Platt Perspective on Business and Technology

Balancing resources and needs in the startup and early stage business – 2

Posted in startups by Timothy Platt on June 15, 2011

This is my second posting in a short series on balancing needs and resources in startups and early stage business, and on prioritizing what to bring in, what to develop in-house and what to defer or do without in meeting those needs (see Part 1.)

I finished Part 1 by noting that I would return to this topic area to “delve a bit into the issues of what skills to cover in-house, and the decision processes of what to bring in at liquidity-cost and what to defer or do without” and that is what I will be doing today.

And this brings me to a fundamental set of issues that any effective, competitive business needs to address.

• If a business is to effectively provide long term value to its marketplace, and unique value to its customers, it needs to develop and maintain a clear focus on its core strengths and on the core capabilities it needs in fulfilling its mission goals.
• The core capabilities it needs to develop and maintain are precisely the ones that would most effectively, efficiently help it to produce and distribute its defining products and services to its marketplace and in building and maintaining its market share there.
• Long term, what that marketplace and its consumers demand will continue to evolve, and for rapidly changing technologies and consumer expectations, that will always translate into a need for effective, focused, ongoing change on the part of businesses. So core capabilities and the resources needed to achieve them will have to evolve very rapidly too. Here, emphasis has to be on doing the right things in the right ways and on developing to do that and little if anything else.
• This posting is about setting up this system and starting a business on a path towards effective evolution in meeting and even defining consumer options and demands. Here, simply meeting consumer demands means keeping up with the competition and defining them means breaking new ground and creating new, unique value proposition capabilities.

Think of this as developing a virtuous cycle of development and production, delivery to the marketplace and sales there, collection of consumer information and use of that insight to redevelop to the next stage, and with a combination of improvements on the established and introduction of new and emergent products and services too.

• Successful startups and early stage businesses can in a sense be defined and identified in terms of how effectively they build and develop this type of market leading and market defining virtuous cycle.
• And this only begins with developing an effective workable business plan draft that can be used to plan out goals and benchmark progress.

I am going to further develop the line of reasoning I have started on here, and in Part 1 in a third series installment.

I note as a final thought here, that my analysis and discussion of successful startups and early stage businesses as presented in this series rests on a foundation I have been developing in Business Strategy and Operations and particularly where I discuss lean systems (see for example, my series on Virtualizing and Outsourcing Infrastructure.) Here startups and early stage have, essentially by definition, severe constraints on what they can develop and maintain where that would cut into liquidity and increase burn rate.

• They have to, for the most part, develop in-house and at minimal up-front cost, or defer or do without in launching this virtuous cycle.
• And successfully launching this virtuous cycle would arise emergent to their developing systems of operational processes and internal reviews of performance.

This series can be found in my Startups and Early Stage Businesses directory.

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