Imagine yourself on a small boat with ten holes leaking water into the boat, but you only have enough material to cover seven of them. You’re five miles from the shore, and the key to reaching it lies in deciding which seven out of the ten holes to cover. This scenario perfectly encapsulates the essence of strategy: making tough choices to maximize your chances of success.
Michael Porter, a renowned business strategist, once said, “The essence of strategy is choosing what not to do.” This statement rings true across various industries and organizational structures. Unfortunately, too many entrepreneurs, both young and seasoned, fall into the trap of trying to optimize for everything. If you are trying to optimize for everything, you’re optimizing nothing.
Time, money, focus, and willpower are limited resources. Spreading yourself too thin can set you up for failure. As the proverb says, “If you chase two rabbits, you’ll lose them both.”
A lack of focus can lead to, difficulty in communicating your company’s purpose, a team that feels directionless, and increased development and maintenance costs. Start-ups, in particular, must deliberately choose not to pursue certain opportunities. This might include deciding not to build a particular feature, avoiding market expansion prematurely, or not targeting specific client profiles that might be too costly to acquire or maintain.
There are three major issues I commonly come across in people’s approach to strategy
- A lack of priorities leads to a diluted focus and scattered resources.
- Deciding with intuitions instead of data leads to misguided choices, unrealistic expectations, and building something nobody wants (to pay for)
- The inability to adapt (often caused by the sunk-cost effect) leads to wasting time and resources on things that do not work (anymore)
In conclusion, crafting a successful strategy involves making tough choices, understanding the limitations, and focusing on what truly matters. Remember, sometimes the key to success lies not in what you do but in what you choose not to do.
Here’s a high-level overview of the steps I follow when I make strategic decisions about product management.