This week, Nathan Baschez interviewed Hiten Shah about how he thinks about strategy, and his approach resonated with me.
➡Great Strategies Depend on Great Inputs | Nathan Baschez | Divinations
TL;DR: Shah thinks about strategy formulation like a machine. You gather inputs (customer interviews, trends, what other companies are doing, feedback), run them through frameworks (five forces, network effects, moats), and spit out a plan. He believes that most people focus too much on the frameworks, and not enough on the inputs. If you put garbage in, you’ll get garbage out.
That hit hard. For the first couple months, as I was thinking about what I wanted to build, I spent way too much time in my own head figuring out how to make a members club work at venture scale. I have like seven drafts of business plans in which I tried to guess at a value prop, talked about low-end disruption of graduate schools, worked out the network effects we’d achieve once we hit some number of members. It was so much “strategy” and not enough strategy.
I didn’t appreciate how big the shift from crafting a strategy for a going concern with real customers to crafting a strategy for an unborn company out of thin air would be. At Breather, I had customer feedback, data, and really smart teammates at my disposal. At [yet-to-be-named-twinkle-in-my-eye], all I had was ideas.
Despite hundreds of hours thinking about those ideas, I couldn’t answer the question: who is this for? I needed to focus on the inputs.
So I worked with a friend on organizing a series of focus groups, and we learned a lot:
adult life doesn’t have a good equivalent of college extracurriculars,
making connections is easy but building relationships is hard,
repeated interaction around learning and growth builds relationships,
the most curious people want to build networks outside of the field they work in,
people want a better answer to the question, “What do you do outside of work?”
Importantly, we learned that a clubhouse didn’t need to be the central focus and it didn’t need to be our starting point. While a clubhouse would facilitate a lot of the things our members want to achieve, what our members really wanted from us was a way to fight back against becoming boring as they grow up and become more one-dimensional.
That insight unjammed the machine. It allows us to start with the essentials - curious people, interactive learning-based programming, ways for members to build relationships in person and keep them going online. It helps clarify who this is for.
It also enables us to keep focusing on the inputs - through application responses, conversation, feedback, and observation - before locking into a strategy and business model.
I’m at almost the opposite place from where I started - from a framework looking for inputs to inputs looking for a framework - and it feels a lot better on this side. Inputs in hand, I’m working out what a community-first business looks like, which I’ll write more about in a future newsletter.
Biggest Learning: You need to focus 10x as much on the inputs at the early stage than you do later on, because you don’t yet have customers who are more than happy to give you feedback.