Business Growth Strategies For Entrepreneurs – Summary. In their rush to get to market first, write Joshua Gans, Erin L. Scott, and Scott Stern, entrepreneurs often go with the first possible strategy they identify. They can improve their chances of choosing the right path by researching four common go-to-market strategies and choosing the version that most closely aligns with their core values and motivations. The authors provide a framework, which they call the Compass of International Strategy, for doing this. Not About Frameworks Syracuse University professor Carl Schramm argues that contrary to what many business schools teach, entrepreneurs really have no substitute for learning by doing. “Make Something and Start Selling It” a conversation with startup veterans Neeraj Shah, Bajan Sabat and Jennifer Lim, by Daniel McGinn and Walter Frick, the complete spotlight package has been reprinted.
In a rush to go to market, entrepreneurs often go with the first possible strategy they identify. As a result, they end up being second or even third movers with superior strategies.
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In the innovation space it’s easy to get overwhelmed by the apparent range of opportunities. Traders fear that spending too much time weighing alternatives will delay commercialization. These strategic commitments limit the ability of the Axis to move forward.
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New businesses improve their chances of choosing the right path by researching four common go-to-market strategies, exploring the many possible versions of these strategies, and choosing one that aligns most closely with their founder’s values and motivations. can do
Initially, RapidSOS was an easy sell: It would bring 911 calls into the smartphone age. Emergency response systems were developed in the pre-mobile era, which meant that few of them could accurately identify the location of callers who were using mobile phones, compromising response times, response and medical attention. results. The founders of RapidSOS—Michael Martin, an HBS graduate, and Nick Horelik, an MIT engineer—had devised a way to transfer cell phone locations to existing 911 systems with minimal input from other actors in emergency services. Less adaptation will be required. . sector After attracting early-stage funding from competing business ventures, Martin and Horlick hit a crossroads: How should they bring their technology to market?
The answer was not simple – in fact, they identified four possible paths. They can be very ambitious and seek to completely replace the emergency response system – creating an “Uber for ambulances”. They may try a classic disruption strategy – initially targeting underserved populations, such as people with willpower, with the intention of eventually expanding to a wider range of customers. They can avoid direct competition altogether, either by helping to modernize their operations—perhaps by working with a 911 equipment supplier like Motorola—or by partnering with insurance companies, which ultimately cover the cost of ambulance service. They cover
Many entrepreneurs, working in a fog of uncertainty, worry that the discovery will be delayed from commercialization. So, they go with the first practical strategy that comes to mind, mocking the thought and planning that accompanies careful strategy. As Richard Branson famously emphasized, “Eventually [you have to say], ‘Screw it, just do it’ and go ahead and try.”
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There are times when this method works, of course. But generally such ad hoc experiments should be avoided, even if they require some resources. Entrepreneurs who commit to the first promising path find their startups vulnerable to competitors who take a less obvious but ultimately more powerful path to marketing and customers. Shia Agassi, for example, has spent nearly $1 billion building an ecosystem to support BetterPlace, his “swappable battery” approach to the electric car business. Elon Musk’s more deliberate and gradual approach to developing an integrated and highly reliable Tesla proved to be a smart strategy.
And that’s not the only problem with an action-first philosophy. Founders are more confident and more persuasive to investors, employees, and partners when they can demonstrate the potential of an idea across multiple strategies, and validate the underlying assumptions and strengths of the idea itself.
Is there a way to think through your strategic choices without slowing down the process too much? After working with and studying hundreds of startups over the past 20 years, we’ve developed a framework we call the Entrepreneurial Strategic Compass that allows company founders to approach these critical choices. What they face is practical and to clarify. She outlines four common go-to-market strategies to consider as they move from the idea to the launch stage, each offering a distinct path for a project to create and capture value.
At the heart of our approach is the recognition that the go-to-market strategy for any innovation involves making choices about which customers to target, which technologies to implement, which organizational identity to assume, and company How to position against which. . To complicate matters, the decisions are interdependent—the customer’s choice affects the company’s organizational identity and its choice of technology.
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For resource corporations, all four decisions involve analyzing data they may already have. They often engage in market research and experimentation on various fronts. And they can build on previous experience. Starting on a string, in contrast, does not have the history and knowledge that it brings. However, this can actually be an advantage, as past experience, historical data and commitments driving current operations can create blind spots for established corporations, possibly causing them to ignore innovations that exist. Create a threat. However, startups may face competition when incumbents wake up to new innovations, and they will certainly face pressure from other startups that are trying to beat them in the market.
Entrepreneurs can be overwhelmed by the multitude of options they face, even though some paths may be ruled out as impractical, and some will not come together in the same way. However, our research suggests that four boss categories govern the process, leading young firms to immediately viable market entry strategies and uncovering the assumptions that inform choices. give
Working with established players provides access to resources and supply chains that can enable startups to enter established markets faster and better. Again, due to the bureaucratic nature of large organizations the project may face significant delays and may even capture a small portion of a potentially large pie. (The incumbent may have greater bargaining power in the relationship—especially if he can accommodate key elements of the initial idea.)
Alternatives, too, have advantages and disadvantages. Competing with established players in an industry means that a startup has more freedom to build the value chain it envisions, work with customers that incumbents may have overlooked, and innovate in the market. Brings that add value to the customer while changing otherwise. Successful products. . However, this means taking on competitors who have more financial resources and an established business infrastructure.
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Some companies believe that they have more to gain from maintaining tight control over a product or technology and that imitation hurts them. So they invest in intellectual property protection. Formal IP protection, although expensive, may allow technology-driven startups to exclude others from direct competition or to exercise significant bargaining power in negotiations with a supply chain partner. But prioritizing control increases transaction costs and the challenge of bringing innovation to market and working with customers and partners.
In contrast, the focus on market acquisition accelerates commercialization and development, which usually occurs in close cooperation with partners and customers. Startups who choose to follow this path prefer the ability to prioritize and pitch their ideas directly to the market. While a strategy built on control may delay entry, new businesses focus on getting ahead of the anticipated competition in the market and use their agility to respond when competitive threats arise. They move fast and break things.
Reducing these two questions greatly simplifies the process of strategic reflection. Rather than trying to identify an á la carte combination of the “right” options for a particular idea, a founding team can consider the potential for value creation and value capture from the various options that each of the four strategies provide. can be made in
In this compass quadrant, the company cooperates with the incumbent and maintains control of its product or technology. The startup focuses on idea generation and development and avoids the costs of customer-facing downstream activities. The primary consideration should be value for customers of established operators; Therefore, development choices about which historical partners are the most suitable partners for this project.
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In addition, because cooperation needs to be aligned with the activities of established operators, startups will choose common technology investments compatible with existing systems. Finally, the identity of the startup—as a kind of idea factory—will be reflected in its development that can be brought to market through newly selected entities. But you will see that you are developing a small number of modular technologies that can make a decisive difference to the industry and you will not engage in unstructured experimentation with every possible new technology.
Sound company Dolby provides a classic example. Anyone in the market for a stereo system or watching a movie in the theater is guaranteed to come across the name Dolby. dolby