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Does strategy matter before product-market fit?
How the strategy game changes pre- and post- product market fit (PMF).
Some people say that product strategy doesn't matter before a startup finds product market fit (PMF). That until a company finds PMF, all the work around strategy is premature.
I disagree. I believe strategy is essential in a startup, but has a very different shape.
After two long dinners this week talking shop with other product leaders, here’s what I think is going on: the shape of strategy is different at different stages of a company (0-1, 1-10, 10-1000+).
I haven't found the right analogy yet, but here's the best one I've got today: it's like hiking through a densely wooded mountain range, trying to find a pass through the mountains to open space beyond it.
This is like climbing a steep trail in the mountains. You occasionally get a clear view of a pass (gap in the market) through the wall of mountains (other market players). You are really hoping this trail you're busting your butt to climb is in fact going to lead you to and through that pass in the mountains to the wide open space beyond it (future market).
You're climbing a trail, you can't see much, but occasionally you get a clear view that you're moving closer to the pass. You make the pass when you achieve PMF.
Your strategic problem here is directional clarity and making it to the mountain pass. You have to channel all your resources into making it through the pass, or your company dies on the way and never breaks through into open market space. You must get and stay clear with your cofounders on all parts of your leadership stack.
This is when the game changes dramatically and suddenly. You've achieved PMF. You're no longer climbing a boxed in, steep trail—you've popped out the other side of the mountain pass and find yourself somewhere unexpected: a high plateau.
Now, instead of only being able to occasionally see a gap in the wall off in the distance, you have a wide open space and a whole horizon in front of you. In the distance are more mountains, with different paths leading to them.
You have a different problem here: too much choice. You now have an entire horizon to choose from, with many roads leading to different appealing mountains off in the distance.
The antidote is true focus. This period is where companies are easily tempted to spread themselves thin on the heels of the success they’ve found so far.
Big companies—and I am including startups that have scaled to late stage or gone public here—have a much bigger version of the choice/focus problem that scale-ups have, along with much more company complexity.
Most strategy frameworks, books, etc are aimed at this stage (Richard Rumelt, Playing to Win, Gib Biddle, etc). Even so, product strategy is a crucial topic that remains under-served, and I’m planning to write more on it.