A Smart Bear

What is a strategy? A fractal answer.

by Jason Cohen, January 26, 2023
This page is an unfinished fragment of an idea, made public for feedback and contemplation.

I. #

Strategy is: How we will win.

II. #


  1. assesses the current situation,
  2. identifies the opportunities that are right for us, then
  3. determines our primary courses of action and guiding principles

…so that we win.

III. #


  1. assesses the current situation
    1. externally and
    2. internally,
    3. uncovering difficult truths, no matter how brutal, then
  2. identifies
    1. the latent opportunities in market segment,
    2. our assets and capabilities that give us leverage, and
    3. moats that create durable competitive advantage, which together
  3. determines
    1. the subset of opportunities in which we can leverage our strengths, building one or more moats, in a manner consistent with our values, which
    2. is articulated in our primary courses of action,
    3. and our guiding principles: a self-consistent set of decisions, including second-order effects, both positive and negative, that aligns everyone in the organization

…so that we win.

VI. #


  1. assesses
    1. externally
      1. global secular trends
        1. (Just examples; only include trends that are relevant to your company)
        2. The consumerization of Enterprise
        3. The shift to eCommerce
        4. The shift to delivery services
        5. The effect of aging populations in wealthy nations
        6. The increase in distributed workforces and the Great Resignation
        7. The increasing role of AI as a part of all software
      2. economic conditions
      3. industry conditions
        1. How big is the wider industry? How much money being spent by customers (revenue)? How profitable (dollars and percentages)?
        2. How changing? Growing, stable, shrinking? In N vs revenue? How rapidly?
        3. How quickly are new companies entering the market? Are they established companies moving into adjacencies, or startups with fresh ideas?
        4. How quickly are companies exiting the industry? Being rolled-up, or going out of business?
        5. Is VC funding increasing, the same, or decreasing?
      4. directly addressable market (or, possible addressable markets, for pre-scale companies still trying to decide)
        1. the main market segments
        2. Is this market tracking the wider industry or moving in a different direction?
        3. (plus, same questions as industry trends)
        4. (could analyze different markets within the industry)
      5. market segmentation
      6. competitive intelligence
        1. Who are the major competitors?
        2. Based on their marketing (home page positioning, prices, “about us,” FAQs, advertising), what niches are they targeting? Who is their “ideal customer?”
        3. Based on their product’s evolution over the past twelve months, what personas are they targeting? What pain points are they solving for? How fast are they moving?
        4. What is their primary success metric, that they will maximize even if other metrics go the wrong direction? (e.g. MAUs, market-share, community-size, marketplace volume, ARR, profit)
        5. What moats are they are trying to construct? In which subset are they being successful?
        6. Where do they make money/profit, vs where do they employ loss-leaders1?
        7. What is their Talk/Walk matrix, and what movements within that framework do you think they’re attempting to make?
        8. (anything from Competitive Strategy by Michael Porter. Five-Forces analysis is the most famous, and is useful, but that’s only Chapter 1 of a book full of techniques for developing competitive intelligence)
      7. alternatives
        1. How do potential customers in our market solve their problem, when they don’t pick either us or our direct competitors2?
        2. Why do customers make that choice? What are the key factors that result in choosing an alternative instead of even a competitor of ours?
        3. How is this changing over time?
        4. (plus, questions from “competitive intelligence”)
    2. internally
      1. strengths
      2. weaknesses
      3. customer behavior and feedback
        1. What consistent feedback do we hear in exit-interviews from cancellations?
        2. What are the top five topics we see in tech support?
        3. What positive and negative things do people say, both those rating us NPS-0 and NPS-10?
        4. What are past and present customers saying about us on social media?
        5. What do customers consistently tell us during one-on-one interviews?
        6. What information have we gleaned from recent customer surveys?
        7. What behavioral data do we have from product usage?
      4. aspirational goals
        1. What is the overall financial goal for the company? (e.g. stay as small and profitable as possible vs grow as fast as possible; stay independent forever vs IPO someday vs sell someday)
        2. What primary financial metrics are required for the goal? (e.g. top-line growth, GPM, NRR, EBITDA, R40, FCF, LTV)
        3. What few metrics around the product or customers best indicate that the company is being successful?
        4. What internal efficiency metrics allow us to monitor unit-profitability?
      5. values we uphold for ourselves
        1. cultural values, guiding our behavior, which we will not violate even if doing so would make a lot more money, because otherwise we would lose our entire identity.
        2. operational principles, which might be as inviolable as values, that guide how we do work. Examples:
          1. Do we always do the highest quality work (even though this takes more time and money and our product has fewer features), or do we get it 80% done and shipped (because MVPs are how you iterate fast and learn fast)?
          2. Do we care about having impeccable graphic design (because people love it and we’re proud of our work) or about simple functionality (because being easy to understand and portable to any device, language, and integration is vital)?
          3. Do we try to do just 1-2 things at a time (because reducing work-in-progress reduces context-switching and ships fewer things, better and faster) or do we run lots of experiments (because you can’t predict which things are worth spending lots of time on)?
      6. societal responsibility
        1. How (if at all) does the company need to give back to the communities employees are in?
        2. How (if at all) does the company need to engage with professional communities? (e.g. contributions to the open-source projects they depend on)
        3. In what way will the company leave the world better than it was before, whether through customers, through employees, or through the product?
        4. What potential negative externalities (e.g. tragedy of the commons) will the company avoid creating, or will offset in some specific way?
    3. uncovering difficult truths
      1. the elephants in the room
      2. existential threats (with >70% probability of occurring)
      3. facing our limitations that we wish weren’t there
      4. contradictions that we don’t yet know how to resolve, or whether they even can be
  2. identifies
    1. the latent opportunities in market segments
    2. our assets and capabilities that give us leverage
    3. the moats which create durable competitive advantage
  3. determines
    1. the creative, inventive intersection of
      1. latent market opportunities (whether others could also exploit them or not), with
      2. our assets and capabilities (to generate outsized results from our limited time)
      3. to build
        1. must-haves, performance, and delighters (Kano )
        2. …better is differentiated performance and delight
        3. …better is differentiation that is difficult for others to copy
        4. …best are moats
      4. in a manner consistent with our values and societal responsibility (…better is a manner that strengthens our values and increases our societal impact)
    2. articulated in our primary courses of action
      1. market segments (target, accept, reject)
      2. customer profiles (target, accept, reject)
      3. personas / JTBD
      4. 3-5 cross-functional imperatives, specifying the transformation and outcomes required
      5. essential metrics (even if lagging, multi-input) that show whether we’re making progress
    3. and our guiding principles
      1. a self-consistent set of decisions, articulated so that others can follow.
      2. including second-order effects, both constructive to our cause and those that will be seen as negative by many employees, customers, or stakeholders, but which we must accept in order to hold true to our decisions, and keep all our actions consistent and aligned.
      3. including popular or sensible things that we’re not going to do

1 Companies vehemently defend profit-centers, while using loss-leaders to pressure competitors. For example, because “search” is Google’s primary profit center, any startup competing with Google for search traffic will be met with a severe reaction; Google will spend billions of dollars preventing competition, for example paying Apple to be the default search engine, or creating their own version of Yelp. Loss-leaders are large investments that don’t create revenue directly, but achieve some strategic aim; Microsoft put 1000s of developers on Internet Explorer for years, creating a free product that put Netscape out of business and for years prevented other companies from creating a browser that might reduce Microsoft’s power on the desktop. They eventually stopped investing, and Google did exactly the same to them with Chrome, with the same result.
2 For example, Zoom, Microsoft Teams, Google Meetup are direct competitors for online meetings. An alternative for a distributed team might decide to never have synchronous meetings, choosing instead some complex collaboration system. Another alternative for a company is to declare “no distributed employees and no work-from-home.”

…so that we win.

A strategy doesn’t require everything here; this is a buffet of choices. There is always more to analysis, more to consider, another way to prioritize, a different way to write it up and communicate it.

So, you can start with “good enough” and “better than what we had before,” and enjoy the benefits of having some alignment around important things and a few good decisions. Then iterate.