Welcome to the quick course strategy. I'm glad you're here because it means you're serious about what it takes to start a real new business. And that you want to know more about how to begin creating great new businesses. It also means you're in a hurry. So in this course, I'm going to quickly help you figure out how to create a strategy that outwits your competition. Let's get going.
We'll cover what's meant by strategy and what makes it special for a startup. We'll look at the winning types and lose and when and compare the two, and then we'll apply it to your work. It's part of a process that begins with this idea. By now you should have moved through your need and opportunity and seeing the problem you're solving. You'll also need a category of market that's focused on this particular segment. You should understand who your ideal customer is.
How to focus and position against competition. After that, it's all about strategy that gets you into a brand develops the slogan and a visual hammer that helps you win. When you think about competition, what are some words that come to your mind right away? Think about a few. These are some that are common responses, us versus them, big or small, winning or losing. It's about people, organizations and teams and groups.
Sports often referred to as competitive as well as personal competition. sharp focus, searching out weaknesses compared your strengths. Run away, defend attack. When you think about strategy, what are some words that come to mind? Here are common responses out there, we're going to fight a battle. Often a lot of vagueness is involved in something that's quite complex with many pieces.
There's a sense of leadership as well as following organizations and teams are thought about as having strategy. There's a plan. People often refer to a roadmap for the strategy involves movement do this, then that then this then that, and time this week, this month this year next year. It's often referred to as part of a plan of attack and master plan. strategy. This is a useful definition for startups.
Think of it as a clever bag of sneaky things you're going to use to surprise competitor. Those clever tricks will be used as a way to outmaneuver your competition. moving them. maneuver is the French word for move. Focus on movement, action, reaction and reaction. Who's out moving whom?
Begging the question, Who is the competition? And how will they move when you enter the marketplace to compete? These are elements of strategy. It's planned. It involves action. There are resources, mostly of people that do this using that resource.
There's a sense of where you're going to be fighting these battles, where you're going to go to and where you are likely to be. There's a sense of time, surprise, launch dates, Windows opening and closing are part of strategy. There's a backup plan, hey, hey, when all else fails, then we're going to do this. And it's very deliberate. It's also realistic. We might get killed or not.
Therefore, we need a back up plan. The four basic types of strategy best outlined for startups, common marketing warfare, the classic by recent trout, all the great marketing minds know these defender offensive, flanking and guerrilla. They come from a Prussian General, who was the father of modern strategy, Carl von Clausewitz. His book on war was aimed out with the enemy, so you didn't have to suffer Carnage, meaning Use your brains and you'll avoid blood and guts. Turns out this works well in the business world. The overriding principle is concentration of force, the most firepower on the smallest target wins.
Tiny laser will burn through thick steel walls so also focus will succeed for startups. It is scary because it means you have to drop everything else make a commitment to doing one single thing well, therefore do your homework before launching your charge. That's what intelligence market research is all about. Let's look at the principles for each of these four types of strategies. The defensive strategy begins with understanding that only the market leader should consider playing defense. The best defensive strategy is the courage to attack yourself, and any strong move by a competitor should always be blocked.
The offensive strategy focuses on the strength of the leaders position. That's the main consideration. The offensive company must find a weakness in the leader strength and attack at that point. And then launch the attack on as narrow a front as possible concentration of force. flanking is different. A good flanking move must be made into an uncontested area.
No one else is there that dominates yet. The tactical surprise ought to be an important element of the plan. That's where we get the term stealth startup. The Pursuit is as critical as the attack itself. Once you've launched, you have to aggressively pursue your strategy. The guerrilla strategy is designed more for smaller businesses.
They must find a segment of the market small enough to defend even if a big company comes after them. And no matter how successful you become, never act like the leader and finally be prepared to bug out at a moment's notice. To apply the strategic thinking start with who is the market leader doesn't have to be another startup it can simply be the status quo of how the old technology is being used. Second, what are the weaknesses of that leader? Is there a single great weakness that we could attack? What market segment has been overlooked could be flanking to that?
And which market segment can we defend? If we have to? An example of a defender involves Microsoft and real audio in the early internet days, real audio was taken an offensive attack on a weakness in Windows which lacked the audio capability. The Microsoft response was we're going to do it to accept it. Our new format will not be compatible with yours. Too bad.
Goodbye. Real Audio. With Google dominating search an example of the offensive strategy has been used by Microsoft as they did a meet to bringing out Bing. That problem is what is the weakness to attack in Google? What does a better search product mean? Not much being remains an afterthought.
Flanking strategies can be applied in the following examples. First, in the early days of spreadsheets visicalc Corporation was able to create visicalc the first spreadsheet that learned to dominate Apple to product with a personal computer market just coming on following Apple it lacked a spreadsheet, Lotus launch 123 and dominated along comes the Macintosh computer. Microsoft still without a spreadsheet, sees that there's an opportunity to do something as strong as 123. But with the Macintosh, they created Excel and then moved into the PC World. flanking and personal computers in the early days Apple was the pioneer that would not license its operating system to anyone else. Microsoft, however did people like IBM, the gorilla of computing at the time, and as we know, the PC blossom and over eclipsed Apple dominating operating systems worldwide.
Another example is with personal computers on the scene. Compaq created a luggable about the size of a briefcase three times larger nicknamed The luggable pc for people that needed to move from point to point. They also sold through the brand new retail dealers flanking wins. Dell decided to focus on selling directly to consumers and businesses, beginning with the student friends of Michael Dell. Another flanking strategy. A guerrilla strategy that wins is evident and Ray Adobe's fanaticism about being the audio king of the world, recording the finest sound beginning in 1965.
In Great Britain with analog world, technology tubes and real tape, he did retain for decades, the ability to generate the finest recorded sound. It took him 30 years to get to his first consumer product and 40 years to get to initial public offering With a gorilla moving to Fender we have a pretty good history and select Tron. outsource computer manufacturing was virtually unknown in the early days. As a bold pioneer, the founder said let's get started with a beachhead by focusing on fast turnaround the prototypes, beta builds and small unit runs, emphasizing top quality and on time delivery of passion for the founder with a physics and math background. He was able to pass on lower component costs to small unit runs by buying in bulk purchases for use by many others. wave number two was the arrival of the new generation of circuit boards and semiconductor technology.
He set out to set the industry standard for the company getting into larger volume runs. first major accomplishment was to win the brand new Baldrige quality award to the customers he could then tout that we're the quality experts of the new generation of circuit boards and semiconductor technologies. Becoming the market leader that is the industry standard enabled him to then appropriately use the defender strategy. Wave three attracted many direct competitors. By now worldwide people realize this could become a gigantic business. They raised the bar it's electron example of the market leader defending they added statistical process control installed sophisticated expensive equipment to do it.
They involve complex real time EMI systems and one the second Baldrige Quality Award in 2007, they were acquired by flex and it become a dominant factor in the world. The danger is attacking the defender as ever And ride sharing. Uber was founded in 2009 as Uber cab. And it wasn't until three years later that Lyft began to say, hey, let's attack directly. They have established themselves as ride sharing for longer trips starting with college kids going across country. As you know now zimride the became Lyft is certainly far far behind Uber and market share.
It's very hard to win attacking the defender. What weakness would you attack Uber on? The primary lessons are that you should start by asking as you develop your strategy, where are we on the industry maturity curve, you don't want to be too soon or too late. Is that in the chaos phase or is there someone at the top already that's gone IPO Are we just starting to develop bowling pin lineup. Have we knocked a few over is their industry launching Are we in the tornado yet? Where we shifted from selling to taking orders?
It's so popular. Don't be too soon. Don't be too late. Who is that market leader? Who is the gorilla that dominates at the top? If there is someone there already don't go there.
You want to find a place that's on contested the opportunity which enables you to flank into it and compete to become the leader. Third, what is your new market category? This is always a bit tricky for first timers. by category we mean something like search which means Google social networking, which means Facebook ride sharing which means Uber and so on. You want to own the new market segment, that is your company name or product name is the same as that category name in the mind of your ideal customer. Finally, how are you positioned in New Market.
Positioning is well known to marketing people because it's a psychological place in the mind of the customer that fits between competitors. It's firm, secure, stable, lasting, and very strongly embedded. That customer will recall the words that lead to branding as search recalled means Google. What message do you want to put in that mind to the consumer? What words would go there? What marketing communications Do you want to send there?
It has to be unique, and you're not knocking a competitor out of the way. You're entering uncontested territory. flanking turns out to be the most successful startup strategy and it's highly recommended. Apply it to your work by picking one of the four types of strategies and then roleplay with your team members. Attacking, defending flanking being a gorilla. Learn and modify appropriately until you finally can declare your strategy and the business plan that you're confident of keep it simple and keep it focused.
Primary lessons, where are we on the industry maturity curve? Who's the market leader? Is there a new market category we can enter that's not contested, and how would we position in that category in this new market in the mind of our ideal customer? Remember, strategy is about out moving your competitors tricky things you do as you move in the marketplace. Focus means concentration of force, startup serial entrepreneurs know the power it produces. And finally, flanking into a new category is the real opportunity you want to look for.
It's part of an important person Assess, when you are able to follow this sequence and pull this together, it will lead you to a branding and power of that brand that will dominate a new market category. You get there with a clever strategy. Well, you know now what is meant by a strategy and what a special one could be for a startup. You've seen examples of winning and losing strategy. So now it's just up to you to apply it to your work. As a result, the only thing you have to do is get going.
I'm heading off to start one now. I've got other coursework for you there. I hope to see you there. Bye for now.