Navigating the Unknown: Strategy Creation for Pre-Market-Fit Startups
An interview with David Pereira, early stage product specialist, about the role of strategy in early stage startups
The role of strategy in pre-market-fit startups can sometimes be unclear. How would we focus or double down on a path with so much uncertainty and risk? We would likely pivot many times before finding what we need to double down on, and doing a deep strategic exercise is a waste of time.
But when we neglect strategy, the consequences can be worse. Not having clarity on what we are trying to achieve and testing random things has crashed many startups.
Luckily, there is a middle ground. In this episode, I spoke with David Pereira, an experienced product leader and strategist, who told us (with very detailed examples!) how to create strategies that help startups find Product-Market Fit and connect them to an iterative execution that drives success.
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My takeaways from this episode
David shared first how the vision they were aiming for (disrupting the second-hand market in Brazil) was clear, and the problem they were trying to solve was significant for their niche since many users were coming to their app. But there was no engagement or retention, and they needed a strategy to get there.
The situation was difficult because he had to create a strategy for a space he didn’t know anything about and with very limited time (literally a few months before the company ran out of money).
The first step they took was narrowing the target market. That helped them find and select an existing and unresolved problem that (if they could solve it) will bring differentiation to their product.
They defined a clear success metric, asking themselves, “What would solving this problem look like”? The strategy combined this significant challenge and a north star metric (accepted offers) that helped track success.
The strategy doesn’t need to be over-bureaucratized. This small startup was about solving this complex problem: documenting it with a few bullet points and key results were sufficient. Similarly, for the strategy check-in, using the sprint review as a 2-week check-in is OK and connected to the speed of iteration and learning of a small startup.
When executing strategy, the first step is learning that what you are betting on is correct. David took a pragmatic approach to “guarantee” good deals to car dealers, which was costly but proved that they were on the right track. They later optimized it as part of the strategy execution, but only once it was validated.
We explored how the strategy definition changes for more mature products. David recommended doing zoom-ins to identify concrete insights for a particular segment of users or parts of the product that are underperforming.
Also, in terms of execution, larger companies tend to put teams into fixed “areas of responsibility.” Teams can adopt a local-optimization mindset, working on something not meaningful for the strategy just because they are not given the opportunity.
Don’t miss our next episodes with the founder of Delibr, discussing strategy for product management products!