Agile Strategy

When it comes to growth, the existence of a clearly defined general strategy and vision is the topic that was mentioned the most (23 times). The existence of a clearly defined general strategy and vision was linked with six out of the seven startups we interviewed.

While the respective strategies differed from one another, six out of seven implemented an agile strategy and goal process that allowed them to move flexibly and reactively to the changing market and customer needs (AdviceLab, 06:31; MicroSecond, 6:37;

MyFish, 20:57; Poweray, 2:01; Snackable, 15:24; Spector, 11:42): “We couldn't set in stone a strategy and say, you're going to grow exponentially if you stick to the original strategy.” (Spector, 11:42). The startups leveraged this attribute for three different reasons: (1) the organization needed to be able to react and adjust quickly to the changing market needs (MicroSecond, 16:46; Spector, 11:42), and (2) the product and services should be built in iterations in a “tailored need approach” (AdviceLab, 06:36) around the customers’ needs (Spector, 11:42; Snackable, 15:24; AdviceLab, 06:36).

Lastly, (3) an agile strategy enabled them to exploit new market opportunities to reach product-market fit, either through diversifying their product and services or accessing new target audiences by engaging in strategic partnerships (AdviceLab, 09:24;

MicroSecond, 16:46; MyFish, 16:01; Poweray, 2:01; Spector, 11:42).

We identified three different strategies that allow startups to be agile and to pivot quickly.

These are strategies based on (1) diversification; (2) customers; and (3) partnerships. In the following, we review each one of them. We found that some firms used combinations of those three strategies. Some examples of combinations are briefly summarised at the end of the section.

A Strategy Based on Diversification

MicroSecond chose diversification as their main strategy for growth which allowed them to reduce risks and keep on going if one of their activities was not working as well as they initially thought, as described in the following quote:

“So, there are ways to diversify yourself and what we are accounting for and we have leading technologies in 3 different fields that are targeting a lot of different verticals so, I think, we are very diversified and it's for sure the most important factor on this. So you don't have a singular item that is able to shuttle down.”

(MicroSecond, 16:46)

Similarly, Spector chose to diversify whenever they sensed an opportunity that was worth pursuing and put everything into place to exploit that opportunity:

“We didn't have a chip strategy at the moment, but we started the market. We saw that we just wanted to refer to another company so that nobody's doing, we said, okay, no, there is demand. We met the quick business plan itself, okay, that's an area we want to entreat. And then we assign resources. I was personally responsible for this.” (Spector, 11:42)

Even though Spector did not have all the sets of competencies to diversify, they were always willing to expand them whenever possible, thus allowing them to enter new industries, as illustrated in the following quote:

“And then if we felt that it's still within our competencies, okay, if it's not core competencies, but if we can extend our competency over there, let's try it.”

(Spector, 11:43)

A successful strategy that paid off: “Now we have something like 8% of our revenue coming up from designing chip-services in two years.” (Spector, 11:42) It was the agile nature of their strategy that enabled them to utilize arising opportunities (Spector, 11:42).

Spector's founder further insisted that his firm’s strategy was not set in stone and evolved over time:

“That's one of the things so one of the parts we were able to try to change their strategy if we felt that there is growth in another place.” (Spector, 11:42)

While MicroSecond's founder also based his strategy on diversification, he pointed out that it was mainly to reduce risk in the face of uncertainty: “We are trying to diversify in many dimensions to decrease vulnerability to, for example, entrance of competitors, financial crisis.” (MicroSecond, 16:46).

A Customer-Centric Strategy

Snackable chose to build its strategy around its customers by listening closely to them, thus building a product that fulfilled their needs:

“And the most important thing is on your product and your customers, and making sure that you're providing, you know what they need, in the format that they need it. And if you're doing that, then your numbers can look after themselves.”

(Snackable, 15:24)

Not only Snackable had a customer-centric strategy but they also focused on delivering high-quality products tailored to their customers’ needs (AdviceLab, 6:31). Similarly to Marketic whose mission was to produce high-end products (Marketic, 5:05). Similarly to Marketic's founder, Poweray's founder chose to follow its clients’ needs by developing a high-quality product at a higher price but with lower maintenance costs:

“So we are robust for the fuel and fuel is more than half the yearly cost of a plant.

Basically the client can buy cheap fuel by having our design. Secondly, we have so little in the dust in the fuel that we don't need any filters so the clients are saving both investment in these filters and also operation costs. [...] So when

people calculate the economies in 20 years, our technology gives the lowest energy bill.” (Poweray, 8:07)

In the case of Spector, being a consultancy, its strategy was logically based on its

customers’ needs: “And what happens is that, okay, if our product is basically. you know, it's consultancy is actually bringing custom solutions to customers. ” (Spector, 5:12) Furthermore, to be able to cater to its customers’ needs, Spector did not hesitate to hire an experienced person that had expertise in a field where they wanted to diversify:

“We didn't have a strategy, we're doing a lot of different projects, but we brought in a bank CIO - this is one of our VPs. As a former bank CIO, he actually knew the needs of the customers so he said, look, you have to orient into solutions x y z.” (Spector, 22:10)

A Strategy Based on Partnerships

Spector’s strategy was not only agile and customer-centric but also based on key

partnerships. Whenever an opportunity arose, they did not hesitate to partner with a key player in the pursuit of an opportunity:

“And at some points in with the original, the first instinct was to say: ‘Okay, let's partner with a company whose core competencies’ then, we went out in the market and we found out there is such a huge demand for chip design services.”

(Spector, 11:42)

In total, six out of the seven firms have engaged in inter-organizational relationships that enabled exponential growth in their firms’ reach (AdviceLab, 4:54, 9:24; MicroSecond, 4:32, 7:26, 10:04; MyFish, 16:01, 20:57; Poweray, 2:01, 13:47, 19:58; Snackable, 4:54, 7,46, 18:15; Spector, 11:42, 22:10, 25). In all cases, the partnership the firm engaged with played a decisive functional role in the exponential growth, which can be

differentiated in different areas. The overall motivation can be summarized in building lasting relationships that created new opportunities in the future in which the firm could grow (MicroSecond, 4:32; MyFish, 16:01, 20:57; Poweray, 19:58, 15; Spector, 11:42, 22:10). This was executed by the startups either through diversifying the firms’

capabilities to fulfill new projects (AdviceLab, 9:24; MicroSecond, 10:04; Poweray,

13:47; Snackable, 18:15; Spector, 22:10, 25) or through the direct access to new target audiences (AdviceLab, 15:28; MicroSecond, 4:32, 7:26; MyFish, 16:01; Snackable, 7:46). Examples of increasing the capabilities for project-fulfillment were exemplarily used in Snackable, - a streaming platform - where the founder described the positive impact of partnering with one of their content providers:

“that [partnership] will have a significant impact on our business, [...] having incredible unique content where the stakeholders can also, you know, create audiences for us, [...]

that you won't get anywhere else. So that will be a growing part of our model as we go forward.” (Snackable, 18:15)

Snackable states in this quote that this partnership created another USP, and therefore and additional value for their end-users. The same firm leveraged another partnership that provided them with access to a new market, by targeting their partner’s needs and framing their product as the ideal enhancement:

“It doesn't take a great leap to realize that telecommunication companies are significant opportunities because content plays out really well, of course on mobile phones [...] Telecommunications companies are looking for an edge against their competitors and wanting to engage their customers further and use bandwidth and everything. So they are a very natural partner for very high-quality content.” (Snackable, 7:46)

By partnering up with this telecommunication firm, their app rolled out to every device of that telecommunication firm, not just providing them with many more users, but also transforming their cost-structure towards one that benefited exponential growth more:

“So you can see our content there, but in terms of significant numbers worldwide, then working with telecommunications companies is a perfect distribution model because we don't have to pay everytime we get a customer, they are providing the customers to us so then we have a shared revenue model with our

distribution partners.” (Snackable, 7:46)

Nearly all the firms used combinations of strategies. For example, Spector applied all three of them whereas MicroSecond used diversification and partnerships as the pillars of its strategy. For a better understanding, these combinations are summarised in Table 13.

AdviceLab Marketic Micro Second

MyFish Poweray Snackable Spector

Diversification strategy

Not discussed

Not

discussed ✓ Not

discussed

Not discussed

Not

discussed ✓

Customer-

centric strategy ✓ ✓ Not

discussed

Not

discussed ✓ ✓ ✓

Partnerships

strategy ✓ Not

discussed ✓ ✓ ✓ ✓ ✓

Table 13 – Agile Strategies used to reach Product-Market fit