Strategy: As far as the mind can see

So...what exactly is strategy? How crucial is it to start ups?

Well. It is a pity that I had to learn this the hard way. I also wonder why I did not learn or understand this at LBS. Maybe they taught it but because I was inexperienced then, I could not relate to and hence, not retain it.

Strategy is like the ring on your finger. It needs to be a perfect fit. You need to be clear about what finger you would wear it on. You need to be clearer about what finger it is not for. To be of use, it needs to have a hole!

What defines a ring is the hole. What defines your company's strategy is what you are NOT going to be. First make a list of the most important customer needs you wish to address. Not more than three, I would say. Then, ask yourself - what are the trade offs I would make in order to excel at the things that the customer needs the most. These tradeoffs are what are going to be your USPs. They will guard you against competition. If you are a start-up, never ever do the mistake of assuming that you can do everything equally well.

For instance, if you are about to set up a coffee shop, since there are already tons of them, you might want to choose 'stellar service' over 'price', 'value added services' over 'just food' and 'do what you like ambiance' over 'only the best interiors'. That distinction is important. You got to choose where you will under perform in order to perform well on parameters that really matter. If you do not, Coffee Day or the most celebrated local bakery will surely eat you alive!

This was one mistake that I consistently did at Habits and then at, Ludus. I wanted to provide a great variety and huge choice, at optimal prices and good service. I also wanted to provide stellar ambiance and an option to play into the night.  I was keen to attract corporate employees on Thursday and Friday, college students from Mon to Wed, and Families on Sat and Sun.

Too many aspects to concentrate, I would now say. It would not have been wrong if I had deputed a champion and funds to focus on each aspect individually. 

IT: You have got 'E'-mail

• How important is IT for new ventures today? 
• Can one do without it? 
• What extent of IT knowledge should the founding team possess and what can be outsourced?
• If you are not a person with IT background, is it really possible to learn it on the go and make the venture a success?  

This is very crucial for start-ups. For me, IT is not just about having a website or a face-book page. I wish people come out of this thought. IT is also about back-end systems and processes followed for smooth operations.

And do not mistake, it is one of the most important things in today's business environment. Not taking advantage of the technological advancements would be a sin! Even if you do not have the funds to have comprehensive IT systems in place on day 1, having 100% clarity about what you need and how you need to phase it is important, very important.

Even if you are not a coder, I suggest that you spend quite some time (6 months to 1 year) understanding technology, its scope, scalability and limitations yourself. It would be a blunder not knowing or doing even this. Begin with social media, the basics of digital advertising (including google ad-words), SEO and then, get into all those free tools to create and manage your websites (wordpress etc.). For the back-end systems, excel is quite an evolved tool! You do not need customized software that costs lakhs. If you search a bit on the net, you will find ample advice and quite a few free tools for almost everything you need! And if you are coder, go ahead the extra mile and dig deep.

Only after this should you consider bringing a CTO on board or hire a technology partner. If you are outsourcing or engaging a company to be your tech partner, be very very careful. I strongly believe, from my experience that amazing IT systems could be built in as much as only 50k or as high as 10lakhs! It all depends on your knowledge. If you do not put in the trouble to do the above, please be ready to be taken for a ride - no matter how much of a professional and how efficient the technology 'partner' is. You will be shelling out 12-20$ per hour and there will be no end to it.

You will have to understand the following yourself:
1. The IT systems you need - align them with your business
2. The purpose of each (revenue generation, cost saving, branding etc.) and their prioritization
3. The risk of failure
4. The scheduling and budgeting
Ask as many experts as possible for advice, search the net to the hilt, post and seek advice in all possible online forums and professional networks.

Finally, you would do well to always remember that IT is not a tangible asset. You cannot resell it. Whatever you invest into it can be recovered only from effective utilization of it to A) generate revenues or B) save costs. Hence, it is a great double edged sword. If you put in the effort to clear the fog and be able to see 2-3 years ahead, you will rock. If not, it will just be another failed investment and will demotivate you to the maximum extent.

May be a starting point would be to start 2-5 years ahead. Ask yourself 'how and what would the customer behaviour be 2 years from now, and 5 years from now? How would my competitors be behaving then? What might the industry trends be?' You would be surprised with the insights you get for yourself once you start thinking this way.