Why most companies lack a coherent strategy?
Early start-ups do ‘what it takes to raise the next round’ driven development. The goal is always to introduce new products / access new user segments to expand TAM that can lead to a valaution pump.
If you ask any early stage startup if they are optimising for any user segment, use case or dimension and thereby choosing one over the other, you will find that the answer is No.
Because every VC wants you to grow into a unicorn. Their math is based on the power law, and there is enough dry powder in the ecosystem to spend to generate revenue and therefore valuation, so why not?
If you don’t promise to grow fast in all directions: new segments, new use cases, new markets, new dimensions, the same money will be allocated to your competitor. Have a look at Masa’s playbook and negotiation tactics with founders.
Okay, let us leave the early startups, what about big companies? In big cos it is ‘promotion driven development’ instead of ‘what it takes to raise next round driven development’ of startups.
The capital allocator = CEO instead of the VC. Capital seeker = product/business heads looking for their next promo/scope expansion. Why will they choose? Who got promoted because they killed a shitty product? Or the decision not to have a focus on a particular segment?
This relentless focus and prioritisation has to come from the top (CEO/ CPO). But there are very few people who are good at it.
(This thread is mostly from a discussion about good strategy - bad strategy with a couple of friends last week.)