What Is Strategy?

My post on Product>Strategy>Business Model got a lot of comments and other reactions out there on the social web and from that I realized that many confuse strategy and tactics. And so I thought I would attempt to define strategy in business.

I like this definition that I got at wikipedia:

Strategic management is a level of managerial activity below setting goals and above tactics.

Strategy takes what you want to achieve and develops a plan to get there. From strategy you can develop tactics and implement them.

For me, strategy is as much about what you are not going to do as what you are going to do. Also from wikipedia:

Strategy is important because the resources available to achieve these goals are usually limited.

Strategy also involves how you are going to differentiate from competitors. Competitors are a given in business. How you compete with them will define the business. I like this framework a lot:

The basis of competition

Companies derive competitive advantage from how an organization produces its products, how it acts within a market relative to its competitors, or other aspects of the business. Specific approaches may include:

  • Differentiation, in which products compete by offering a unique combination of features.
  • Cost, in which products compete to offer an acceptable list of features at the lowest possible cost.
  • Segmentation, in which products are tailored for the unique needs of a specific market, instead of trying to serve all consumers.

Strategic thinking can be seen in other disciplines outside of business. Two areas I have studied carefully are sports and the military. Winning teams and winning armies have often won because they have out strategized the losing team. You can see that in the Revolutionary War when Washington was outmanned and outgunned. And yet his strategic moves put the British on the defensive and eventually won the war.

Don't think you are going to win in business with a better product, more capital, or a bigger team. You can't just throw resources at a market and expect to win. The winner in a market most often has the best strategy and exectutes it well.

So read up on strategic thinking. Chandler and Drucker would be my two choices. Sun Tzu would also be on the list. Henry V by Shakespeare might also be worth reading.

And make sure that your company has both mission and vision (goals) and a strategy. It's too easy to skip from goals to tactics and you will not be well served by doing that.

#MBA Mondays

Comments (Archived):

  1. Avi Deitcher

    Didn’t know that you were also into military history. Off-topic, but beyond Sun Tzu and Von Clausewitz (the classics), any recommended readings?I have enjoyed most of John Keegan’s works, the West Point Atlas of the Civil War is very well done (get it at the NY Public Library on 5th). Herzog’s “Arab-Israeli Wars” is a fascinating insight into the military aspect of the wars. Very much like to hear your reading lists.

    1. fredwilson

      son of a general. born at west point. its in my blood.

      1. Avi Deitcher

        Straight to the Kindle. Thank you.BTW, for historical military fiction, the Shaara father-son duo are very enjoyable, as are Cornwell’s books (Sharpe’s series and the rest).For naval, besides Horatio Hornblower, of course, Patrick O’Brian’s Aubrey-Maturin series is great (and much better than the film).

      2. Avi Deitcher

        LOL! I thought those were the names of books! I couldn’t find them, so I reread your post.Who’s your father?

        1. fredwilson

          Bob Wilsonhere’s him with his three sonshttp://instagram.com/p/aolw…

          1. ShanaC

            that should have been your picture for yesterday – great picture 🙂

      3. JLM

        .Haha, it is your blood, Blood.JLM.

        1. fredwilson

          yes. you are right. as usual.

          1. Guest

            definitely see the resemblance between you two!

    2. WA

      SunTzu. Shabala Press pocket edition since 1989. Face of Battle by Keegan-sophomore year college. Drucker-through out the grad program. Pivotal works. Son of a general though-Priceless.

    3. JLM

      .In many ways, we probably had such a bloody Civil War because of two institutions — West Point and VMI.Many West Pointers fought for their native States — Rob’t E Lee, Virginia.All VMI men fought for the South — Stonewall Jackson taught at VMI before the war.A terrible waste of talent and blood. The stupidest war ever.Today, it would be a class action lawsuit.Remember — the victors write the history.JLM.

      1. marybaum

        Not sure it would be a lawsuit. One view of current politics is that a subset of the Confederacy is still fighting.

        1. JLM

          .Sweetheart, are you talking about the War of Northern Aggression?Rest easy, though the period of Reconstruction was the time of an occupying army, the Civil War is over and the Confederacy is gone.A stupid war fought for stupid reasons which set our country back 100 years and still is impacting some parts of the South.And I was educated at VMI.JLM.

      2. fredwilson

        “Today it would be a class action lawsuit”You are on fire today JLM

    4. JesperBergmann

      I strongly recommend Certain to Win, which is about applying John Boyd’s ideas to business: http://www.amazon.com/dp/14…There are a lot of great lessons in the book and you can also find a good presentation woth parts from the book here: http://www.er.ethz.ch/inspi…Central to who wins – in war and in the market place – is mutual trust, the ones with the longest contracts and everything in writing are rarely the winners.

    5. JamesHRH

      Trout & Ries – Positioning.Based on von Clausewitz, but very easy read while being very exact.

      1. Avi Deitcher

        Trout & Ries, excellent. On my bookshelf.

        1. JamesHRH

          @wmoug:disqus mentioned Marketing Warfare below, but the original theory piece (Positioning) or the applied finale piece (22 Laws of Marketing) are the seminal works.

          1. William Mougayar

            I’ve been a dogmatic student of Ries & Trout since the mid 80’s. Marketing Warfare is the follow-on to Positioning. Those 2 books are the only books you really need to have from them. The rest of their books were re-hashes and not as good, maybe with the exception of Horse Sense. I have read all of them. I was fanatic about their work, and almost hired Trout actually a few years ago for some positioning work.

          2. JamesHRH

            I was sure I would get you going with that comment……I thought the laws was better than Warfare (vanilla v chic).Horse Sense is by far my favourite book from them, but for perverse reasons. It applies all of their principles to a new topic, creates a whole new way of thinking about careers that would be aped decades later, but had no impact b/c it came from strategy wizards.They failed to realize that brand strategy wizards can’t be the people who create a new category of career strategy.Love it – in a perverse and slightly mean spirited way, I guess – when really smart people can’t take their own advice.Docs are horrible patients; lawyers are terrible clients; smart guys outthink themselves all the time.

  2. Avi Deitcher

    Separately, excellent post. In my MBA strategy class (2004-2005, so during Iraq pre-surge), we got into quite a discussion around this, included some CEOs and an active-duty senior USMC officer.

  3. JLM

    .What a typically great blog post. I really am feeling like I should be getting a tuition bill.The issue of strategy is paramount in the success of any endeavor. Pres Obama is President because he had a masterful strategy. Forget about whether one agrees with him politically. It worked like Hell.Companies need to focus on Vision, Mission, Strategy, Tactics, Objectives, Values and Culture. They all work together.They are all different and it takes years of experience to value and understand those important differences.Strategy is the 30,000 foot view.Tactics is the boots on the ground.Objectives is the subdivision and assignment of the tactics to individuals.Organizations must grow when the Objectives cannot be accomplished by the existing work force. This is a mechanical view of growth but it works and when integrated with the org chart is perfectly process oriented and unambiguous.The military does a great job making these distinctions and it is perfectly attributable to business. Everything I ever needed to know to succeed in business — to get to the pay window — I learned as a platoon leader and company commander in the Army.I attach a graphic that I made years ago and which I updated recently which I use to discuss just this subject with CEOs.JLM.

    1. William Mougayar

      JLM- This is an amazingly comprehensive and clearly layout depiction of all the elements that a company must have.But I would caution that a startup founder/CEO might find it offensive or less irrelevant to their initial endeavours because it doesn’t have the Product and Market views front and centre.You and I know that that Product & Market are the result of your planning, but in a startup, you don’t start by Planning. You start by defining hypotheses about Product-Market fits and you start to build a product to validate that via iterative efforts.At some point in time when the product-fit is satisfactorily reached, and you start to have a company with 15-25 employees in it, by all means you need to stop and look at your graphic and say- now what am I missing to make my startup a great company that will grow properly, without blind sights?

      1. JLM

        .The product and market and competition are subsumed in each of the elements of the building blocks of a successful company.This is classic business plan type planning to which I subscribe fully.I do not subscribe to the notion that it is OK to disregard the basic business planning of an enterprise in the Internet age and to focus exclusively on product.I recognize in the startup ecosystem I may be a bit old school but, frankly, I consider it to be sheer laziness to overlook basic business planning.We are either building great companies to deliver great products or we are building products. One subsumes the other and is a bit harder work.One cannot eat dessert first all the time.JLM.

        1. William Mougayar

          I slightly disagree. The reality is that your planning will almost always be wrong if you plan then execute a startup’s product.The difference (and Steve Blank pounds on that issue) is that a startup is a company in the making, not a real company yet til product-market fit is achieved. After that, then everything you say is 100% correct.Reality is a startup is 4-5 engineers/UI and a founder. They will not start with strategic planning, etc…

          1. JLM

            .The first casualty of contact with the enemy (market) is the plan.Planning is not static, it is dynamic. It is continuous particularly as real world feedback is being absorbed.You are fixating on the notion that planning v product is a competition in which one must surmount the other — it is “both and” in that both must be done at the same time.The product is ultimately going to determine the plan as the plan is simply the mechanism for getting the product to the marketplace.In much the same way that the product itself iterates to its MVP, the plan iterates in a similar manner.Engineers/founders/visionaries are great planners — some more strategic than tactical — naturally and thus it is not a foreign or extreme view to promote that engineers do what comes naturally.JLM.

          2. William Mougayar

            I think the degree of time is allocated for planning vs. product vs. competition is where we are differing.Yes, the founder does initial planning and has assumptions, but they are almost always wrong and need a lot of iterations. In the meantime, they need to focus 90% of their energies on the product and getting users for it.If you are inventing and innovating something new, the notion of “competition” goes out the door (unless you are disrupting an existing model, e.g. Hailo or AirBnB). Who was Twitter’s competition or Tumblr’s when they started? The real competition they had was our time, getting users. It’s a niche they exploited very well. The Product was everything to them initially.As a startup, if you don’t build the right product well, everything else is irrelevant.

          3. JamesHRH

            The status quo is always, always, always the most intransigent competitor – esp. for new category creators.

          4. William Mougayar

            Yup. The default question is not ‘what can I do with your product’, but “will it hurt me if i don’t”. Big difference.

          5. Avi Deitcher

            Was it Ike or Patton who said, “plans are nothing, planning is everything”?

          6. JLM

            .Eisenhower. You should have know it was DDE, there was no profanity in it.JLM.

          7. Avi Deitcher

            HAHA! Touche.

          8. pointsnfigures

            Sure DDE wasn’t talking about working his way around a golf course?

          9. BillMcNeely

            Gents this is where Commander’s Intent comes in.”A concise expression of the purpose of the operation and the desired end state that serves as the initial impetus for the planning process. It may also include the commander’s assessmentof the adversary commander’s intent and an assessment of where and how much risk is acceptable during the operation.”Read more: http://www.answers.com/topi…If the plan starts going awry what were you suppose to accomplish?In my case, My intent is to sign 9 accounts. The founders and I thought this would be 9 companies like Salesforce. Over the last 2 weeks it’s turned into crowdfunding sites and local multi lot high end car dealerships.

          10. JLM

            .Having been an Ass’t S-3 in the days well before the Commander’s Intent was added to the typical Op Order, I can relate completely.The old 5-paragraph Field Order, perfect for Ranger operations and frag orders and patrols, did not allow the Commander to do exactly what is accomplished by the CI — provide the comprehensive vision of what is to happen and where the risk tolerance is set.JLM.

          11. fredwilson

            This man has a plan

          12. fredwilson


          13. Greening

            Will pay tuition: hence this open question.SGI helps marginal farmers plant fruit trees in their land. This helps combat global warming, the resultant crop helps in the fight against hunger, poverty and rural migration.We are solving a real problem and have a sustainable and scalable solution.What should be the strategy to execute to reach a billion trees planted in next 5 years?Tuition: will endow an apple tree in your name 🙂 Thanks.

          14. William Mougayar

            Wow, that’s 10 s’s.The s scale is a new AVC metric 🙂

          15. Donna Brewington White

            We live for Fred’s sssss’s and JLM’s “well played”

          16. William Mougayar

            I’ve done 2 Noooooo lately. I hope it doesn’t become a habit.

          17. pointsnfigures

            solve a real problem with a scalable solution. then execute a strategy to scale.

          18. William Mougayar

            I agree with that. Add…assuming there’s a large market for it.

          19. Pramod Dikshith

            I have followed your thread where you have stressed the importance of sales in the B2B context. I totally agree with you on that. The last start up I was associated went down because of poor salesforce we had. We had a good product but failed miserably when it came to positioning and selling. Product is extremely important but not at the cost of a well developed plan. We did not know who were our buyers but we continued to build the product which we thought was fabulous. I feel, Strategy and building Product need to go hand in hand.

          20. William Mougayar

            Thanks! I appreciate your feedback.

        2. fredwilson

          I disagree. If you can’t get product right nothing else mattersI have seen brilliant strategic plans wasted with terrible product execution I’ve lost too much money investing in brilliant plansAnd I’ve made fortunes investing in brilliant products that had no plan

          1. ShanaC

            his description might work best with physical businesses as opposed to internet ones

          2. William Mougayar

            Exactly!! That’s what I said in other words below.

          3. JLM

            .Where we diverge is the notion that it is “one or the other”. It is “both and”.In my view, a plan cannot be “brilliant” by definition until it is tied to an equally brilliant product.I am not suggesting at all that Vision, etc trumps product development but rather that product development occurs within a thoughtful framework.At the end of the day, it is the product which drives the plan and the plan is only a framework in which to deliver the product to the marketplace.Having “no plan” — by design or by accident — is actually a plan.In the military they call that a “movement to contact” or a “reconnaissance in force” — you are gong to wander down the axis of advance and then develop the situation based upon the enemy’s (marketplace’s) reaction.If there is no enemy resistance, then you exploit the advantage and pour on the attack.If you get clobbered, you withdraw and re-evaluate.A pivot is the result of the same logic.JLM.

          4. BillMcNeely

            3rd ID TF 1-64 Thunder Run on 5 APR 03 into Baghdad was a prime example of this. See the book Thunder Run by David Zucchino. http://www.amazon.com/Thund

          5. LukeG

            It seems like many of us use early-stage products to explore markets, better understand customer needs and opportunities, and test hypotheses.These are necessary steps in an era in which an overabundance of options prevents companies in many markets from dictating solutions to customers. (The market for users’ time is much closer to perfectly competitive than that for e.g. broadband providers)We’re prototyping businesses. Traditional business planning is less valuable *until you understand the business you’re in.*

          6. JLM

            .In the final analysis, a founder has to do what works for him and him alone.I am fond of saying that “…your generation did not invent sex…” meaning in a certain application that business folks have been founding companies in changing business environments and innovating since the beginning of time.The notion that you are “prototyping businesses” is, in my view, a bit of a cop out. Businesses have Vision, Mission, Strategy, Tactics, Objectives, Values and Culture statements.What is happening today is that smart founders are prototyping products to see if there is a business in there somewhere.They are so focused on the product that they run out of time to prepare or even consider the infrastructure which will ultimately deliver the product.There is absolutely nothing wrong with doing just that. I am suggesting just a bit of time might be spent on such issues simultaneously with the product development.Why?Because I see companies with traction, profits and a real business trying to backfill this stuff when they should be experiencing hypergrowth instead.Again, not A v B — both A & B.JLM.

          7. JamesHRH

            Therefore, the underlying question is one of risk.Classic strategic planning assumes that there are resources at risk: existing positions, assets (human & otherwise) & capital.SW based B2C internet startups do not put anything at risk.Case in point:David Karp decides to take a Tumbl and puts nothing at risk. He fails, he gains valuable applied experience. All good.He does not even have an opportunity cost – assuming his personal mission & vision is what had been reported.

          8. Vineeth Kariappa

            How do u make a plan w/o a product. An example?

          9. ObjectMethodology.com

            Just as a side note. You can make a plan with a “product plan” and no actual product. So, you can start selling a product before it exists. You can even use that approach for securing startup funding or expansion funding.

          10. Tereza

            This has been a big learning I learned the hard way transitioning from strategy person to startup entrepreneur. You’re incredibly resource constrained and there is no guarantee people will use your product until you ship it and they try it.It is different between B2C and B2B though. IN B2B, if you already have superior relationships and the need really clearly defined, you can ‘co-develop’ on their dollar or at least their time.B2C is totally unforgiving. Nothing but product matters there.That said, it is NOT as easy to develop a monetization strategy on the fly.Personally, I would not again create a business that does not take in revenue from Day 1. Personal learning. 🙂 Revenue is wonderfully focusing.

          11. PhilipSugar

            I think you underestimate the pressures of BtoB.You have a person with a much bigger stick if the product is not doing what they want.

          12. Donna Brewington White

            “Revenue is wonderfully focusing.”That’s quotable.

          13. BillMcNeely

            It’s a balance. I saw both in Iraq first hand. We kicked ass the first 3 weeks as we rocked the conventional fight. Then we were like “oh shit those 2 PowerPoint slides were not enough of a plan to get us the rest of the way”. Compounded by not having the right people on the bus until GEN Petraeus got into the driver seat.

          14. Matt A. Myers

            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.

          15. LE

            “I’ve lost too much money investing in brilliant plans”I remember from the 90’s some investors saying “they had to much of that ‘vision’ thing going” or something like that with respect to some failures.I wonder to what extent the charisma of the founders plays into buying into the “vision thing” and ignoring more concrete factors..When I had to borrow money early in my first business the bank officer, the person that you dealt with (who you gave the dog and pony show to) always had to take the deal back to the “lender”.The “lender” was a guy (or guys/girls) who sat back and weren’t exposed to the dog and pony show (and the bs) and charisma (my concept and thoughts on it not something that was talked about by the banker). I never ever got to meet with a “lender”. All the lender cared about was whether cash flow was there and there was collateral to pay back the loan.

          16. jason wright

            i can now see who up votes a comment.i’ve down voted your comment to see if disqus also allows one to see the identity of a downer. is this a new feature, or have i just missed it until now?edit: ok, it isn’t showing my id as the downer. probably a good thing for continued harmony in the disqus universe.

          17. fredwilson

            its new

          18. PhilipSugar

            What is interesting to me is the stack.Kind of like a house. If you have no foundation forget about it.Bad plumbing , electrical, HVAC no matter how pretty you make it you are going to have problems.But if you have no style even if you have the above people you won’t get any value.

          19. ObjectMethodology.com

            Sales! ABS !!!.If you can’t sell it then you have nothing. If the product is as great as the inventor, usually, thinks. Then people should sign up before it’s ever built. I’m not saying people will all be ready to buy it upfront. I’m saying if it’s great people will be excited about it..If you can’t sell it how will you every build a business around it?

          20. fredwilson

            some products sell themselveswhich is why i like product more than salesnot dissing sales, it’s importantbut product is most important

          21. William Mougayar

            Fred…Noooooooooo, please. Product is not more important than sales, unless you just want an exit strategy before the business fully materializes.Getting to a good product is tablestakes. If you don’t get there, nothing matters, but as soon as you get there, then Sales becomes really really important.There comes a point where the product is GOOD enough, and you need to start to instill a Sales culture on top of the Product culture that got you there.Look at any mature business, and you will see that Selling General & Admin (SG&A) costs are anywhere from 20-30% of revenues. Yet, for a startup, I often see a much smaller and timid attempt to ramp-up sales. Take HubSpot who is on a growth rampage. Their model is now based on repeatable sales. The more they hire sales people, the more they will grow.There is only one business purpose for any company, and that is to Create a (paying) Customer. Products that sell themselves is a fallacy. You’ll get users, but not buyers necessarily. And we know that large networks of engaged users have to monetize at some point on their B2B back-end.A good product makes it easier to sell. But a well documented & sharp sales process can sell an average product. Give me an average product and a stellar sales force vs. a better product and a weak sales force, and I will take the average product at any time.

          22. fredwilson

            sales is importantbut selling costs are lower for great products than shitty productsi am never inspired to invest in great sales forcesi am always inspired to invest in great products

          23. William Mougayar

            Get both (great products & great sales force). But don’t ignore sales even if you believe you have a great product, and esp. don’t start ramping sales too late. That’s my key message. And for large networks of engaged users, they almost always end-up with 2 products- one for the consumers, and one for the businesses. The businesses have to be sold, or they will not buy, and they also want a great product (e.g. Advertising or something else).

          24. ObjectMethodology.com

            Keep in mind Fred is investing. Most people don’t realize how much sales permeates everything. Many people don’t even realize that when they are looking for a job they are selling themselves.

          25. CalebSimpson

            I agree. My company has no sales staff other than the owners. We had to hit the streets hard in the start, but now the demand is coming to us. I attribute that to a strong product that drives sales on it’s own. We do very little sales, currently.

          26. ObjectMethodology.com

            It sounds like you just don’t realize what you’re saying. You describe an intense selling approach to start with. And now that customers are talking, selling, you still are doing some sales yourselves.

          27. CalebSimpson

            My main point is good products will sell themselves Our largest accounts came to us! True, we were the sales team to start, but now we have none. We do realize we can grow more if we did more sales, but our growth rate is nice and comfy right now, we don’t want to grow too fast.

          28. ObjectMethodology.com

            But Caleb, how did your largest accounts even know you existed? Someone, somewhere had to make it known. That’s part of selling. If you *start* selling a product then it can never sell itself. Because a selling process already started it selling in the first place. Then you’re selling on word of mouth or other selling efforts even if they are not being performed inside your organization. And even if you’re not paying for those efforts.

          29. ObjectMethodology.com

            A great sales force probably doesn’t need any investment to grow and succeed. They can get started with little to no money and they can generate revenue on their own.

          30. ObjectMethodology.com

            Yes, there are many businesses that don’t create any products. They simply sell things. Nothing sells itself. I have some old books in a closet that are for sale. They even have a price on them. But no one has bought. If I simply place those books on a table in the front yard then I’ve started the sales process..I think Fred is playing at words with us. But, I haven’t figured out exacty what the rub is. It sure is fun though.

          31. William Mougayar

            There is a rub somewhere.

          32. ObjectMethodology.com

            Last thing before I get back to selling. Fred may be saying twitter is an “it”. The sales team, the service, etc. is all the “it”. So, “it” sells itself.

          33. ObjectMethodology.com

            “some products sell themselves”.I want to demistify that. Nothing really sales itself. There are thousands of unknown products on shelves in R&D centers as we speak. None are selling theirself. We can say that some products/services take little selling effort. But again nothing sales itself. Even the act of turning on the home page for a web community is part of the process of selling..”but product is most important”.I agree, what is to be sold is most important. You can’t test a market or even know what market to test until you can at least describe the product/service..Awesome, thanks.

          34. fredwilson

            plenty of products sell themselvestwitter sold itselfgoogle sold itselffacebook sold itselfetsy sold itselfkickstarter sold itselfmost of our best investments sell themselves

          35. ObjectMethodology.com

            I can’t see it, sorry. While I’ll agree a great product is easier to sell. Nothing can sell itself. Let’s take an example:.If you create the best web application in the world. But, you create it locally on a laptop not connected to the internet. Then you turn that laptop off and put it aside. The application will not sell..If you upload that application to a web server and point a domain name to it. Then you’ve just performed the first step in the sales process – Making the maket aware. That domain name will be found and at least one person will know the application exists..I think you’re seeing the first step in the sales process in a different way than I am. That’s OK though, because it gives me one more insight into the mind of Fred. My analysis is not complete but it’s getting there.

          36. ObjectMethodology.com

            Fred, are you separating marketing from sales in a strict way here? That may be it.

          37. William Mougayar

            Maybe we are disagreeing on the timing factor, and discerning which product are we talking about: the consumer end one or the B2B one?Twitter, Google and Facebook have salesforces now to sell their products. They wouldn’t be able to grow as such, otherwise. Having a great product that has inherent virality will make things a lot easier of course, but what the users use and what the company sells are 2 different things.For Etsy and Kickstarter, it’s different. The product and the experience are via the transaction, and there are part of the same thing. But if they were to add B2B products, they will need to sell something eventually more pro-actively.When we say Twitter is a great product, you can answer it from 2 sides. As an end-user, it’s a great product, but as an advertiser, I will look at their advertising product offering.Later stage investments (C,D) and public offerings are typically used to scale the business and often include an increased expense to ramp-up sales. The earlier money is typically used to develop the product, no?This has been a good discussion. Could be turned into a post. What is a product? Do you sell it or it sells itself?

          38. ObjectMethodology.com

            Or as I said in my comment to my own comment below. Fred might be separating marketing processes out of the sales process. Which is valid in my view. But, I don’t like to do that because you can spend millions on marketing without getting any results. To me sales is all about results.

          39. William Mougayar

            Yup, sales to marketing linkages are tricky and often get messed-up.Traditionally, Marketing included sales (in the Peter Drucker books) when he says that businesses have only 2 functions: marketing and innovation. Today, we read marketing as selling something, and innovation is really product development.

        3. Tereza

          Does the focus-on-product-only-from-the-start predispose a startup to exit via sale to a strategic acquisition? I wonder if with that start it is possible to grow into a great, standalone, world dominating company (I’m talking B2C here) — there is just so much left to figure out.Most wind up selling their companies to the big names, essentially as outsourced R&D. (e.g. Hi I sold my company to Google/Salesforce/etc., made some coin, here’s my latest startup.)BTW nothing wrong w selling to a strategic…It’s a strategy in and of itself….

          1. ObjectMethodology.com

            Good question. I imagine it would predispose a business to needing an aquisition. But, I also think you could change mid-stream into a sales driven business. It would probably be harder to do the longer you waited.

    2. ShanaC

      there is a timing issue with strategy – I am not mistaken, the dean campaign tried to bring that same coalition together, but it was not ready

      1. JLM

        .Everything in life is timing. The Dean campaign did not have the technical chops or brain power. The Obama guys are technically superior in many ways. Hell, in almost every way.JLM.

        1. ShanaC

          agreed. Whether you like their poltiics or not, thier execution is flawless.I’ve gone on an interview or two, and people ask me what my favorite ad campaing was, and I always mention obama just because that was a brilliant case of ad buying strategically that most people choose to ignore. Considering most of an election is “get the word out” – I don’t know why people ignore it.

          1. JamesHRH

            The strategy – leveraging the new wave of Baby Boom children becoming voter – and its comprehensive tactical executions – social networking, aspirational speech writing, idealism – were, indeed, perfectly orchestrated.

    3. Aaron Klein

      Love this. We actually spent some time updating our mission and values last week. I was blogging about it this morning:http://blog.aaronklein.com/…One thing that we’ve omitted is a separate vision statement from mission statement. Largely because every vision statement we drafted sounded like a not-that-different wording of the mission.By the way, our mission is aligning the world’s investments with investor risk tolerance. The thing I love the most about it is, not only is it critically important for the future hopes and aspirations of millions, but Riskalyze is the only company on the face of Planet Earth capable of writing that mission down on paper and executing on it.

      1. Matt A. Myers

        “… our mission is aligning the world’s investments with investor risk tolerance. The thing I love the most about it is, not only is it critically important for the future hopes and aspirations of millions, but Riskalyze is the only company on the face of Planet Earth capable of writing that mission down on paper and executing on it.”Beautiful!

        1. Aaron Klein

          Thanks 🙂

    4. John Revay

      “I really am feeling like I should be getting a tuition bill.”Me too!JLM – you are one of the professors as well >Check to Austin TX 78705

  4. Conrad Ross Schulman

    Sports and Military epitomize strategy. I would go one step further and say Military is the true epitome of strategy.I highly recommend Its Your Ship by D. Michael Abrashoff. It’s a fantastic read on how to manage from the top down. ENJOY!http://www.amazon.com/Its-Y

    1. Avi Deitcher

      Straight to the Kindle (well, iPad Kindle app). Thank you.

    2. pointsnfigures

      and different sports employ different strategy. The reason football was so popular at West Point and Navy is the battlefield had parallels. Take land, hold it. Drive forward, flank your opponent. In today’s battlefield, it’s more like basketball or soccer. Very fluid.

  5. T E Gautham

    Michael Porter’s “What is Strategy?” (http://hbr.org/product/what… is among the best articles written on the subject.

    1. fredwilson

      yessss. i left that out. should not have.

  6. jason wright

    teachings of a startup incubator unit i was once enrolled at;”strategy= what you’re going to do””operation= how you’re going to do it”there’s much nitty gritty within this basic outline.

  7. WA

    Inclusive of all other strategies entering your market via trust based relationship building on a platform of dependability, credibility and reliability (services marketing excellence) is important. Truly a differentiator that is a great behavioral bond.

  8. William Mougayar

    I love this topic. I’ve been thinking a lot lately about how traditional management concepts apply or don’t apply to the world of Startup Management. (My upcoming venture at http://www.startupmanagemen…)You need to add Carl von Clausewitz’s On War, Ansoff’s Product-Mission matrix & Porter’s competitive forces framework to complete an education on strategy.I’ll add a couple of my own contributions for understanding Strategy & its application.1. You can have more than one strategy simultaneously. (Eg 1 for market development, 1 for product, 1 for recruitment, etc.)2. Your product must contribute to the achievement of your Strategic Intent. (Many startups focus too long on the product & don’t start executing on the rest of the realization of their business model).3. You can change your strategy at any time.4. You don’t have to reveal all elements of your strategy.5. Strategic Planning is an essential exercise. Do it.

    1. Avi Deitcher

      Cool. Just signed up to the mailing list.

    2. ACR

      Two good recent ones on WWIIEngineers of Victory by Paul Kennedy: WWII from methodological/technological perspective – how to get the convoys through, how to escort bombers to Berlin and back.Masters and Commanders by Andrew Roberts: WWII from grand strategy perspective – controversies and debates between US and UK, particularly over timing of Overlord.

  9. Tom Deierlein

    Strategy comes from Greek stratēgía generalship. Tactics comes Greek taktikós fit for arranging or ordering. Tactics are the actual means and specific actions used to gain an objective, while strategy is the overall campaign plan.

  10. JLM

    .If you want a great historical and practical read on tactics, read Rommel’s “Attacks”.This is a memoir of Rommel’s exploits in WWI in the Italian mountains. It is very well written and because it was written by a real soldier, the detail is finely crafted.Nobody but a soldier cares about how steep the ground was or whether there is sufficient water or other such tactical niceties.I have read this book about 10 times and every time I learn something new.This is the book that Patton was referring to when he fought against Rommel in N Africa after Rommel bloodied the Americans at Kasserine Pass and Patton was put in charge and supposedly said: “I read your book, you son of a bitch.”Patton understood exactly what Rommel’s Africa Corps was doing tactically because he had read Rommel’s book and studied it.I think that Rommel was actually home sick in Germany when this encounter was supposed to have happened.As a platoon leader and company commander, I could relate directly to Rommel. “I read your book, you son of a bitch, when I was a cadet at VMI.”Read Mannstein, Moelke, Guderian to get an idea of how creativity can drive strategy and tactics. Of course, I always remind folks that the Krauts came in second or third in WWI and WWII but they had the process down pat.JLM.

      1. JLM

        .That is the one. I have a weathered copy from my cadetship that is not so nicely turned out. It is a great read. I have walked some of those Italian battlefields.The German-Italian fighting in WWI is not widely studied.This is where the Desert Fox learned his trade and he was damn good at it.JLM.

        1. Avi Deitcher

          The nice thing about books beyond copyright, free digital versionshttp://www.epubbud.com/book…I see there are no maps in it? I prefer maps, highly visual.

          1. JLM

            .There are maps and sketches in the original. Such graphics are necessary to understand the terrain and tactics.I wish that military maps in books were huge. They are so important to understand things.JLM.

          2. Avi Deitcher

            I went to a class on the book of Kings (Biblical one), two summers ago. The instructor took the narratives from the Book of Kings, added to it the findings from the Mesha Stele (fairly recent finding), and used Google Earth on a large-screen projection to literally walk through the events. Was amazing.All you need is a mash-up for each book…

          3. ShanaC

            that sounds like a good class !

        2. Avi Deitcher

          And thank you.

  11. Shoe On Head

    v cogent thoughts. i see it as the in-betweenness of the following:”To see what is in front of one’s nose needs a constant struggle.” – George Orwell“Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things.” ― Miyamoto Musashijohn hagel has some useful points. strategic focus as two horizons:<snip>”…I believe that the approach to strategy changes, in a fundamental way, particularly in a company. We’re all familiar with the five-year plan: you develop a detailed plan for each of the next five years, and you execute against that. In a less stable world, where there’s more unpredictability and more rapid change, those five-year plans rapidly become obsolete and you just sit there and say: ‘Well, now what do I do?’My sense is that you become much more effective if you shift your strategic focus to two horizons. One is a 5-10 year horizon, and just force yourself to say, with all the uncertainty: ‘What do I think my market or industry is going to look like, 5-10 years from now? And given that, what kind of company do I need to have in order to be successful in that market?’ And not a detailed answer to those questions, but just enough to give you a sense of direction.And then flip to the other side and focus on the next 6-12 months, and say: ‘What are the two or three things that I could do today and finish in the next 6-12 months that would accelerate my movement towards that longer-term destination or direction?’ And then, at the end of 6-12 months, constantly reflect: ‘What happened? What did I learn from that experience? For the next 6-12 months, how could I achieve even more impact and accelerate even faster towards that next direction?’ In that kind of model, the 1-5 year horizon becomes pretty irrelevant. All the actions, either farther in the future or right today, in 6-12 months..”<snip>

    1. JLM

      .An interesting phenomenon today is that strategic plans have a much shorter shelf life and “sell by” date than ever before. Not because they are not well crafted but because the environment in which they are set is changing rapidly.They have about a 3 year useful life where once upon a time they were good for 7-10 years.This is an important consideration for CEOs and companies.The most important question a CEO should ever ask is:”What have our best people done today to advance the Vision of this company?”Because if your best people are not engaged, then nobody else is.If the answer is “nothing”— you are screwed.JLM.

    2. fredwilson

      yes. strategy changes. it must change. when to change, well that’s a longer discussion.

    3. ShanaC

      shouldn’t the strategic plan be longer in time scale?

      1. Shoe On Head

        not really in tech. metcalf/moores laws make visibility v tough

  12. kidmercury

    great post.spurs are very close to getting this one locked up, i think they can do this. danny green finals mvp? sure is looking like it…….though tony parker’s performance last night was insane.

    1. JLM

      .This one is going 7 because the Heat will be coming out with a vengeance next game and those old, wily, clever Spurs will let them run wild. Blow their wad and punch themselves out.How can Danny Green possibly be shooting the way he is? This has to be evidence of a deal made with the Devil. It defies a statistical bias of incredible proportions. The rest of the leagues shoots 39% and this guy shoots 68%?This will be a victory for the Old School. The Spurs smell it and Parker, et al, is going to take it home.JLM.

      1. fredwilson

        Yup. I said the same thing in another comment in this thread

        1. JLM

          .You can see it in the Spurs’ eyes — we used to call it the “kill pussy” look in the Army. Not sure why.I get a kick out of seeing Coach Pop chewing out guys who have been on his team for almost two decades. They have a hierarchy.They have a hierarchy wherein he coaches them when they need it — we all need a bit of coaching from time to time — and otherwise he lets them run the show themselves.His inspiration of Manu Ginobili was simply brilliant. To coax that performance out of such a star when his confidence was down was coaching genius.There are some great lessons to be learned for sports particularly when they are Old School.Peter Holt, the Spurs owner, used to be in the Austin-San Antonio YPO group years ago before he owned the Spurs. He is a guy everyone would describe as “steady”.I always liked him though I have never hit him up for tickets. Maybe I should.JLM.

          1. JamesHRH

            He has their complete trust because he has protected them when they needed it.Duncan – reduced minutesParker – off the court issuesGinobili – playing him against 2nd stringers

          2. JLM

            .Little known fact.Duncan is in the middle of a fairly untidy divorce right now.His wife might be a candidate for a strangling given the timing, no?JLM.

          3. JamesHRH

            Could be giving him an edge? An extra thing to battle?

          4. JLM

            .Applied aggression — makes sense.Insightful on your part.Well played.JLM.

    2. fredwilson

      I think this goes seven games. Each team seems to shown up on alternate nights

      1. JamesHRH

        I think the Heat mount a furious effort to start game 6, only to be worn down. Spurs in 6 was my call and I am sticking with it.This series is a great strategic battle – pressure / turnover / transition O strategy of Heat versus controlled court coverage D & meticulous court spreading O of Spurs.Not surprised that there are few close games….

    3. William Mougayar

      1 word: Strategy.To hear the Miami coach in the post-game re-state that the Spurs picked at his men one by one after the fact just shows that the Spurs had that Strategy locked and surprised the Heat with it. Now, they’ll have a different strategy in Game 6.

      1. JLM

        .Coach Pop is an Air Force Academy grad and knows something about strategy.JLM.

        1. William Mougayar

          It shows. The Spurs are definitely popping-off with him 🙂

        2. pointsnfigures

          played with one of the guys that recruited me there.

        3. JamesHRH

          You could argue that ‘riding Duncan as long as I can’ is not too hard to figure out, strategically 😉

  13. Elie Seidman

    A couple of books on the topic that I’ve enjoyed: – The Yom Kippur war- Understanding porter

    1. JLM

      .Given what is happening in Syria today, the Yom Kippur war is a very interesting frame of reference.I was in the Army in 1973 and traveled to Israel shortly after the shooting had stopped.Interesting side note: The crossing of the Suez Canal by the Egyptian combat engineers and armor had been the class problem for a recent US Command & General Staff College class at the time of the war. There were Egyptian officers in that class.The Egyptians bridged the Suez Canal — not a very hard bridging assignment and then used massive fire hoses to blast the sand dunes on the opposite side whose height and loose sand were an impediment to the easy movement of armor out of the bridge zone.The Egyptian combat engineers simply washed the dunes away and the armor swept through those gaps into the desert beyond.This was the winning solution at C & GS that year.Folks do not recall that Sadat got in peace — the return of the Sinai lost in the 1967 War — everything he had hoped to gain with tanks.Ariel Sharon fought a magnificent armor battle and literally ran the Egyptian tanks out of gas in the desert before the threatened Russian intervention could materialize.What folks forget is that Sadat had thrown the Russians — 20K advisers — out of Egypt in 1972 and then bolted the Russian alliance. He shrewdly understood that the Americans would make a better long term peace with the Israelis.Why is this important today?Syria is the last Russian vassal state in the Middle East and the Russians are still smarting from Kissinger’s seduction of the Egyptians after the 1973 War.History repeats itself. Mark my words — Syria could easily start a big war in the Middle East with the inclusion of the Russians, the Iranians and the land bridge across Iraq for the Iranians. This is going to get very shitty.JLM.

      1. Elie Seidman

        That’s an amazing story. The Egyptians used a strategy developed at C & GS to bridge the (very lightly defended) Suez? The battle stories of the Yom Kippur war are unbelievable. The Sinai and Golan Heights tank battles are, I would imagine, some of the most complicated, critical, and interesting tank battles in the history of the tank. The heroes of modern israel were in tanks on the Golan Heights during those first hours of the war. Outnumbered at least 10:1, and in many cases operating with inferior tech (no night vision), they inflicted massive losses on the Syrian tankers and prevented northern and central Israel from being overrun. Both sides suffered huge losses of life. What’s interesting about this book is that inline with what you’re saying, it paints the Yom Kippur as the pivot from which all modern Middle East history since can be understood. 50 to 100 years of middle east development led to the Yom Kippur war in 73. And the Yom Kippur war is at the core of much of what has happened – and is happening – in the forty years since.

        1. JLM

          .The Yom Kippur War was the last time the Arabs — who grossly outnumber the Israelis — were able to coalesce against the Israelis.The Arabs lost because they failed to concentrate their forces and Egypt, Jordan, Syria and Iraq (many forget that Iraq was on the battlefield) all fought separate wars.The Israelis were able to use the terrain and their Air Force to their great advantage.The US was repainting M-60s and putting them — fully gassed and armed — into transport aircraft at McGuire AFB and flying them to Israel to replace battle losses. These tanks went from the belly of those aircraft right to the battlefield under their own power.That was the nature of the US-Israel alliance. Something we have lost though the passage of years.The Syrians thought the Egyptians had betrayed them — and they had — when Sadat made peace. This turned out to be a very good peace for a long time that the Obama administration screwed up by allowing Mubarak to be overthrown by the freakin’ Muslim Brotherhood.The use of tanks, artillery and air power in the Sinai is one of the greatest feats of arms ever.Ariel Sharon fought a brilliant battle.JLM

          1. Elie Seidman

            It’s an amazing story. One of the decisive advantages that the Israeli’s had – particularly on the Golan Heights – was their superior gunnery skills. They were massively outnumbered but they got incredible leverage of their limited tank resources by being able to engage the Syrian tanks long before the Syrians could engage. At the Valley of Tears, the Israeli’s were able to achieve a nearly 10x advantage in the destruction of materiel. http://en.wikipedia.org/wik

          2. JLM

            .In the American Army in Europe the tanks used to go to Grafenwoehr for gunnery training.In the 1970s, everybody thought the Russians were coming along the northern German plains and out of Czechoslovakia through the Fulda Gap — so tank gunnery was very important.The Americans would arrive shooting 65% at 1000 meters and leave shooting 95% at 2000 meters.Gunnery is an art and the ability to fire every 20 seconds increases a tank’s life expectancy.The Israelis were hopelessly outnumbered but they could easily outshoot their enemies — particularly the Syrians. The Israelis put three rounds down range for every one of the Syrians.Little know fact — the Syrians had much, much, much better targeting and night vision equipment.The Israelis were using British Centurians and their battlefield losses were made up with American M-60s.Talk about a quick orientation program.The re-equipping and re-constitution of battle scarred Israeli tank units v the Syrians on the Golan Heights is the best such battlefield game day accommodation in the history of tank warfare.Some armored brigades finished the day as armored battalions without losing any effectiveness.JLM.

    2. fredwilson

      I can’t believe I left Porter out of this post. Hand to forehead!

      1. Elie Seidman

        🙂 His reputation is deserved. “Understanding Porter” makes Porter accessible. It’s an easy read but great material.

    3. ShanaC

      why the yom kippur war?

      1. Elie Seidman

        It has many aspects of strategy- operating with limited and depleting resources (the US had to air resupply the Israelis during the war)- Operating with inferior resources (Israeli’s did not have night vision and many of their tanks were demobilized – they literally had to be assembled before they could be used. But the Israeli’s operate a citizen army so they were accustomed to having to deploy rapidly)- finding a fulcrum to magnify the impact of limited resources (Israeli tank guns could engage at a much longer range than the Syrians thereby overcoming the massive scale advantage the Syrians had)- Decision making under severe duress – much easier to make a strategy when you’re sitting in a class room and there is no practical consequence of your decisions other than the grade you get on the test. By the accounts I’ve read, Ariel Sharon was a natural at this. He was not particularly good at the politicking of Army at rest but when the war was on, he was the best there was. It seems Patton was like this as well. – Coming at the other guy where and when he does not expect it. (the Israeli army was at home or in the synagogue when Syrian tanks started moving on the Golan Heights)- having a deep bench of talent – the war was largely won by the small number of field tank commanders who were already in place when the war started. If those young commanders on the Golan Heights had not been able to develop and implement an effective strategy, it would have been over long before the big strategy coming from the generals could have made a difference.

  14. Peter

    A VC friend who dedicates his blog to translating Sun Tzu’s military strategy into business advice: http://suntzutheart.com/.

    1. fredwilson

      That’s awesome

    2. Vineeth Kariappa

      can i copy it 2 my site?

  15. Seenator

    Created a hackpad with links, articles & books to great resources on learning about strategy… here is the starting list…People can add to it here: https://strategy.hackpad.co…Strategy & Structure – Alfred ChandlerPractice of Management- Peter DruckerWhat is Strategy- Michael PorterGrowth Outside the Core – Chris ZookInnovator’s Dilemma – Clayton Christenson

    1. William Mougayar

      For Marketing, you need to add Marketing Warfare by Al Ries & Jack Trout, as the best application of the art of war into marketing strategy practices.

    2. ShanaC

      maybe we should fo a bookclub?

    3. fredwilson

      Awesome idea

    4. fredwilson

      Just tweeted that out

    5. awaldstein

      This is terrific!At the end of the day, tweet this out and I’ll recirculate it to my networks!

    6. Elie Seidman

      How To Advertise by Roman (it’s actually a book on marketing with a small section on Advertising)Understanding Porter by Joan MagrettaGood Strategy, Bad Strategy – Richard RumeltHow Will You Measure Your Life – Clayton Christensen (it’s a book on strategy for life using the ideas of strategy from business)

  16. aweissman

    Maybe a strategy is a noun, and a tactic is a verb

    1. fredwilson

      Yup. But strategy must move. It can’t stay fixed forever.

    2. ShanaC

      that might be a good way of separating the first from the second, since even now I am a bit confused as why timescale matters

    3. JamesHRH

      Both nouns.

  17. William Mougayar

    Surprise is also an important element of strategy. Once your strategy is entirely known, it become less effective.

  18. awaldstein

    I thank you for this Fred. This is core to what we all do for a living.I’m going to take slightly different view from what you say but more in contrast to what @JLM:disqus and @wmoug:disqus state in the comments.Strategy ‘up there’, tactics ‘down there’ is textbook marketing. I just don’t ascribe to it personally. Building marketing and brand driven businesses for some time, experience has taught me a different perspective.Since it’s in vogue to quote ourselves lately I believe that “The more you separate the strategy from the execution, the more you wall the actions from ideas that directed them, the more you lose touch with the dynamics of the market.” From this post: http://awe.sm/aF5Wy.This doesn’t mean that thoughtful understanding of how to attack the market isn’t key. It means that your vision of what you are about and a deep core understanding of your market value, drives strategy and tactics into a much tighter pairing in today market, with our new set of customers and the speed of iteration that the web enables.I thought I was going to have to brush off my old post when I saw this topic earlier. I think I’m going to stick with it.

    1. Avi Deitcher

      awaldstein I don’t think they are arguing for separation. Drives me bonkers when I work with a company who has a “VP Strategy” who is completely divorced from the day-to-day of sales, mktg, prod mgmt, operations, R&D, finance.*Everyone* needs to understand what the corporate vision and strategy for implementing that vision are, and their responsibility for tactics to execute that strategy. I also think everyone can contribute to it.But I do think they are arguing for the necessity to stop and think.Friday I was talking to two colleagues, both VPs at the same enterprise, both with the same complaint: company moves 100k mph. Why does it matter to them? Sure, burnout, but the main issue? They don’t stop to think *why* they are doing it, and where they are trying to go. 100k mph towards the sun is not getting you to Alpha Centauri (and you’ll burn up pretty quickly, Icarus).

      1. awaldstein

        Great comment. I read blue sky strategy and jumped.Not a big believer in the strategy gap. Not patient with the dullness of lists that most strategists pontificate around.Thoughtful action. Smart execution.Those are the ideas that I try to live and advise around.

        1. Avi Deitcher

          Totally understand, buzzwords that get misused (when they can have real value) do that.

    2. William Mougayar

      “your vision of what you are about and a deep core understanding of your market value,”That’s a key statement. 100%. The challenge is that most startups don’t have a clear enough view of that, early on (or even later for some). This happens usually after product-market fit is achieved. You think you have it, but it’s not all there.This is a great additive to our discussion.

      1. awaldstein

        Morning my friend. And wanted to give you public Kudos on the fundraising work you are doing after your dog’s illness!On above, thanks!Start-up is a loaded word and sometimes muddies the discussion. Hard to apply the same term or ‘strategy’ to a pre-revenue company, one pushes through a niche at $20M and one , doubling down to move globally. All may be in the red, all are really different.

        1. William Mougayar

          Thanks. Speaking of dogs, a startup’s timeline goes in dog years. 3 months are almost like a year, so you’re right that you need to continuously re-evaluate what strategy is in play at any particular time of your evolution.Shameful plug, but it’s a good cause that I’m wearing on my sleeves now, http://pashagivesback.com/ for any dog lovers. Just kicking this off today.

    3. fredwilson

      Your point is one is not up there and the other is not down there, but they are yin and yang and play off each other?

      1. awaldstein

        Yes…and that strategy changes as tactics inform.Tactics get smarter as they are tied to the strategic goals that drive them. And strategy gets more directive as it evolves with the data that actions make known.The old school–make a strategic plan and then let it crash against the market to see if it makes sense–doesn’t make sense to me at all.

        1. JLM

          .Good discussion. I think you may be giving “old school” strategic and tactical planning short shrift.What is lost today is the notion of sound market research — customer contact before finalizing the product such as simple focus groups.Strategic and tactical plans have always had to be informed by the reality of their contact with the marketplace.I can assure you that in the military when the first contact reports come in and there are casualties nobody is defending the status quo and sticking to the plan.The military, like business, should be all about real world feedback into the original planning assumptions on a continuous feedback loop.Shoot, move, communicate, revise the plan.JLM.

          1. awaldstein

            We are contemporaries JLM so old school is where I was taught as well.I don’t give thoughtful and well informed short shrift short though at all. I’ve just applied them to a new market dynamics.I was taught business by Jack Tramiel, an Auschwitz survivor, who publicized the philosophy that “Business is War!’ He went from cab driver to owning Atari company and all their licenses outright.I learned the art of business as war from him well.I also learned over time that this is not my approach to business or marketing. Burning bridges is a poor strategy if you ever want to cross the river again. I know that I always have to work with the people I deal with another time.Different approaches by different people to the same market. And both can win.A pleasure as always!

          2. JLM

            .A pleasure indeed. One of my blind spots is that I have really only been a CEO and founder. Smidgen of angel investing.It is sometime important to remember that theory and practice have more than one way of being applied.JLM.

          3. awaldstein

            Hey–I want you on the wall as a strategist to help protect our freedoms and a friend in life and business!I come from the trenches. Not an MBA but have worked my way up and had great luck. Spent a decade as a hired marketing and sales/BD gun. Before and after as a founder.I like to get my hands dirty but approach marketing with a clean and thoughtful mind.

          4. Tereza

            For years I was a behind-the-curtains strategy person for senior muckety-mucks. It’s pretty equivalent to advance troops/marines or more appropriately probably spy work.We have ways of making people talk.Find out their opinions and then their opinions behind their opinions. Find out what they’re NOT telling you.Today we call it “get out of the building and talk to people”.Still, some people are good at it and lots are not. It’s an old-world skill which is essential today.

          5. awaldstein

            Smart market and customer thinking is neither old school or new, it’s just smart!Been awhile Tereza–nice to see you here.

          6. William Mougayar

            I was educated with the old, but schooled with the new.

          7. JLM

            .Haha, that’s damn good.JLM.

          8. William Mougayar

            I thought it was Ready, Aim, Fire in the army.In a startup, it’s:Fire Fire FireDid I hit something?If I did, then I’m Ready.Now I can Aim.If I didn’t, I will Fire again til I’m out of Amo ($)

          9. JamesHRH

            Lack of ammo kills most startups, for sure.

          10. William Mougayar

            The best quote I recently heard on this is from Ted Livingston, Kik’s ceo. His 3 P’s: Product, People & Pesos.

        2. Girish Mehta

          “Strategy is a pattern in a stream of decisions” – Mintzberg I am new to commenting here, wanted to pitch in that this is a powerful point by Arnold, Thanks. A (certainly correct) response to this can be – Strategy should not be divorced from operations/market reality andcontinuous feedback. This is true, but there is a more nuanced idea here – how strategy evolution is institutionalized over time through execution. The closest theoretical framework to this might be Henry Mintzberg’s concept of “Emergent Strategy” – there was a seminal piece in HBR in the mid-90s on this.To Fred’s point, all strategies have to change over time. When market dynamics demand a very discontinuous strategy shift, an “emergent strategy” model may hurt. When it hurts, the reason is not very different from the reason it worked so well in the past. Thanks again.

          1. awaldstein

            Good quote–new-2-me. Thanks.We market and create strategies on assumptions. Sometimes they are gut based, sometimes corroborated, sometimes not.But we market to assumptions and sometime we are just wrong. Sometimes theres a shift and sometimes we are just executing poorly,Strategy docs in the ether, execution on the ground is just not reality.

          2. fredwilson

            i hope you come back often. this is a great comment

          3. Girish Mehta

            Thanks, this is a great forum.

          4. Matt A. Myers

            Great comment. Do you have a blog and/or Twitter I can follow?

          5. ShanaC

            First off – welcomeWhat kinds of ways can you test out if you’re reasoning will fail in a discontinous period without losing too much ground

          6. Girish Mehta

            Thanks Shana.My sense is – maybe it isn’t so much a test, as an awareness that this is an inherent issue (or even call it a feature:-)) and therefore to constantly step back and complement with a exercise of (re)evaluating deliberate strategy. In any emergent strategy approach, there are still elements of deliberate strategy laid out first, and there is path dependency. What can break is one or more of the assumptions behind an element of the deliberate strategy (which reflected the market dynamics at a different time). Because the emergent strategy approach has worked thus far, you tend to push harder on that lever and now it starts to hurt – because it was derived from a deliberate strategy element that is now not valid. Thanks.

          7. Tobias Stepan

            For those interested in strategy, there is an amazing book summarizing the development of and current theory on “Strategic Management” from Müller-Stevens/Lechner (University St. Gallen). I am not sure it is available in English though.It includes everything from the original HBS Model and traditional strategic planning, to strategy formation based on resource allocation, deliberate and emergent strategies, incremental strategy development patterns, organizational resistance opposing strategy implemenation and newer strategic initiative thinking.You could as well read older books from Bower, Clausewitz, Ulrich, Kirsch, Quinn, Burgelmann, Mintzberg, etc. but their books are time consuming and often not easy to read.

        3. Matt A. Myers

          Wouldn’t tactics be indirectly informing you via user / consumer feedback though?

          1. awaldstein

            But of course.

          2. Matt A. Myers

            Okay! 🙂

          3. Girish Mehta

            Very true Matt. There is a slight distinction though inhaving a “Emergent Strategy” approach. The implications can be profound including how you organize (and hire). Consider for instance the implicit assumption that many orgs operate on – “Structure Follows Strategy; and People Follow Structure”. The degree of freedom in defining strategy can affect where you end up with on people. An important point – Having an “Emergent Strategy” mindset is not the same as lack of focus. Apologies for the long post, to elaborate a little frompersonal experience – back in the mid-90s, I was a wet-behind-the-ears ‘Market and Technology Strategy’ guy at a large tech org. It was a good job, but it was one view of strategy. Over the next 15 years, I moved into increasingly P&L operational roles with the org and eventuallyheaded consumer marketing in a new country market – where I had the oppty to build a team from scratch. In the first job, I was planning strategy over a 12-18 month horizon. In the latter job, I was reviewing business metrics every 4 hours and taking decisions that hit the market in 48-72 hours. I used to tell new hires – the way we hit our quarterly number in B2C is by hitting the weekly number…then repeating that 13 times. We created and executed to a marketing strategy (pricing, positioning, channel model, brand comms) that was substantially divergent from the global strategy, and an org structure that was different from the global structure. HQ was supportive. Interestingly a leading strategy consultancy was asked at an early stage and had a different view of what our country strategy should be. Some elements of our strategy that worked were deliberate and some elements were emergent. The strategy elements that were deliberate were important to the powerful elements that were emergent. There is some path dependency. Thanks.

      2. marvinavilez

        I have been developing an operational framework that enables the formation of these types of plans based upon MOST (Mission, Objectives, Strategies, Tactics). I call it VisualMOST. One needs to take into account that developing Strategies an Tactics can only be done under the context of the Mission and the current Objective. I spent 14 years in the Marine Corps and one the best lessons I learned was the Marine Corp Planning Process (MCPP) The Commander will issue his intent…the Staff will formulate COA (course of action) scenarios. They will develop many and keep the rest at the ready…..what we forget is that the battle field conditions are ALWAYS changing….thus the need for agility. Your strategies and tactics should quickly prove progress or not….if not you adjust and you adjust quickly. That quick adjustment is based upon build Team….a tight team can adjust really fast.

        1. marvinavilez

          Also lets not confuse Operational planning and product planning …..in the early stages of a startup we tend to confuse these two…..

      3. Guest

        For me personally, the product is the yin (female; it needs to communicate to the user and elicit appealing emotions in them) whilst the planning is the yang (male; technical specifications and costing the build require logic and systematics).The product and the plan are complements; it’s not the case that one matters more than the other.Having studied at Mgmt Sch, worked in corporate strategy in CEO-Chairman’s Office of a major bank (pre-crisis), done the Stanford Venture Lab course where they used Steve Blank/Lean Movement’s Canvas and now delivering my startup product to market I have to say…….I don’t personally rely on the step-by-step processual value chains, flowcharts and box models promulgated in Strategy education.I find myself doing things more like when I was as a teenager working in the labs of a big chemco: symbiotically. Plus abiding by my Chinese heritage more than my Western education in mgmt theories.I made my personal logo a red-white-blue Yin Yang for a reason because it marries my East-West self:Blue = blue sky thinkingRed = passionate red-blood executionWhite = pure, true soul values

    4. Kirsten Lambertsen

      What is your recommended reading on this topic? Esp for pre-revenue stage.

      1. awaldstein

        Don’t have a great referral for this.Most marketing blogs are really poor and there is a huge gap of approachable knowledge. Too many pundits at the top divorced from the market. Too many lists at the bottom, drowning in ‘how tos’.I find that I’ve had to write my own pieces over the last few years to answer customer questions.I’m pimping myself lightly here of course 😉

        1. Kirsten Lambertsen

          Fair enough 🙂 I know where to go read.

      2. Richard

        Financial times

    5. Carl Jonas Sjonander

      I read somewhere that the ultimate purpose of a strategy is to get a tactical advantage. And I am thinking, for a startup, what could constitute a better tactical advantage than an awesome product?I am new to commenting here. Thought I’d just pitch in. Thanks for a great forum!

      1. awaldstein

        Hi Carl…Having a great product sometimes is enough but not usually. Got to have it but you still need to discover the market for it.

      2. Donna Brewington White

        Great input. Come back.

    6. JamesHRH

      For most founders, ‘who I am = what we do = mission/vision/strategy’

  19. T E Gautham

    “Information Rules” authored by Carl Shapiro and Hal Varian is a must read for anyone who wishes to understand the underpinnings of strategy (network effects, increasing returns to scale, positive feedback, etc.) in the Information Technology sector.

    1. fredwilson

      I am a big Hal Varian fan#addtohackpad

  20. pointsnfigures

    And as a VC, I assume you get involved in strategy. What happens when the company rejects the strategy and goes it’s own way?

  21. bsess

    Bruce Henderson the founder of BCG is a very under-appreciated writer on strategy. Worth checking out.Also, here’s a post I just wrote on SaaS strategy:http://pandodaily.com/2013/…- The goals for a SaaS company would be things like “change the way X function does Y, be a category leader, etc.” – The strategy would be “achieve lower customer acquisition cost so that we can price lower than competition during market entry then grow aggressively through up-sell and cross-sell” – The tactics would be “leverage inside sales instead of field sales, but do x, y, and z on the service side to ensure low churn rates comparable to those of a higher-touch model”That’s how I think about the three.

    1. Elie Seidman

      Really enjoyed your post

      1. bsess

        Thank you, much appreciated!

    2. William Mougayar

      Secret SaaS ! Haaaahaaa Priceless title. +10 for that.

      1. bsess

        Haha, thanks!

        1. William Mougayar

          That was a badaaS title.

  22. John

    Great topic that I think needs more discussion in the startup world. I think most startups feel a better product is enough. Would love to see a post discussing some recent examples of technology startups that, like Washington, used strategy to win at business.

  23. Rich Goidel

    Excellent Post Fred! This is, IMHO, the biggest challenge that business (people) face. The tendency I see time and again is for people to go directly after tactics, without fully attending to the strategy behind them.If I may share, I posted an illustration about the difference between the two a while back. You’ll find it here: http://bit.ly/17YEv8kAgain, thanks for the insightful, concise post!Rich

  24. Tereza

    When I started training as a strategy consulting backt in ’97, in the first class they taught us strategy comes from “strategos” which is a specifically military term from Greek meaning General.And indeed, when you think about it that way — that you’re the general of your Army and you are competing to win, everything else should flow.-What game are you playing? -Who are you playing against? -What does “winning” mean? How do you measure it, and know when you’ve gotten there? What is the timescale? (1 month? 5 years?)-What customers are you serving? What products/services are you bringing to them? How do you create these products/services?-Who is on your team? -What is your technology/tools/secret sauce?-What are you key milestones? How does that translate into a work plan that is universally understood?-How do you finance it?The questions go on, you dig deeper and deeper and actually spiral around as you develop — but fundamentally you need the answers to align with the Qs further up top. Inconsistencies/rubs produce drag and get flushed out of the system eventually (if you don’t die first). Totally agree with Fred — as you cycle through, revisit the questions and in parallel define what you DON’T do. It is frequently harder to get people to NOT do something than it is to do something.

    1. JLM

      .+1 because there is no +1000 buttonSo logical and so well stated.Well played.JLM.

    2. ShanaC

      welcome back terezawhy do you suppose the not doing is more difficult

      1. Dave W Baldwin

        Pressure, often amplified by the person. You have people that always want to say something (like the person is doing) is simple. A true visionary knows danger spots that can affect end run implementation, focus on that and gain better shot at the product working right and/or fewest errors. Unfortunately, too many worry about what the feel others are saying/thinking about them.

    3. fredwilson

      Tereza’s in the house!

      1. Donna Brewington White

        Nice, isn’t it.

  25. Tom Labus

    Segmentation or customization is an important factor in establishing your strategy. And, at times collaborating with your competitors when it’s a win/win.

  26. Abdylas Tynyshov

    MBA in a blog post huh.. good one.

    1. fredwilson

      178 posts to date and more cominghttp://www.avc.com/a_vc/mba…

  27. Richard

    Back of the envelope product feature strategy

  28. Matt A. Myers

    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?So, applying this post 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 winLuckily 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.

  29. Guest

    @fredwilson:disqus — as well as your great suggested mgmt gurus to read up on and studying sports and military, there’s also strategy in these three games:(1.) Chess(2.) Angry Birds(3.) PokerChess is arguably the best one to learn and practice strategy with. You have a competitive landscape and squares that your pieces need to occupy (a bit similar to a BCG matrix of cash cow, star, dog, problem child).Each piece (an analogy for the skills set brought to bear by your team) fulfils a specific role. Individually, they’re useful. Collectively, if you deploy them strategically, they are the difference between you winning or losing.Your opponent also has their strategy and pieces.Both of you engage in assessing the terrain, positioning your pieces to capture the others’, defending or mitigating against the risk of your pieces from being captured, trade-offs of perhaps losing one piece but gaining an advantage elsewhere (sacrificing a pawn to capture a Queen, for example) and try to dynamically anticipate and respond to changes on the terrain…….All with the aim of winning. And you have to have a high-level view of the board’s terrain as well as the specific goals of each move for each piece (e.g., you may want one piece to hold a certain square to prevent your opponent’s piece from attacking down a certain flank whilst you may want another piece to lure your opponent to break down their defences so you can attack and capture their pieces.)In Angry Birds, your strategy is to do a single strike that kills all the pigs and collapses the structure to get the most points. Every bird that strikes out is a 10,000 point loss so tactically that’s what you try to avoid.Re. “You can’t expect to throw resources at a market and expect to win”……….David had 1 small stone and he struck and killed the Goliath spot on.

    1. pointsnfigures

      David had a greater power on his side!

      1. Guest

        Haha, yes that’s true but it’s interesting how we’ve romanticised it as a fable that the small underdog startup can win out over the big inefficient / ineffective monopolistic incumbent.

    2. fredwilson

      yes, yes, yes

      1. Guest

        For me the Goliath is to do with improving Human-Machine Intelligence: http://www.senseus.co.The strategy has been to locate the Achilles heel of existing human-machine approaches (in much the same way we ID where pivotal points in Angry Bird structures are).And to focus resources to tactically strengthen those points (in much the way that, in chess, a pawn holds a square to invite a pari passu (in which case you capture opponent’s pawn)).During recon a la Sun Tzu, an Achilles heel was discovered.David Ferrucci, creator of IBM Watson, said it was “like an autistic human savant”.So clearly the mathematics underpinning the AI is autistic (it’s logical, rational, binary, probabilistic).What happens when a mathematician thinks outside the autistic boxes and terrain of that game?Maybe they create a whole new game.

  30. BillMcNeely

    A technique I have seen out there but I am not familiar with is the Canvas. Can someone point me to the better articles on the subject?

      1. BillMcNeely

        Thank you so much!

  31. Eric Brooke

    I find people confuse strategy and tactics and ignore realistic goals. Even the best tactics cannot compensate for lousy strategy.This is the way I break it down using the Ws and HA) Why = GoalsThe end result wanted, with a clear indication of achievement. The purpose should be explicit and you should get the Why from the Goals.B) How = Strategyan idea… a conceptualization of how the goal could be achieved. an approachC) What, Where and When = Tactics is an action you take to execute the strategy. operationalFor skiers -Carving your turns better, is a tactic.Choosing the right ski area in the first place is a strategy.

    1. JLM

      .Communing with nature in beauty of the mountains is the Vision.Goings skiing at Steamboat Springs is the Strategy.Picking “Rainbow” is the Tactic.Following the fall line and smoothly carving your turns while keeping both skis on the ground is the individual Objective.Vision, Mission, Strategy, Tactics, Objectives, Values and Culture. All woven together.Love the skiing analogy.JLM.

    2. Matt A. Myers

      It looks like you’re adding the layer of priority.

  32. Ron Kato

    This reminds me of Michael Porter’s famous essay “What is strategy” where he observes “The essence of strategy is choosing what not to do”. Strategy is about focus and having the discipline to stick to it.

    1. fredwilson


  33. William Mougayar

    This sums up strategy:”All men can see these tactics by whereby I conquer, but what none can see is the strategy out of which victory is evolved.” – Sun-tzu

  34. Judd Morgenstern

    “Two areas I have studied carefully are sports and the military. Winning teams and winning armies have often won because they have out strategized the losing team”No doubt a lot of business strategy is rooted battle pedagogy, but we really need to move beyond this level of thinking. Unlike sports and warfare, business strategy need not be a zero sum game.This is often why incumbents get disrupted: they focus only on beating their competition instead of making great products/services for their customers.It would be great if businesses started strategizing by figuring out how to help their customers win instead of how to make their competition lose.

    1. Guest

      + gazillions for this!

    2. JLM

      .I agree with you more than you agree with yourself.The real issue is the definition of victory.In the strictest sense, the greatest military victory is never going to war at all.JLM.

    3. fredwilson

      i agree

    4. takingpitches

      Nice point. Relatedly, much of big innovation (Google, Facebook, Amazon, Twitter, etc.) is really about changing the game at least at the founding moment/while the companies are exciting.

  35. Sean Hull

    The folks that are good at this type of strategy are incredibly creative. It’s not easy to think outside the box, and be the first one to execute right. Great post, and thx for the Chandler recommendation.

  36. neilwlevine

    You might be interested in a parallel conversation that Thomas Ricks, an author of books about military strategy, had while looking at business strategy books in the context of war over at his blog on Foreign Policy magazine. Specifically, he was reading Rumelt’s Good Strategy, Bad Strategy:http://ricks.foreignpolicy….http://ricks.foreignpolicy….http://ricks.foreignpolicy….http://ricks.foreignpolicy….http://ricks.foreignpolicy….http://ricks.foreignpolicy….It is striking that in both foreign policy and business there is so much confusion about what strategy actually is with recourse to each other to learn about it.

  37. Guest

    Quality comments! (will shut up now, you know, strategy 🙂

  38. bernardlunn

    Here is my take on vision to mission to strategy: This is the “fit to the future” phase. First you have a vision of “a world where….”. From this you have a mission for the venture along the lines of “in this future world, we will…”. Finally, you have a strategy, as in “we will do this by….”

  39. ObjectMethodology.com

    Also keep in mind sales is king. If you can’t sell your product or service then you can’t base a business around it.

  40. Marcus Ellison

    If you look at Southwest’s 10 points…- Remain a short-haul carrier, under two-hour segments. – Utilize the 737 as our primary aircraft for ten to twelve years. – Continued high aircraft utilization and quick turns, ten minutes in most cases. – The passenger is our #1 product. Do not carry air greight or mail, only small packages which have high profitability and low handling costs. – Continued low fares and high frequency of service. – Stay out of food services. – No interlining…costs in ticketing, tariffs and computers and our unique airports do not lend themselves to interlining. – Retain texas as our #1 priority and only go interstate if high-density short-haul markets are available to us. – Keep the family and people feeling in our service and a fun atmosphere aloft. We’re proud of our employees. – Keep it simple. Continute cash-register tickets, ten-minute cancellation of reservations at the gate in order to clear standbys, simplified computer system, free drinks in executive service, free coffee and donuts in the boarding area, no seat selection on board, tape-recorded passenger manifest, bring airplanes and crews home to Dallas each night, only one domicile and maintenance facility…. You soon discover that the lens between tactic and strategy remains unsaid because – though you need both – what’s most important to a company is that there are clear, consistent practices to follow that work.The most difficult part about building a company is figuring out:- What works- Understanding why it works- Grasping when to change- Knowing when not to change

    1. JLM

      .Herb Kelleher was a whiskey drinking, skirt chasing, chain smoking lawyer who had a head for businesses making money and keeping it.SWA was launched by breaking the rules including the regulatory rules.They have stuck to their principles since the hot pants and peanuts.JLM.

  41. Semil Shah

    I don’t have a ton of Valley experience, but in my limited time here, I’ve found generally that most people in startups have a negative connotation with the word “strategy.” I don’t know why that is, but I have felt it strongly.

    1. William Mougayar

      Why is that?I understand if one ignores it in the very early stages, but I think it’s a flaw if a startup ignores rigorous strategic planning as soon as some market acceptance is achieved.

      1. Semil Shah

        Hey William. I don’t really know. I have theories, but those are just my two cents. Generally, I believe people here view strategy as not being operational and/or able to execute, and operating and execution are given preference. Again, I’m a sample size of one, only been here for a few years, but is something I’ve seen consistently during that time out here.

        1. William Mougayar

          It intrigues me to find out too. It would be a good thing to dive into eventually.Strategy development and planning come with a bit of organizational maturity. It’s something that gradually becomes more important as your footprint expands and as you start to touch a lot more customers, markets, users, partners, etc.

    2. fredwilson

      i am working to change that

      1. Semil Shah

        That’s great….I’ll put on my list to blog my experience as well, will send and post here, too.

      2. Matt A. Myers

        It might have a negative connotation or feeling due to majority of people may not really having a solid strategies or understanding/confidence of strategies.



      4. ishowman

        I’d like to suggest this is because it is the singularly most over-used word in corporations – places where anything, even buying coffee, is positioned as a “strategic” action. True strategic thinking is both complex and rare and should surely be a requirement in defining a scalable startup anyway. That said, I think Semil is observing people’s disdain over hyperbole. Great piece as always Fred!

      5. Semil Shah

        Wrote some brief thoughts on the matter of strategy, again — confined to my own experience: http://blog.semilshah.com/2

        1. maryjones115

          Nice to read..



  42. Youssef Rahoui

    Agreed. In chess, they say that Strategy answers the question “What?” while Tactics answer the question “How?”. Along these lines, I would add that Mission answers the question “Why?”.PSChess is an outstanding school for Strategy: you’ve got to manage space, time, psychology, “team”, competition, threats, opportunities, etc.

  43. William Mougayar

    Lest not forget Henry Mintzberg who was very influential in defining strategy as a process and wrote numerous books & papers on it. His 5 P’s of Strategy are:1.Plan2. Ploy3. Pattern4. Position5. Perspective”As a Plan, strategy needs to be developed in advance and with purpose. As a Ploy, strategy is a means of outsmarting the competition.With strategy as a Pattern, we learn to appreciate that what was successful in the past can lead to success in the future.With Position, strategy is about how the organization relates to its competitive environment, and what it can do to make its products unique in the marketplace.Perspective emphasizes the substantial influence that organizational culture and collective thinking can have on strategic decision making within a company.Understanding and using each element helps you develop a robust, practical and achievable business strategy.”

  44. Gordon Bowman

    So where do you think the Objectives and Key Results (OKRs) framework fits into all this?Seems like it sort of straddles both strategy and tactics, no?http://startuplab.googleven

    1. fredwilson

      it flows from strategy and drives tactics

    2. William Mougayar

      You need Objectives in every area where Results and Performance are going to vitally and directly affect the survival or prosperity of your business.

  45. Jay Janney

    Michael Porter has a classic HBR article titled “What is strategy”?, I’d endorse adding it to your reading list. I require my students to read it, both ENT and non-ent majors. He argues for doing things differently, as well as knowing what you do NOT do…

  46. george

    Perhaps this helps explain the doctrine…

    1. george

      Trouble adding the exhibit, first go around…try again

  47. Teren Botham

    There can be no better time and team than now that wins primarily on Strategy.. Go Spurs

  48. CalebSimpson

    What advice would you give for a young company that doesn’t have a management structure so to speak and the owners are running just about every aspect of the business? We find ourselves so busy with the day to day operations we don’t have time to focus on strategy. Although we do have goals, and certain “strategies” to help us stay on mission, neither of us actively plan for the future right now. Currently demand is continuing to come to us with very little effort.

    1. fredwilson

      go on a two day offsite together

  49. Tom Asacker

    War is a poor metaphor for business in a rapidly changing marketplace. So is sports. Think about the word “competition.” It’s from the Latin “competere.” It means “seeking or striving together.” The competitive paradigm forces you to compare yourself to others. To align your thinking and action with others. Others who are like you. And so inevitably, you begin focusing on the wrong things.It’s like running a road race. At the start of a race, you have a panoptic view. You’re aware of everything and everyone. But as the race progresses, you tend to focus narrowly on those few runners nearest to you. Your “competitors.” Instead of viewing your work from this classic competitive angle, try seeing it from a customer’s viewpoint. This new view will make all the difference in the world. To them, to you, to your people, and, inevitably, to your bottom line.



    1. fredwilson


  51. juegos para

    I need a working strategy can give me to share



    1. Matt A. Myers

      I think I like this version best.Edit: Going to add it to bottom of http://mattamyers.tumblr.co… unless you want to comment there too

    2. Chris Conrey

      Strategy = I’m driving from LA to NYCTactics = I’m going to take this road right now and see what construction/traffic etc look like as I go.

  53. Tyler Hayes

    American Revolution. Not Revolutionary War.My 7th grade history teacher would flunk me ex post facto if I didn’t mention this.

  54. JAG

    Perhaps the losses in some of your investments was a result of entry too early (pre proof of concept). Or perhaps the strategy never was structured with a well designed structural context. I too have invested too early and have come to learn the critical importance of a well defined vision and purpose anchored to a strong questioning of the current reality (the integrity of the facts).

  55. Christopher Mance II

    Michael Porter has a few great articles in this area. I love how he explains strategy using Southwest airlines as his case study. If you haven’t read it, Google “michael porter what is strategy” and you won’t be disappointed.

  56. DanielCoontigo

    I´m working in phd about strategy and I workd like Strategy consultat for start uos, and the problem I thinks is that we consider strategy like something old and fix, now is more cool speak about Scrum, Lean, Can-van… but finally we are speacking about agile strategies!

  57. Paul Gebel

    I love thinking about this stuff, and I’ve found that “Strategy” and “Operations” are frequently blended together in relation to “Tactics”. To paraphrase the organizational methodology that I cut my teeth on:Strategy provides vision and focus for operational development and execution. This is where a leader establishes policy to drive operational planning. The strategy and policy built at this level of business are shaped by vision and values, providing a framework for conducting operations. Activities at the strategic level define business objectives and apply across the organization and its divisions, such as acquisition, logistics, communications, and business intelligence.Operations link tactics to strategic objectives. Operations are the design and conduct of management using operational art – “the application of creative imagination by [managers] supported by their skill, knowledge, and experience – to design strategies, campaigns, and major operations and organize and employ [business units].” Operational art is used to determine when, where, and for what purpose tactics will be employed and to influence the business disposition before market entry. Operational art governs the deployment of project or product resources, and their commitment to enter, withdraw or refrain from a market sector.Tactics are where products and projects are planned and executed to accomplish operational objectives assigned to business units. Activities at this level focus on the the timing and arrangement of business elements in relation to each other and competitors to achieve tactical objectives. Tactics are normally a short-duration action. Tactics are the employment and ordered arrangements of resources and business elements in relation to each other.(Military and business planning don’t always have a 1:1 correlation, but if you’re interested in a crash course: http://www.dtic.mil/cjcs_di

  58. James Ferguson @kWIQly

    Nice classification of ideas.I think I disagree with Fred on taking a great product without a plan and see JLM s view more (Acknowledge that a defacto plan may be informal and provisional and fluent – and executing on that iterating as necessary can be the sign of a great team)To me any company must have a product domain (if not a product) in which they search for fit. Awareness of this domain is an implicit underpinning of a nascent plan (even if as JLM clearly puts it – they intend to conduct “reconnaissance in force”).Reconnaisance suggests perception of territorial advantage, provisional hypothesis about access and notions of means (troops, apps, machines) to dominate it.A fruit producer in a fruit market – Does she sell to local restaurants, flood the market , bring a juice press and a whiteboard to draw promotions, or just wander round with a handful of grapes offering a free taste?? Whichever route she takes – she has a plan (regardless of how permanent, provisional or formalised it may be). The best executors can execute despite tactical change and in varying environments. At times of great change (technology / market) lightweight plans are more adaptable – At time of paradigm shift (invention of telephony or other disruptive change) adaptability and exploration of new refined pain points is necessary.Only in very big stable markets do very fixed plans create benefits (planning a new x nanometer multi-core chip processor might be great example) the benefits, metrics, features and distribution channel are known so execution becomes continual.

  59. Alexey Semeney

    Agree with your thoughts about the strategy. I would even say that this is the only way to win – have better strategy.Thanks for the books, also would recommend this one – “The Art of War”

  60. jean

    when small things put up in a right way and desired direction its called a perfect strategy

  61. Virginia Rush

    Grimlock talk truths.

  62. William Mougayar

    Charlie, You bring up a very good point that I didn’t see covered here yet, and that’s about the Resources factor.Invariably, your strategy is always dependent on your available resources.

  63. William Mougayar

    …or do more than you can :)Punch above your weight. Exceptional people over-achieve X2 to X10 others.