Most budding entrepreneurs are uncertain about the business strategy that could lead them to success. They are often afraid to experiment and innovate new approaches as they believe it might extend their time-to-market and product launch. However, in the absence of focus, innovation and clear business strategy, they are soon likely to reach crossroads. In this article at Harvard Business Review, Joshua Gans and his fellow authors state how a definite direction and strategy is essential for a growth of a start-up.
Strategic opportunities for new ventures require focus and direction right from the beginning. Else, they might face a decision-making crisis soon enough. Once they start a venture, the early-stage investments would flow in very easily however, they would struggle to decide the right path to take their technology to market. Gans shares the example of RapidSOS, a smartphone emergency response system, and explains how it tackled a similar situation. The author outlines four distinct paths that start-ups could choose from while making decisions on customers, technologies, identity, and market competition:
While retaining your product or technology, collaborate with incumbents. Work as an ‘idea factory’ and encourage innovation at every step. This way, you are more likely to establish your identity in the existing marketplace and deliver better value to customers.
This approach is somewhat risky as it implies establishing a new value chain altogether. Once done, you need to focus on competition and market control. However, if executed well, this strategy might be the key to success in the longer run.
This is termed as the ‘pedestrian’ approach that implies a more streamlined and linear business growth. Here, you focus on expanding within the existing value chain. Focus on your go-to-market strategy and competitive advantage daily.
Here, the concept shifts from idea generation or development to idea commercialization. The core strategy is to stay ahead in the game by competing directly with the incumbents and expanding your market share significantly. Ensure that you are quick enough with your execution strategy leaving no room for the incumbents to take over.
To read the original article in full, visit the following link: https://hbr.org/2018/05/do-entrepreneurs-need-a-strategy#strategy-for-start-ups