The Secret to Startup Happiness? A Plan. Have One.

Startups are supposed to be scrappy, opportunistic, and always hustling. Their agility is their superpower, right? Who has time for planning anything more than the supply chain? Why bother setting a comprehensive strategy as long as we’re growing? As long as customers keep pouring in? As long as the money keeps coming in?


My experience suggests that teams easily rip themselves apart when they run this way, and suddenly cash becomes tight


Because they have yet to agree on the rules for diagnosing what is or is not working in the business, multiple definitions of success may exist on the team, creating needless conflict and team chaos.

Strategic plans are not just analytical or financial documents; they keep your team sane and much happier by:

  1. Focusing you well in advance on specific top-line targets- you can’t spin a target revenue number a year later. It is what it always was on January 1 (or whenever you wrote it down). And this number forces the team to sit together and figure out what happened using root cause analysis. 
  2. Providing the team with rules to say ‘no’ to distractions masked as ‘opportunities.’ As startups succeed and gain notoriety, the prevalence of strategically inappropriate opportunities grows crazy fast. Every possible stakeholder wants in on your cash flow. They flood your LinkedIn message box. Instead of getting upset and then being moody in front of your team, your plan helps you filter cold outreach and move on with your day. For example, you’ll know if you’re even looking for a branding agency this year. Hint: cold outreach from a prestigious investor is not something you want to delete because you told yourself in a huff to ignore ALL cold outreach. 
  3. Helping the team de-personalize decision-making – This should be number one on this list. The primary reason startup teams rip themselves apart is when root cause analysis (see above) gets taken personally. Small groups operate semi-formally for a reason. This is normal. What’s dysfunctional is when everyone tries to play marketer or finance guy or when the marketer takes undue offense when the large marketing campaign doesn’t create new customers. Plans focus everyone on long-term goals, keep KPIs, and make this or that executional hiccup a team reality for team-based problem-solving. Plans are not predictions anyways. 
  4. Providing the principle(s) for evaluating if this or that tactic has long-term value and is worth prioritizing when times are tough – Plans are how you do not cut into the bone accidentally when cost-cutting. BigCo uses plans religiously to avoid severing a profit artery after an exciting off-site. The same value holds for a startup team with limited resources because a good plan reminds you of the key metrics to use (in an age of nearly endless metrics). The most critical metric is a question: is this tactic serving the long-term growth strategy we agreed on, or did we drift into an executional ditch?
  5. Unifying the team around a long-term, motivating goal – what motivates startup teams the most is an impact on the world. Good plans always begin with reminding everyone of that long-term objective. This puts near-term issues into perspective and also makes it very hard for the non-committal to hide their disinterest (i.e., the people just on your team to boost their resumes). 

A strategic plan is not a luxury for over-funded startups. It’s a team cohesion imperative for the average, underfunded startup. It keeps your team interconnected and cohesive. It keeps them much happier as a result. Objectivity = calm.

Has this made you think about your current strategic plan? Do you want to build a competitive strategy that increases your ability to achieve and sustain exponential growth? Then join the last cohort of the year of founders, Riding the Ramp – Q4 2023 training Nov 17th.

Dr. James Richardson

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