WHEN AND WHY A TECH STARTUP NEEDS A BUSINESS STRATEGIST
“As a business strategist with a track record of building technology businesses from start to exit, I’m frequently asked questions about these and a range of related topics. I’ve written these articles because I like to operate At Scale. So when I advise startups 1:1, I often turn that into a blog or LinkedIn post. I work to help answer your questions in the simplest ways possible. These articles are for educational purposes only. If you have any questions you’d like me to answer, please send them to me using my contact form.”
As a business strategist for start-ups, I’ve had the absolute pleasure of watching countless companies pop up and ride the waves of change toward success. However, when it comes to tech start-ups, those waves can feel a lot more like the weather in the Bermuda Triangle.
The fact is 90% of start-ups fail. A huge factor in that failure is an inability to change and weather the shifting landscape successfully. Without a clear path toward expansion and change, it can be nearly impossible to succeed.
That’s where a business strategist comes in.
This key member of every team can be the difference between a failed start-up and an empire. To make the most of them, you need to know precisely when and how to implement them.
Table of Contents
What Is a Business Strategist?
When Does a Tech Start-up Need a Business Strategist?
Business Strategist for Start-ups: Why a Tech Start-up Needs One
Business Strategist vs. Team Lead
Step One: Deciding to Go Global
Step Two: Choosing the Country
Step Three: Implementing the Strategy
What Is a Business Strategist?
A business strategist is a person that helps you drive new opportunities in your business. They can step back, see the bigger picture of your company’s goals, and steer you toward that bright future.
More than an “ideas person,” this person should be able to take charge of a situation and make the changes they propose happen. Studies have shown that a well-thought-out business strategy is a massive factor in a start-up’s success, and a business strategist can help shape that strategy during new ventures.
This role requires a deep understanding of all the moving parts within an organization to orchestrate change. For this reason, many of the most vital business strategists will be found within your existing teams.
A top-tier business strategist for start-ups will be a confident leader, a creative problem solver, and a well-informed decision-maker. Look for this foresight and passion within your workforce, and encourage its growth.
Making the most of a minor team can be challenging when no dedicated figure leads the charge. However, your organization can reach its potential quickly and elegantly with solid leadership.
When Does a Tech Start-up Need a Business Strategist?
The main impetus for a company to bring in a business strategist is adapting to a changing business environment. Whether it’s to increase profits, shore up a competitive advantage, or scale your operations, a business strategist for start-ups should be brought in when it’s time to take your company to the next level.
A business strategist for start-ups can also prove invaluable when a company is in transition or experiencing high levels of uncertainty. A good strategist can move a start-up through a disruptive change, such as a market shift or a change in leadership, to keep the business on track.
However, as great as that sounds, many start-ups aren’t ready for such a heavy focus on change and adaptation. When you are just starting, your company must invest all its time and resources into establishing product-market fit, not shaking things up.
To understand if it’s time for your tech company to add a focus on new opportunities, take a look at where you are in your business lifecycle. Let’s say you’ve recently launched your product to market.
You are getting a healthy stream of prospects and consistently converting them well into paying customers. You should probably keep doing that for a while. Don’t ruin a good thing by distracting your team with other opportunities.
If, on the other hand, you are
not getting the customer traction or growth that you need
hearing a lot of complaints from your employees
seeing a lot of turnovers
seeing your competitors taking, or preparing to take, market share from you
in a market segment with a changing regulatory environment
looking to expand beyond your current market segment
you’ll want to identify a business strategist and engage them in developing and driving the right strategy for your business needs. That person is often already in your organization.
Business Strategist for Start-ups: Why a Tech Start-up Needs One
Every business will go through several strategic inflection points during its lifecycle. These moments make or break a company, especially one just starting.
While the forms these inflection points take are as diverse as the companies experiencing them, they can broadly be grouped into three categories; corrective, defensive, and expansion. Each type has its warning signs and requires a different approach.
Corrective Inflections
A corrective inflection point occurs when a part of your organization, likely involving two or more functions, isn’t operating well. The underlying problem can occur from a specific issue, an organizational misalignment, or other larger forces influencing your company.
The challenge of a corrective inflection point is that you and your teams are usually too close to the problem to see an obvious solution. Disciplinary actions often require improvement on your current tools, systems, and processes. From HR systems to marketing automation to customer service solutions, these services suddenly need to be rolled out quickly and efficiently. During these moments, a business strategist for start-ups can help align teams on a course of action.
Defensive Inflections
Defensive inflections involve a threat that your organization has identified. A business strategist for start-ups will be tasked with defending against it. This could be a competitor that’s looking to tap into your market or the emergence of a new technology that could relegate your current offering to obsolescence.
In these cases, you need someone to identify a threat’s potential impact and recommend the direction of action that needs to be taken. This could be anything from developing an ROI on different strategies to creating a thorough plan for pivoting your tech start-up to an adjacent market.
A business strategist should be able to source industry experts and build a clear and detailed approach to ensure that your tech start-up is set up to survive the threat coming your way.
Expansion Inflections
Eventually, every business will get to the point where they need a new growth vector. These inflection points require an understanding of the opportunities available to pursue and the ability to develop a concrete plan to get there.
For a tech start-up, this could mean several things. Maybe you want to grow your product suite, enter new markets, or move into new segments.
That requires both strategic planning and tactical considerations. A business strategist can provide a birds-eye view of your objectives and the steps you need to take to achieve them. They can also act as a sounding board when it comes to decisions.
Business Strategist vs. Team Lead
It’s easy to get caught comparing a business strategist to any other leader within your company, especially during these inflection points when everyone is working towards a change. However, the ability to incorporate change across the entire organization truly sets this role apart.
Let’s take a typical example of an expansion inflection point that many tech start-ups face as they grow their business. Having successfully sold its product in one country, a start-up starts looking at expanding to other geographies.
Perhaps this new opportunity is identified by Jeremy, the head of sales, as a way to meet aggressive revenue goals. Jeremy talks to Janet, the CEO, and they decide to pursue this opportunity together.
Now, hopefully, Jeremy is a business strategist and head of sales. This distinction can make a huge difference in how smooth the transition happens. Let’s examine the core differences between how “Jeremy, the Head of Sales” and “Jeremy, the Business Strategist,” handle the situation.
Step One: Deciding to Go Global
Before significant changes happen, the decision must be made to expand globally. Is this the best option, or should the company focus on new revenue streams within its current country?
Business Strategist Jeremy
Because his true goal is maximizing the company’s value, Business Strategist Jeremy will evaluate all options available to drive more successful growth. He takes the time to explore whether there are other paths to meeting aggressive revenue goals so that they can be evaluated against entering another country.
Jeremy will evaluate the product, the market, and the team to develop different options to improve sales. Then he will look at data to drive his final decision.
Head of Sales Jeremy
Without the overarching foresight of a business strategist, the Head of Sales, Jeremy will only see the potential value in expansion for his specific team. There’s no value for him to explore alternative growth vectors, so he moves forward with the initial plan.
Step Two: Choosing the Country
Having decided to expand, the next step is to choose a country. All countries offer unique advantages, different cultures, and varying risks. Depending on their focus, both Jeremys will have a different approach to this decision.
Business Strategist Jeremy
For Business Strategist Jeremy, choosing a country is no easy feat. He will compare metrics and risk factors associated with each country and take the time to understand their impact on the company.
With such a significant decision, Jeremy will likely organize a cross-functional team of leaders and experts within the company to help assess the situation. This ensures that whatever choice is made benefits every department and considers their needs.
Head of Sales, Jeremy
Head of Sales Jeremy’s focus is limited to what can help his team reach their goals. He will take into consideration the resources they have available and which countries have the potential to deliver a return in a short time frame.
Because of this, he’s far more likely to push ahead with hiring salespeople in the country of his choice before a full assessment has been made.
Step Three: Implementing the Strategy
Depending on the Jeremy in charge, the implementation of the strategy will look very different. This is due to the care and understanding shown to the company vs. the department he is heading up.
Business Strategist Jeremy
With a business strategist mindset, Jeremy takes the time to create a summary of the impact of geographic expansion across the company. This includes
possible product translation
global support
local employment compliance
country-specific privacy and other regulatory requirements
local leadership and Culture Considerations
He can then use this summary to ensure the organization implements the strategy well.
Head of Sales Jeremy
Much of Head of Sales Jeremy’s time will be spent creating “fire drills” to deal with the fact that the other departments are behind him in implementing the strategy. The train has left the station, and the remaining company has to find ways to catch up.
Step Four: Score Carding
The job isn’t done when a goal has been accomplished. The most crucial step in the change process is looking at what worked and what could be improved next time.
Business Strategist Jeremy
As the teams settle into the new normal, Business Strategist Jeremy takes time to collect and report on various metrics regularly. This helps him to assess the final product against the original goal of driving higher growth from geographic expansion.
Head of Sales Jeremy
For Head of Sales Jeremy, there is no difference between this initiative and operations. He’ll report on the new geographic revenue like any other income, but there will be no comparison with any original goals.
To Change or Not to Change
Change is a strain on any start-up, and too much change is a bad thing. It’s crucial to balance running the business with changing the industry.
Like most things in life, you can apply the 80/20 rule to how many resources you might invest in running your business (80%) versus changing your business (20%). The 80/20 rule is always a rule of thumb.
Like I said at the start, if you’re happily growing and selling your existing products to your customers, don’t ruin a good thing! With the fast pace of changes in the tech world, though, tech start-ups, in particular, must be vigilant about keeping up with the changing needs of their customers and the new opportunities that new technology brings.
This is why for most start-ups ready to scale operations, changing the business should be around 20% of the overall efforts of the start-up.
Sounds simple enough. But it never is.
As a start-up scales, more and more pressure is put on its teams to meet internal and external scaling demands. It starts to have a waterfall effect.
With more features come more bugs to fix
With more systems come more workflows to fix and integrations to support
With more customers come more customer requests and more support tickets
With more employees come more policies and more employee relations issues
With more revenue comes more accounting
With more scale comes more tech and operational debt to fix.
This is all about running the business – sometimes called “keeping the lights on” – although I don’t like that expression because it grossly undervalues the work that has to be done to scale existing business operations.
Teams are often so busy running the business that when a new opportunity is identified, no resources are available to help implement the option to change the industry. Expecting a couple of people with strategy titles to drive new business opportunities for your company successfully is like hiring one person to remodel a house.
That’s why it’s crucial to find business strategists across your company and ensure they understand the resources available for expansion efforts.
Essential Skills of a Business Strategist
With all of this in mind, there are a few skills that every strategy-oriented leader should possess.
They help their teams allocate roughly 20% of their time supporting new opportunities, leaving 80% of their time running the business.
They ensure that 20% of resources are focused on supporting the same set of opportunities, rather than each team implementing their separate opportunities that help change the business.
They understand that 80% of the company’s resources (in most cases) are needed to run the business, which means they limit change, prioritize just a few new strategic opportunities at a time, and wait to complete or abandon one strategic option before adding a new one for the business to implement.
They align to identify goals for every new opportunity they undertake and ways to measure progress against those goals, and they report on achievement against those goals regularly.
You must watch for these traits as you identify and train business strategists within your organization or contract with outside business strategists. Only with an understanding of all four will they be able to steer your company toward its true potential.
In Conclusion
Change is both crucial and inevitable, especially for a start-up in the tech sphere. However, change can lead to more harm than good without a firm hand guiding it.
Finding the right individuals to step up and fulfill your company’s business strategist role can make all the difference in your success. They take the time to examine the bigger picture and patiently and holistically include the entire company in shifts.
If your team is ready to scale and change, do yourself a huge favor and bring business strategists into the picture. Your entire team will thank you as they sail into the future together.