Modern business is usually pretty lean. Investment capital is scarce, costs need to come down all the time and the budget for innovation is minimal.
In this environment, how do you decide what to do – where to put your money and how to develop an opportunity?
A misspelling of the word strategy as startegy may provide an insight.
STARTegy as a word does not appear to be widely used, so it might be helpful to appropriate it to describe what we need to do when we get started on a new opportunity.
Most business opportunities, whether inside organisations or as a new start-up can be seen as projects. The objective of the project is to figure out a new source of revenue.
Most people are familiar with the Business Model canvas, proposed by Alexander Osterwalder. This is now almost a standard model to use when thinking through what your business is going to do and consists of 9 areas:
- Value proposition: In essence – what are you going to do or offer?
- Customer segments: What is your market segment and the kinds of customers you are going after?
- Key partners: Who are the people who can help you get to those customers?
- Customer relationships: Who, precisely, are you going to approach?
- Channels: How, precisely, are you going to get to talk to them?
- Key activities: What do you need to do in your business?
- Key resources: What things do you need – money, people, technology?
- Cost structure: What is it going to cost to deliver your product?
- Revenue streams: How are you going to make money?
This is a good start and helps you check that you have covered all the basic points needed for an internal or external project, especially if you need investment.
But, to put a STARTegy in place, you need more than just a business model.
A business model is a nice, neat, boxy thing that gives you an impression of precision and rationality.
But, the real world is messy and unpredictable.
The way in which we make sense of the real world is through story – through a narrative that helps us make sense of what we see in the world.
So, the next part of the STARTegy model is the story – the beginning, the middle and the end of a coherent narrative that helps people see what you see.
The story you tell will be told, retold, changed, bits taken away, bits added – and over time you will come up with one that is a good one.
But that still isn’t enough.
The capstone of the STARTegy model is making sure that what you have provides sustainable competitive advantage.
There is no point having a great idea for a business if an existing player can simply come along and do what you do pretty quickly and wipe out your market share.
You can avoid this by asking yourself four questions.
- Does what you do have value? Do you have something here that really makes a difference – increases revenue, cuts costs, saves time or saves effort?
- Is what you do rare? Is it hard to find an alternative to the product or service you provide?
- Is what you do inimitable? Is it difficult to copy or recreate what you do?
- Do you have an organisation? Do you have, or can you put in place, an organisational structure that can deliver your product or service?
If your answer to these four questions is yes, then you improve your chances of having something can compete and grow or take market share.
In conclusion, the STARTegy model suggests that you need three things to make an internal or external project successful:
- Have a clear business model.
- Tell a good story.
- Make sure you have a source of sustainable competitive advantage.