware that you’re not directing the world, the world is directing your opportunities, and you adapt.

Adaption is key here. The world changes and you need to do that too in order to be forward looking.

‘Knowing it all’ is inherently backward looking. And not very useful when things fundamentally change.

When you learn and adapt, you are able to seize new opportunities and with that the odds of success increases.

Which again makes it pretty stupid to insist on being the one ‘knowing it all’, don’t you think?

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Don’t try to be Keith Richards

Whenever you talk of ‘Sex, drugs and rock’n’roll’, you have to think of the legendary Rolling Stones. Not only have they made an eternal contribution to great music that will live forever. They have also lived the above myth to the extreme.

Lead guitarist Keith Richards has been chief among those trying everything on the planet and then some. And it has shown, time and time again.

I distinctly remember a concert with them in Copenhagen, where during band introductions somebody had to step up to the ol’ geezer and shout into his ear where on the planet he was playing that particular night:

“Oh yeah…Copenhagen! Pleasure!”

And then a big grin on his face before going full body and spirit into yet another one of their evergreen hits.

While slightly funny in itself, the real interesting thing about Keith Richards is that he was not supposed to have been there at all. Judging from what he has done to himself over the decades, he should have been dead long ago.

Apparently the combination of a very strong immune system (that scientists will want to study when he’s gone) and luck has kept him alive.

That last part is the essential one here.

Luck.

If luck hadn’t played its very significant part, Keith Richards would probably not have been around to tell his countless tales. Luck enabled him to do so.

It wasn’t part of any masterplan on his part. If there ever was one it went up in smoke – literally – in the 70s. Because you can’t plan for luck.

Neither can you.

If luck is a key ingredient to your future success, take a step back and reassess what you’re doing and how you can work to ensure that you’re not so dependent on something as fluffy, fledgling and very little under control as luck is.

Of course successful people are lucky too. But most of them – 99% would be my guess – also made it with more hard work, focus, determination, grit, talent and whatever than sheer luck saving them from stupid decisions.

You should work your way towards success. While Keith Richards is undoubtedly a legend, he is and will remain a terrible, terrible role model.

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