Startups need time for soul searching

Like many business students, I was taught to first plan, then execute, then measure. It looked amazingly simple in that marketing or strategy textbook that weighed a ton in your bag. This basic model applies to many areas and philosophies of business, whether it be TQM, business planning, change management, or Kotler's 4Ps. But, after having worked with some startups, I can tell you that things aren't so linear in real life.

Startups often rely on the passion that their founders overflow with. And, indeed, many a great company has been built on it. But that passion is rarely refined at startup stage. In many cases, companies go through a trial-and-error process to find their true place in the world. One only has to look at some big brands that shifted their initial positioning to see that it's not a bad thing. There's Facebook, which confined itself to Harvard in the beginning. There's IBM who, after making it big in the hardware business, is now a software company. There's also Marlboro, which started as a women's cigarette. Not every startup will do a radical repositioning later on, but it's likely that most will have to refine their business offerings to adjust to the unforeseen.

This has several implications for startups:

1. Plan as much as you need to, but don't overdo it. Extreme granularity won't be much use when you realize you need to adjust at the strategy level.
2. Incorporate business plan reviews and employee/customer research into your plan for the first years. Listen to the market, then adjust.
3. Make sure you have enough fuel for the startup process. A lot of businesses close because of a lack of working capital, and it'll happen sooner if you don't factor in time for the soul-searching stage. For some, it'll be months before operations turns in a profit. For some, it could be years.
4. Capitalize on your founder's intuition, but move towards making that intuition explicit as time passes. You can extract models and business processes from intuition if you take a step back (i.e. stop and think about what you're doing) regularly. Don't drown in the dailies; contemplate, ruminate.

Is your startup in soul-searching mode? I hope that you make progress in clarifying your company's mission in the world. Feel free to comment about your experiences.