Twitter’s Biz Stone bemoans the company’s lack of foresight during a Tavis Smiley interview today (Twitter Co-founder: "I wish we could have predicted it.") In anticipation of this topic, I wrote:
Why Start-Ups Need More Strategic Planning, and Why Investors Should Help Provide It
back in December, and I think is worth a re-read today.
Briefly, entrepreneurs need to learn how stick their heads out from their clouds of passion and gain perspective—and if they can’t do it themselves, their investors need to push them to do so. It should be the obligation of an early stage investor to help firms think more strategically. I don’t see this as a distraction, I see it as necessary input to ensuring the product or service being devised is as well planned as it can be under uncertain conditions.
Of course, the naysayers will point to Twitter’s success and say they got through it. Sure they did (so far). Some won’t—and Twitter may have spent money and time, and created risks, they didn’t need to, all because they thought focusing on the practical, tactical issues of today was the best use of their time.
The companies survive because they are strategic, not because they are the best at execution. Doing something very very well may, may in fact, put a company out of business faster than doing it poorly if it is the wrong thing to do in the first place. Strategic perspective allows firms to make better choices about how to spend time and money, and any investor should demand strategic thought from the management teams in their portfolio companies.