Strategy is critical for companies, but if the market starts talking, be prepared to evolve
I've found myself saying "events overtake companies" a lot this week. I'm not sure exactly why it was the phrase of the past week, but I did spend a lot of time talking to entrepreneurs running businesses that are growing rapidly, causing the founders to rethink their strategic plans.
I think less than 20% of the companies we back end up doing what they started out planning on doing. They build something, get it into the market, and then things happen. Often it turns out the market wants something a bit different than they are offering. Or that the users adopt one part of the product and don't use another part very much at all. Or developers start building things on top of the API that opens their eyes to a much bigger opportunity. Or it could simply be that the market loves what they built and they have to spend all their time on scaling and infrastructure and all the things they planned on building go to the back burner.
There are two big takeaways from this for me:
1) Don't get too attached to your strategic plan. If the market is telling you something different, go with it. The best entrepreneurs I know are great at "listening to the market" and quickly taking that input and reshaping the business to take maximum advantage of it.
2) Don't spend too much time on planning. My partner Albert wrote a post this past week about "making versus planning." In that post, he said:
I would spend as little time as possible on the planning and focus instead on turning their prototype into a working system and getting that out into the real world. They will learn more about the viability of what they are working on (and more about business) then any amount of planning could tell them.
But don't take this post as a dismissal of the value of strategy and strategic planning. Strategy is critical. Everything flows from the basic strategic plan of the business. You need to have one, but keep it really simple at the start and be prepared to evolve it quickly once the market starts talking to you. If events start overtaking the company, go with them, it's usually the best approach.
For more from Fred, visit his blog
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