Strategic Coherence: The Deceptively Difficult Task of Figuring out Your Startup’s ‘One Thing’

Every entrepreneur knows that startups need to focus. What does that really mean? Consider three definitions.

First, focus means prioritization: not pursuing too many initiatives in parallel. As the truism goes, having too many priorities is indistinguishable from no priorities.

Second, focus means coordination: aligning efforts toward the same goals, working harmoniously rather than chaotically.

Third, focus means concentration: allocating maximum energy to real work — building, selling, and customer success — instead of general “company building.” I define this as talking to press, picking a law firm, team building, raising money, picking the T-shirt colors. Yes, such ancillary work is necessary — and it tends to be the most fun! — but it should occupy a minimal fraction of the leadership’s time.

These are definitions of execution focus. Absolutely essential, of course, but set it aside. Here I want to address a more fundamental notion of focus I call “strategic coherence.” Over a series of posts, I will argue that the more coherent a strategy a startup defines, the greater its chances of succeeding at everything it cares about: financing, market reception, sales traction, recruiting and employee engagement.

The foundation of coherent strategy is both a recognition and an articulation.

The recognition: that a startup does one thing. A startup can do only one thing. A startup exists to do one thing. If it thinks it is doing more than one thing, it is confused. If it does not really know its one thing, it is doomed.

The articulation: an expression of that One Thing that (1) summons the team to action and (2) calls to the market for attention.

To be clear, by One Thing I do not mean a strategy or a mission statement. Culture, values, and vision are separate matters. The One Thing is less grandiose. It is humble. It says “Hello, world.” It is a startup’s commercial identity, the basis for it being a profit-seeking business venture rather than an academic project. It is a readily-expressible, first-order product claim defining the boundary of what is inside versus outside of scope.

Let me illustrate with the example I know best from the early days of the company I co-founded, an insurance-software company called Guidewire Software*.

The first iteration of our One Thing was something like:

“A Java-based configurable platform for industry-specific, high-volume, moderately complex financial transactions requiring knowledge-worker guidance, workflow, and multi-party input.”

Obviously terrible, for many reasons. A few iterations later, it was more like:

“A modern P&C claims management environment enabling manufacturing-like process control.”

Much better, but still vague in some critical respects. So, eventually:

“A web-native core system suite — policy, claims, and billing — replacing legacy systems-of-record for P&C insurers with >$100m in premiums anywhere in the world.”

On the back of this statement, some twenty years of work and progress unfolded. There were struggles, elaborations, and adjustments — “web-native” would eventually disappear — but this sentence survived fundamentally unchanged as we strove to fulfill the One Thing we existed to do. It was far from a sufficient definition of strategy, but it was profoundly necessary.

Today, as investor and start-up advisor, I witness a surprising proportion of startups stumble right at the outset, either (1) failing to realize they can do only One Thing (the recognition), or (2) defining it in inconsistent or terms that mix vision, values, and mission into a confusing soup of aspiration (the articulation).

I see many beautifully prepared funding presentations fail by expressing a startup’s One Thing inconsistently, incoherently — or not at all! At best, this adds needless friction to how investors, recruits, and prospective customers understand the company.

Consider a few questionable examples I’ve seen (all slightly adapted to avoid antagonizing anyone):

  • “The first trust and security layer for the internet,”
  • “An operating system for organizing the world’s information,”
  • “A peer-to-peer framework for consumer finance and fintech app development,”
  • “A global community of workplaces where people can make a meaningful life, not just a living,”
  • “A process orchestration platform that augments LLMs to unlock the power of generative AI.”
  • “A zero-trust, sibyl-resistant liquidity market protocol leveraging threshold signature schemes”

Even if they are descriptive in some relevant sense, these identity statements are cryptic, jargonized, unrealistic, or expansive to the point of abstraction. They define many things, something metaphorical, or nothing at all. They forget that strategic focus is required not only by the limitations of the startup’s team but also by the comprehension and credulity of its target market. The world has no patience for obscure and implausible overtures, so it will pay those founders the most painful insult: indifference.

These identity statements also fail the team who must build, sell, and deliver the company’s offering. Under such descriptions it is all but inevitable the team will build products at the wrong level of generality, mis-set customer expectations, and dissipate precious energy along wasteful vectors. They do not undergird execution focus; consequently, they flunk the first test of strategic fitness.

Sound identity statements are:

  • Compact: brief enough to be readily comprehensible;
  • Declarative: unadorned with marketing and self-promotion;
  • Lucid: sharp, descriptive of a tangible function, intelligible to its market; and
  • Plausible: reasonably within the scope of a young company’s aspirations.

A few examples: “We provide…

  • …ML-powered, real-time valuation of commercial real estate, delivered as an API”;
  • …an online marketplace for maintenance expertise in energy extraction installations”;
  • …3D-printed, concussion-preventing, DTC-distributed helmets for road cyclists”;
  • …a workflow and decision-support e-mail co-pilot for customer service reps in financial services”;
  • …a unified content-management application and IDE optimized for game designers.”

These may be good ideas for a venture, or they may be terrible, but at least they are candidates! They are compact, declarative, lucid, and plausible. As such, they are not designed to persuade anyone: a startup’s expression of its One Thing is a strategic intention, not a marketing statement. Consequently, it is acceptable to do the same or similar One Thing as other companies in the space.

Persuasion and differentiation come later. First there must be clarity and stable comprehension by the team. This comprehension must be communal: It is not enough that you, she, and I have the same (general) idea in our heads. We must know that each other knows the same One Thing, and that each other knows that each other knows, and so on — and then act in concert.

Again, this is only the first test of strategic coherence: identifying the right One Thing and hewing to it collectively without distortion. It should be the easiest part of the entrepreneurial journey. It takes no capital, no team, no infrastructure. It just takes clarity of thought, self-awareness, and attentiveness to one’s market.

So easy, right? But founders who write this off as a trivial exercise should ask some questions of themselves:

  •  Do we express the One Thing we do anywhere or do we assume everyone “already gets it”?
  • Is every word of that identity useful and truthful about what we are actually doing today?
  • Can our target market understand and clearly visualize what we do based on this statement?
  • Is our One Thing at the right level of description, or would a narrower scope better reflect the claim we can fulfill within the next ~18 months?
  • What portion of our energy is assigned toward directly fulfilling this claim, as opposed to ancillary tasks?
  • How far are we away from fulfilling this identity, in both time and capital?

I believe VCs and the venture-funding process itself serves entrepreneurs by compelling these questions.

Yes, investors want to hear about a large end market, innovative product/technology, differentiation from competitors, a defensible position, and credentialed founders who are “swinging for the fences.” But more important is strategic coherence. Indeed, I believe that a startup lacking everything — new technology, proven leaders, market traction, favorable competitive landscape, a large initial TAM — can be investible if it is pursuing a coherent strategy, executing on the right One Thing at every stage.

Explicitly or not, this execution takes place within the “strategic frame,” a thesis defining what is essential and what is contingent in the startup’s search for durable product-market fit. It will be the subject of the next article in this series.

*Denotes a Battery portfolio company. For a full list of all Battery investments, please click here.

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