Recently I was talking to an entrepreneur that was making good progress in his startup. After signing a couple dozen customers it became clear that there were two strategic directions to take the business, each with their own pros and cons. We got to talking more about the strategic directions, and even after drilling in, both appeared favorable.
Here are a few questions to ask when comparing two strategic directions:
- Of the existing customers, how many fit the proposed directions? How many are good fits vs OK fits for the new directions? Why?
- Which direction has the largest total addressable market?
- Which direction is growing fastest?
- Which direction has the most competition? How innovative is the competition (e.g. most incumbents have difficulty innovating)?
- Which direction excites the team the most?
Tweaking the strategic direction in a startup is more common than expected. In fact, there are many success stories of startups that started doing one thing and ended up doing something entirely different. Regardless, comparing strategic directions is a normal part of the journey.
What else? What are some more thoughts on comparing two strategic directions?
2 thoughts on “Comparing Two Strategic Directions”
A few other things to consider.
1- is the niche focused enough where you can be a category leader and differentiate from the other competitors
2- are you capitalizing on the core skills and passion of the founders where the skill sets and experience help to differentiate
3- by changing direction can you eliminate any head count that is not a good match and bring in other more strategic talent or staff that is better equipped to elevate the business in its new strategic direction
WOW David Cummings and David Williams! This post and reply were timely for me.
Just days before Christmas, the FundOurCommunity team came to an agreement that we are going to sell our company to anyone interested for a fraction of the cost to develop. Though we have raised thousands of dollars for others, we decided to pivot away from traditional crowdfunding and have moved toward developing a truly unique way to help fund parks’ and campgrounds’ projects across the country using technology. We are currently negotiating with parks systems on both coasts to test the new technology in the coming months including a park system here in GA.
It was difficult to come to the decision to pivot away from something we truly love but felt it was time. David Williams’ 3 points were pretty much our check list and right on as our rationale for change. We are pioneers here and very excited about this new direction and hopefully “capitalizing on the core skills and passion of the founders…”
As with Williams’s # 3, we are now seeking one or two engineer/partners to join new team, one with an expertise with ruby-on-rails and a second with an expertise with mobile technology development.
Time will tell if we made the right strategic adjustment but this post certainly helps affirm our moving forward in the right direction.