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Bootstrapped Giants

My Biggest Startup Strategy Secret...

Published 4 months ago • 4 min read

In the spirit of annual planning, today I'm going to share my favorite "secret" framework for stepping back and looking at your business and getting it to grow the way you want.

I learned this framework from two amazing coaches: Bryan Franklin and Dave Kashen.

It goes a little something like this:

Every business in its "natural, aligned" state grows EFFORTLESSLY. So assuming your business is not growing effortlessly, it's due to some form of MISALIGNMENT.

"Misalignment of WHAT, Jesse?"

I present to you: the "Spinal" Alignment of a Business. Think of each box as a vertebrae in your back. If they are all lined up, good things happen. When they are out of alignment, the business slows or even stops growing.

Let's first go through each section then talk about some examples.

Starting at the bottom is "Customer Desire/Market Forces." This likely sounds familiar: it refers to finding a real problem customers are having (think Airbnb solving the expensive hotel problem), or looking for white space in a market that is underserved (like the first coffee shop in an up-and-coming neighborhood). Lots of startups begin at that point and build the alignment up from there (of course, as your company matures, this chart becomes increasingly important to align).

Above that is "Brand Promise." This is what product or service you are known for and deliver in a high quality way (when you buy a Patagonia jacket, you expect it to have been made ethically with respect to the environment).

Together, these two are the age-old "product market fit."

One step up and its "Resource Allocation." Essentially, where are you spending money? It includes considerations about what people you have and what measurable activities they're doing.

Another step up and it's "Org Capabilities." Think of this as "unfair advantages" or things that the organization is really good at. Is it good at running paid media? Great at selling? Maybe great at product? One of my favorite examples of this is Basecamp's ability to get attention by picking on a bigger competitor. When they launched Hey - they're email app - they got national attention by fighting Apple's 30% App Store commission fee.

Next up is one of the most critical: "STRATEGY." In other words, what specific initiatives has the company focused on? We can see the importance of that in Satya Nadela's AI-everywhere strategy at Microsoft.

And then finally all the way at the top: Stakeholder Motivation. This is you, your team, maybe other people in the ecosystem. This can be viewed as the WHY behind the business existing. Is it money people will make from an exit? Is it a mission that everyone cares about?

One simple way to digest all of this is to use this hierarchy:

WHY is stakeholder motivation.

WHAT is strategy.

HOW is capabilities/resource allocation to deliver your brand promise to the market.

Ok let's do some examples:

One of my favorites is The Washington Post. For decades, it was an incredible business. Growing, spitting off cash, hell Warren Buffet was on its board! But then, things started to change. Consumers didn't want printed newspapers, technology created infinite competition, and WaPo was in steep decline. Multiple leaders were brought in, multiple leaders departed.

Then, Jeff Bezos bought it. He knew the spinal alignment secret. He started with the customer and built up…

Customers want great journalism, real time information, and they want to buy it easily. WaPo was known for great, hard hitting journalism (they broke Watergate, for example). JOURNALISM was a core "org capability," but TECHNOLOGY was not. So Jeff made that a strategic initiative (made a better app, site, added an Apple Pay integration for single articles, improved customer acquisition). And of course, it was owned by a rich family who may have not felt the same "motivation" he did as a person who just bought something for $250M, so he lit a fire under the company's ass.

Today, The Washington Post is a juggernaut. Although its readership has stagnated over the last year and it’s had trouble turning a profit, it’s still just behind the New York Times as the 2nd leading digital news publication in the US.

Here are some more personal examples:

When Ampush sold a stake to Red Ventures, we pivoted our business model. We went from a tech-enabled Facebook agency to a "full funnel strategic marketing partner." Which meant, with Red's help we'd take on search, conversion optimization, email, etc. So we called our top 10 customers to share the good news.

We only converted ONE of them to our new "full funnel" approach. And we actually lost a couple customers too. The business went backwards.

Why?

Our brand promise was as a great Facebook ad buyer. None of our customers knew (and some didn't want) all these other services. It was like your auto insurance provider telling you they'd do wealth management. People were confused.

So what did we do?

We shifted our strategy: we realized this pitch would go over better for NEW customers. We doubled down on selling it (strategic initiative). We also realized we had to actually build those capabilities (org capabilities). And that made it easy to figure out how to spend our time (measurable activities: selling new customers and learning search/CRO).

After a year or two, the new business was thriving and rivaled the old business in size! We found alignment.

Here's a few other mini examples:

STAKEHOLDER MOTIVATION: When I transitioned out as CEO of Ampush, the new CEO needed more equity in the company. It was critical he had aligned motivations.

BRAND PROMISE: When we first launched Unbloat, our reviews sucked and our CAC was high. We found a set of very good reviews (pre menopausal women) and started marketing (creating our brand promise) around this customer/issue. CAC got cut in half and reviews improved from 3.8 to 4.8 stars!

RESOURCE ALLOCATION: When GrowthAssistant hit a plateau, we used the alignment chart. We realized we had NO resources on "customer expansions." Only new sales. Expansions were happening but not in any intentional way. We shifted people over to expansions and immediately growth re-ignited.

CUSTOMER DESIRE: When Aux Insights first launched, our idea was to sell a programmatic "ad account review" to Growth Equity firms. As we got into market, we realized there was more customer desire for full-on 3 month consulting engagements to develop great digital marketing strategies. That's what we now sell and staff against.

As you can see, the alignment chart is a DEEP part of how I build businesses for success. Once you see it, you can't unsee it. And it's incredibly empowering! Anytime there's an issue, just ask: What's out of alignment??

So what are the lessons?
1) All businesses grow effortlessly when in alignment
2) When you miss your growth targets, look for what's out of alignment
3) Shift it quickly and profit

Thanks for reading and happy holidays!!

Jesse

Bootstrapped Giants

Jesse Pujji

Bootstrapped to an 8 figure exit @ampush. Now building a $1B+ bootstrapped venture studio @GatewayX and sharing everything I learn along the way.

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