A strategic framework for start-ups

When I started my small business seven years ago, I didn’t use any of the tools I teach in my Strategic Management class. It’s not that I went into it without much study because I did a lot of the usual trading area surveys, site feasibilities, and financial analyses. Maybe it was because the business is a franchise, or because the decision to start it was more tactical in nature. Regardless, I found the traditional strategy tools more suited for larger companies.

Like many entrepreneurs, I still dream of starting a venture that would change the world — or at least the Philippines. I often wonder if there are tools more suited for small businesses.

Recently, I came across the article “Strategy for Start- ups”

in the May-June 2018 issue of the Harvard Business Review.

Authors Joshua Gans, Erin Scott, and Scott Stern propose the use of an Entrepreneurial Strategy Compass. They argue that every new venture must consider two competitive trade-offs: “Do we collaborate or compete with established players?” and “Do we build a moat or storm a hill?” An entrepreneur’s decisions on these two aspects will lead to any of four generic strategies depicted in the quadrant.

Under the Intellectual Property Strategy, the venture collaborates with existing players and works zealously to protect the product or technology it develops. Ray Dolby developed noise reduction technologies and started Dolby Laboratories. The company went on to become a global standard by