business strategy

Startup Strategy: War Games

I love history, and find specifically war history fascinating. We are incredibly fortunate to be living in a time of relative peace, at least in the USA.

Yesterday, while both working and watching “WWII From Space“, a history channel special, my mind drifted to analogies of business.

One of the key turning points of the war was the U.S. effectively taking out the oil supplies, leaving german tanks and aircraft stranded. It wasn’t enough to have these incredible weapons – they were slightly worse than useless. They cost the germans money (resources – time and money that could have been applied elsewhere), so each tank, gun, ship, plane was effectively a mini project at a net loss.

Cash Flow is the life blood of a startup.

This is startup 101, but there are deeper lessons here:

  1. First, as Eric Ries pointed out, failure to create the code required is rarely the cause of death in a startup – more likely is failure to reach meaningful clientele. In war terms, the Germans made real progress in the invasion of the USSR, but failed to reach the critical oil fields in the balkans – and that one problem left them vulnerable.
  2. You need a Britain before you storm Normandy. You need a safe base (cash flow + feedback from clients) from to base your operations. Had Britain fell to the Germans, the US would have had a much more difficult time helping retake the continent. Even a tiny base of clients – a dozen in B2B software like us – can help mount an offensive against a well entrenched competitor.
  3. Tactics shape strategy, and strategy defines use of tactics. If you’re strong on customer passion, tapping into social media and referrals is sound strategy. Some industries (say, life insurance) are a lot less likely to get meaningful traction, at least until someone has something truly worth talking about. The germans started strong at sea (via U-boats), but the americans later overwhelming dominated the sky. Each played to their tactical strengths.
  4. Focus & Timing are critical in choosing what battles to fight. One well entrenched indirect competitor who dominates a certain space is leveraging their awareness into a core space of ours. Frankly, we’re not ready to fight that battle yet head-on, so we are flanking them by attacking from the side, i.e. building awareness over other messaging. Initially, the U.S. more or less ignored Japan, despite a direct attack at Pearl Harbor, choosing to mostly focus the beginning of the war on Europe.
  5. And last, a single massive 10x improvement can end the war – for a while. The A-Bomb capped of the war, effectively, even though the tide had already turned. A single massive disruption, with application and consumers who know about it, can kick your startup into the hockey-stick growth curve every entrepreneur dreams about. If you don’t have enough mind-share and marketing for the disruption to buy you perceived dominance, cross the chasm, with enough of a lead on the competition, you’ll end up as Nikola Tesla (brilliant, but broke) instead of Thomas Edison (possibly a thief, but rich, and a hard worker).

I’m sure there are dozens of other lessons – comment below if you care to throw yours in.

 

Published by

Roger Vaughn

RogerV is the CEO and founder of SwiftCloud, a social business platform for CRM, marketing, accounting and more. He lives in Los Angeles, and wears many hats - including CEO, father, UI/UX dev, coder, staff coffee delivery man, and whatever else it takes to move the needle.

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