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The Biggest Startup Strategy Myth (and How to Deal With It)
Your company will never grow bigger than the initial strategy behind it
“We have a strategic plan. It’s called doing things.”
— Herb Kelleher (co-founder of Southwest Airlines)
In my early years, that quote hung in our office and it was reflected in my leadership. I remember an employee telling me that he wanted to work “more strategically,” and I had no idea what he meant. In my mind, our company’s strategy was clear and only execution could make all the difference. My company nearly failed because of that lack of insight.
Nowadays I couldn’t disagree more with the quote, and I think it’s misleading for startup founders. It’s naive to think that strategy is a discipline only used by big companies and devised by overpaid consultants.
The strategy is the limit
Today I think about it this way: Strategy determines the magnitude of any endeavor and execution determines the degree of achievement.
Success = Strategy (1–∞) x Execution (0–1).
Strategy is a number between 1 and infinity and execution is a number between 0 and 1. That means no matter how well you operate, your execution will never outgrow your strategy potential.
Opening bakeries
Let’s say your neighbor opens a bakery to sell German bread in the Bay area. We give him a 5 on the strategy variable. He executes well (0.8) and gets an overall score of 4.
Because you like bread and have read Blitzscaling by Reid Hoffman, you feel inspired and decide to start a nationwide German bakery franchise. I give you a strategy score of 500 because the venture has much more potential (let’s say 100x). But this also makes the execution much harder and you end up getting an execution score of 0.6. So, you end up with an overall score of 300.
What’s clear from this example is that the strategy determines the limit of what you can get. No matter how good your execution is, your venture won’t grow bigger than the initial strategy behind it.
