StartupLandia Through the 7 Powers Looking Glass
Q: “Captain, what is our Strategy?” A: “Our Strategy is to Win!”
(unspoken, yes, we all want to win, but how do we actually do that?)
Sounds like the opposite of…
Team: “Dungeon Master, can you help us?” DM: “With what?” Team: “Our program, it broke!” DM: “Define ‘Broke’…”
The point here is that in both case, the use of the word “strategy” and the description of the program as “broke” in both cases, these words represent a stack of other, smaller more actionable steps. In the case of the broken program, there is probably a moment where tab A didn’t get inserted into slot B, so the more useful statement of “slot b isn’t being engaged” means the answer lies near “go figure out why tab A isn’t doing what it is supposed to do.”
In the case of the Strategy conversation, things can be a bit murkier. Many of us have sat in on strategy and planning sessions, many of us have been bored to tears by these sessions. More importantly, Strategy discussions can shift around like the dunes of the Sahara. As professional product engineers, we know that agreeing on some basic language offers the powerful step of collectively establishing a reference point. (We’ll call that Collective Referentialism, jk)
Establishing common language and recording some basic metrics allows the establishment of data driven, long term decision making. In this case, we’ve recently read the NFX Ventures post on The 7 Powers framework. Generally speaking, we love breaking abstractions into measureable attributes and the 7 Powers Framework illumnates 7 actionable traits that a business can effectively measure themselves on.
Let’s evaluate ourselves through this framework. As we do in many situations, we will give ourselves points for each attribute and then add them up, a perfect score would be 10, a score less than 4 indicates significant near term problems, a score of greater then 7 means on probably on the fast track to some great stuff…
1.5 - StartupLandia has this trait at world class level
1.0 - StartupLandia has this trait at regional level
.5 - StartupLandia has minimal aspects of this trait at any level
0 - StartupLandia has no aspects of this trait
7 Powers (as forward looking indicators of potential)
Network Effects -> .5
The value of a service to each user increases as new users join the network.
Startuplandia currently functions as a consulting services business, we don’t court large groups of people and we don’t have much connectedness between our client projects. We have a tight connection to https://rootsystem.com/ and we give ourselves .5 (vice 0) because in truth, the more client projects we have, the more visibility our work gets, as our work gets more visibility, it makes it easier for investors to know that we will deliver the goods, which in turn drives value to the client project. We give ourselves a .5 and a notice to improve.
Cornered Resource -> 1.5
A business that leverages a cornered resource has preferential access at attractive terms to a coveted asset that can independently enhance value.
Have you ever tried to hire a developer? You know those scenese from the show “Silicon Valley” where the developers are getting xbox’s and schwag and gifts and parties and then in some cases salaries north of 250k with unlimited vacation time? Yeah, that is a cornered resource and oh by the way, Startuplandia’s founder, John D (author of this post) has the developer (and designer) recruiting super power. More important than our access to these people (not just resources) Startuplandia knows how to engage people’s desire to create in a manner that sidesteps the crazy “how expensive can this be kind of battle” that happens in mainstream technical recruiting (and then we pass this lower cost production system along to the end client). We give ourselves a 1.5 and notice to keep up the solid work, keep exploring and staying in front of what motivates people!
Scale Economies -> .5
A business in which per unit cost declines as production volume increases.
StartupLandia, a services business built by forming amazing teams. We don’t ship per unit products and we never ship the same thing twice, we do however sell time. We have found the ability to “decrease production costs” as “production output increases”. We don’t really love this attribute of the framework and part of our success focuses on helping people choose to build less (which lowers output costs) and is a Counter Position. For this we give ourselves a .5 with a note to stay focused on what matters (amazing teams of people, not lower per unit production costs).
Switching Costs -> 1
A business in which Stickiness of your product can protect you from the forces of competition if it locks your customers in.
Again, we ask, Have you ever tried to hire a developer (or designer) ? Then, we ask, Have you ever tried to build world class software ? Then, we ask, Have you ever tried to solve complex user/design problems ?
Hiring a world class technical team and then making software is crazy hard. You probabaly don’t know this but tons of software ends up in the garbage bin cause it doesn’t serve enough purpose to justify its own maintenance costs.
On top of all this a lot of service based software consultancies actually spend of a lot of time building things in a complex manner driving towards “Stickiness”. Ultimately, a lot of entrepreneurs get saddled down with technical hydras that no one can either understand or work with all in the goal of attaining “Stickiness”.
StartupLandia seeks to build software that can be passed from one technical team to the other and in a way, we avoid stickiness, this also becomes a Counter Position, we give ourselves a 1
Counter Positioning -> 1
A newcomer adopts a new, superior business model which the incumbent does not mimic due to anticipated damage to their existing business.
Interestingly, Services Business, like StartupLandia are the oldest business in the book. As long as people have existed, they have had problems, buying the solution to your own problems through the work of others has literally existed since the days of old.
That being said, StartupLandia still has loads of opportunity to offer counter positions in how service people and support their quest to alleviate problems.
StartupLandia Counter Positioning
- We don’t drive towards vendor or ‘stuff so custom’ that creates lock in.
- We embrace code that might only have a 30% efficiency especially if delivery happens 3x faster, we still heavily test model & database level code (cause there is no recovering from bad data).
- We believe that the best software is no software, the 2nd best software is as little as possible.
- We know that the industry accepted jargon “We only hire the top 1%” couldn’t be true, otherwise there’d be no one available to hire. We hire people who are good competent programmers AND have excellent communication skills AND have reasonable business and design pattern thinking abilities. Ultimately, the most evolved organism meet the hurdles where the hurldes lie, they don’t over jump the hurdles as this wastes a ton of evolutionary energy, economics and product engineering win when supply meets demand, when implementation is balanced with the actual needs of the problem.
- We frequently have teams where product development is lead by a client CEO and a StartupLandia senior engineer (with oversight from me), the engineer looks for the easiest way possible to implement something and then after that rough thing is in the browser and user’s hands do we begin to really hammer on the visual design, this basically puts engineers into the product design role… YIKES!!!
We could go on with our counter positioned culture of service but this is a humble blog post…we give ourselves a 1 because we have not yet established a clear spectrum of competitors (yes, competitors exist bust we don’t have an identified group of them).
Brand -> .5
The durable attribution of higher value to an objectively identical offering that arises from historic info about the seller.
We love our brand, one of our awesome designers spent the winter of 2020 and spring of 2021 helping us develop and implement a new one. Many of our clients love our work but beyond that no really knows us, so that means we don’t have much Brand, we give ourselves a .5 because we have more than nothing, but not much :)
Process Power -> 1
Embedded company organization and activity sets which enable lower costs and/or a superior product.
We know early stage tech product development. From Design to Engineering to Growth, we have seen a ton and we have an exceptionally skilled (amorphous) shape that caters to every single nook and cranny. We probably won’t take projects that don’t fall from Seed to Series A because again, we love the early stage, we give ourselves a 1 because early stage engineering is quite dificult, though with the kind of depth and experience we bring to the table, we know how to consistently deliver amazing gear at lower than market prices.
So, we add up our score and by our simple math (no calculators please) we have a (.5 + 1.5 + .5 + 1 + 1 + .5 + 1) == 6, that is pretty solid given the threshhold of 7 for “on the fast track to some great stuff”. But, coming back to the “Captain, what is our Strategy” line, how does our self analysis matter? Well simply put, our strategy, to win revolves around improving our attribute scores until we see the kind of growth that satisfies us (caveat, truly iconic founders are never satisfied, sadly we might be happy but never iconic…). Anyhow, StartupLandia has no zero score attributes (great) and a handful of .5 scores, Network Effects, Scale Economies and Brand. On the surface Brand is probably what we would focus on, then Network Effects and in a very distance third Scale Economies. We scored 1 in Switching Costs (easy to improve but not sure if that is a cultural fit for us), Countering Positioning (tons of ways to improve this) and Process Power (hard but def possible to improve). So in short, we have basic guidance about what details under the murkey umbrella of Strategy actually matter.
I hope you’ve enjoyed this shallow dive into how we view our own business. If you would like us to take the calipers to yours in hopes of highlighting places to improve, please drop a line, [email protected].