When you’re running a startup, especially during tough times, everyone talks about “strategy”—how crucial it is, how confusing it can be, and the problems with a bad one. Having been in these discussions myself multiple times, I wanted to break down some painful lessons I’ve learned.

Painful Lesson #1: A strategy isn’t just a list of goals

Strategy is not about setting goals. Setting goals is important, agreeing on them is crucial. But it’s not a strategy. A strategy is not your goals: it is the blueprint for achieving them. It’s the how, not the what. Your goal might be to release a killer product, to elevate sales figures, or to reduce customer churn. However, there are many possible paths to these destinations. To use a navigation analogy, if your goal is a landmark in the horizon, your strategy is the chosen route and plan to get to it. So yes, set goals and measure your progress towards them, but you need to decide and agree on how you want to get there as well.

Painful Lesson #2: Why even bother?

Why bother with a strategy? Don’t you feel you kind of know what needs to be done? Why can’t we all work towards our goals and see what works the best? The problem with this approach is that it is a waste of time and energy. Divergent ideas and methods lead to conflicts and dilution of focus. It’s like cooking a complex dish without a recipe, where each chef adds their own ingredients, ending up with a dish that’s a confusing mix of flavors and techniques. You have a bunch of talented people, but will end up with a muddy mess.

Consider this: You aim to boost phone sales. Do you create a high-end model for enthusiasts or a budget-friendly option that will sell better, but with lower margins? Well, both could be a good way to increase sales, so do one or the other. But without a coherent strategy, you’ll be doing both at the same time. These approaches will clash, vying for resources and attention. Teams will fight with each other, arguments will ensue, and confusion, frustration and compromise will follow. A well-defined strategy will serve as a guiding light - helping you make all the micro-decisions without constantly questioning the logic behind them. Of course, strategies aren’t set in stone; they should evolve with data and changing landscapes. If your phone isn’t selling, it’s okay to make a different phone.

Painful Lesson #3: What makes a strategy good?

Forget about looking at a strategy and trying to guage if it “will work”. Predicting success reliably is like trying to forecast the weather in a month: nobody really knows. Nonetheless, a promising strategy tends to have some early indicators:

1. Simplicity: Can you explain your strategy in simple terms? Complexity breeds fragility and risk of failure. If it’s hard to understand it’ll be even harder to follow.

2. Robustness: Does your strategy stem from solid data or core beliefs? Without this foundation, wavering is inevitable.

3. Clarity: A good strategy acts like a light switch in a dark room. It brings sharp focus, helping you decide which projects to axe, where to allocate resources, and which features to prioritize or discard. Recognizing past mistakes is a byproduct of a clear strategy, enabling you to avoid them in the future. If your strategy doesn’t help you quickly cut away all the mistakes you’re making, it’s probably not sharp enough.

Painful Lesson #4: The concept of Anti-Strategy

A few years ago I read this excellent post on anti-values. The gist is that anyone can come up with company values that sound great on paper, but the real challenge is what you’re willing to give up to truly live by those values. Example: move fast and break things: go fast, even if it means making costly mistakes.

I find the notion of an “anti-strategy” equally vital. It’s easy to articulate what your plan is, but what are you willing to sacrifice? This might mean prioritizing enterprise clients, even at the expense of losing small and medium businesses. When push comes to shove, will you be willing to let a small customer go, and lose that revenue?

An anti-strategy involves premeditating the tough calls you’ll need to make. Without this foresight, you’re unprepared for sacrifice. And without sacrifice, you’re likely to end up with a tepid, ‘design-by-committee’ approach that seldom succeeds. Just as no decent restaurant tries to serve every cuisine, no successful business can excel at everything. Pick one thing and do it extremely well.

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In conclusion, strategy in business is more than a buzzword or a set of goals. It’s the art of navigating the complex and often unpredictable waters of the market. It demands clarity, simplicity, and robustness. Equally important is understanding what you’re willing to sacrifice—your anti-strategy. It’s hard and often emotional work to articulate it, and often even harder work to act upon it. But without it, you’ll be lost.