There are many approaches to creating a strategy. There are even more frameworks and various models used in this process. When you start applying all of this to a startup or a small/medium business, you realize that you could spend a full year developing a strategy if you follow everything “by the book.” That’s why many business owners stop approaching this task at all.
After studying many books, articles, courses, and gaining experience in building strategies for my own businesses and those where I invest and mentor, I’ve identified several types of strategy creation.
Startup
Here, depending on the stage, strategy comes down to actions aimed at identifying a problem worth solving, then creating a product to address that problem, finding product/market fit in a market large enough for the founder’s ambitions, and after achieving that – finding channels through which it can be scaled.
Frequent mistakes I come across:
Building a product without understanding customer tasks – how frequent, important, or painful they are. This often happens with technical specialists. As a result, you get what Y Combinator calls “a solution in search of a problem.”
Not calculating a financial model, which leads to a situation where the unit economics may not work even on paper.
Skipping over product/market fit validation straight to scaling. “We built a product and now we’re looking for investment to scale marketing…” But have you made any sales at all? And it turns out – no.
Ignoring competitors. It’s important to understand that:
Competitors are not necessarily companies doing the same or similar thing. Competitors can perform the same job in a different way. For example, for the job “spend time with family,” watching a movie, taking a trip, or going on an excursion can all be competing options.
Direct competitors should exist. In rare cases when they don’t, it’s a bad sign – the product might not be needed, the economics may not work, or the market might be too small.
Business
A business also needs to understand which stage of the lifecycle it is in, and what ambitions and goals the founders have. Depending on that, the strategy may focus on one of the following areas or a combination of them.
1. Survival.
Here, strategy comes down to crisis-management techniques: cost optimization, shutting down unprofitable lines of business, reallocating resources, sometimes hands-on management, and other similar measures. The business needs to survive and reach a stable condition before thinking about what to do next.
2. Stable growth.
Here, strategy is about continuing to do what already works well. This is done through:
Setting operational goals for revenue, profit, and equity.
Then, using reverse planning to determine how much product to produce, how many sales are needed, what marketing should look like, how many and what types of employees must be hired, and what management system needs to be built.
Then planning which development projects must be launched to achieve this.
After that, building a financial plan and making sure the numbers add up.
3. Searching for a new business model, new markets, or both.
This becomes necessary when looking for new sources of growth or, conversely, during a crisis. Here you need to:
Dive deep into customer and market research.
Formulate different strategic alternatives: key business logics, target audiences, product strategy, ways of interacting with customers, marketing channels, monetization models, key processes and partners.
Evaluate the alternatives based on financial efficiency, their ability to meet the goal, resource and competency availability, and risk level.
Make a decision.
You must approach this very flexibly, like a startup. New models should be tested before being scaled.
4. Solving internal problems and bringing order.
This becomes necessary when the business is growing well, but to reach the next level, it needs to create a management system and put the right people into all necessary roles. This is usually done in combination with point 2, but in this case the focus is on structuring the company.
Conclusion
Strategy is not a universal template and not a one-time exercise.
It’s a way of thinking that starts with an honest answer to a simple question: where is the business right now, and what actually matters at this stage?
Problems begin when a company tries to apply the wrong type of strategy to the wrong situation:
scaling without product–market fit, optimizing processes while the model itself is broken, or searching for new markets when basic structure is missing.
A good strategy doesn’t make the future predictable.
But it does make decisions more grounded, trade-offs clearer, and progress more intentional.
And that, in practice, is what allows businesses to grow – step by step, without losing direction.