In Defense of Strategy

If moats are the what, strategy is the how.

Every startup has a window of time during which they must simultaneously build something worth defending and build defenses around it.

For new startups, strategy is deciding how to use the window wisely. It’s about directing your limited resources towards digging moats before you’ve removed enough uncerta... See more

So before you launch, and definitely before you raise money, figure out whether you think you can create scale economies, switching costs, maybe network effects, or mayyybe cornered resources before your uncertainty window closes.

A startup can’t be expected to have moats in the early days, but it should have a strategy in place that gives it the best chance of having them in place by the time the uncertainty window runs out.

It’s my favorite strategy book because it was so easy to put into practice, and because I recognized so many of the characteristics of bad strategy. Here are a few:

• Mistaking Goals for Strategy : A classic. “Our strategy is to grow revenue by 50% while improving gross margins by 200 bps.” Cool cool... how though?


• Fluff : Using buzzwords and jargon

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A strategy is a high-level plan to achieve one or more goals under conditions of uncertainty, designed through recognizing the challenge (diagnosis), setting a direction to overcome it (guiding policy), and detailing steps to implement the policy (coherent actions).