Wednesday, April 16, 2008

Startup Strategy

In the Web2.0 world there are many ideas that are slight variations of the same. This variety creates excessive fragmentation of the very small lead users and the large middle is in no hurry to take sides, they wait around for consolidation and a clear leader with critical mass to emerge.

So what creates the next YouTube? Is that strategy? Network effect? First mover advantage?

Do startups need a strategy?
Or more specifically do they need one to be successful?

In the Web2.0, Social networking, free business model wave, can a startup succeed without a strategy?

Strategy is creating value by unique positioning.

If you take the list of startups that apply to Techstars or participate in Startup Weekend, they all perform similar activities in almost identical ways implying that their positioning is very similar with no discernible unique value. So a winner, if any, among these is determined by the pedigree of the founders and by the operational efficiency of their current startup.

Is this the right approach to select a startup to fund?

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