Why Read This?

Some founders approach business challenges like debugging code: identifying and addressing symptoms without diagnosing root causes. As a result, many seed-stage startups fail not due to product deficiencies, but strategic misalignment. This article provides a structured framework for strategic thinking that’s compatible with how technical minds operate.

Strategy as a System Optimisation Problem

For technical founders, strategy can be conceptualised as a system optimisation problem:

Inputs: Market conditions, competitive landscape, resources, technical capabilities
Constraints: Capital, team size, time to market, technical debt
Function: Your strategic approach
Output: Sustainable competitive advantage and business growth

Just as you wouldn’t optimise code without profiling the bottlenecks, you shouldn’t craft strategy without diagnosing your critical challenges.

The Strategy Framework: A System Architecture Approach

I have two simple go-to frameworks for startup strategy. Richard Rumelt’s Good Strategy/Bad Strategy, and the GOSPA framework.

Richard Rumelt’s framework provides an excellent system architecture for strategy development:

1. Diagnosis: Identify the critical challenge(s) that must be overcome (the bottlenecks)
2. Guiding Policy: Develop your approach to address those bottlenecks (the algorithm)
3. Coherent Actions: Create specific, coordinated actions to execute the policy (the implementation)

The GOSPA framework complements this by providing metrics and execution structure:

1. Goals: Qualitative description of what you want to achieve
2. Objectives: Quantitative, measurable targets (SMART goals)
3. Strategies: Approaches to achieve objectives
4. Plans: Sequenced steps with ownership and timelines
5. Activities: Specific daily tasks

Template: Strategy for European Seed-Stage B2B Startups

1. Strategic Objective (1-2 sentences)

What system state are you trying to achieve in the next 12-18 months?

Example: “Establish product-market fit with UK-based mid-market manufacturers by solving their inventory optimisation challenges, creating a replicable model for expansion into German and Nordic markets.”

2. Diagnosis of Critical Bottlenecks (3-5 bullet points)

What are the specific bottlenecks preventing you from achieving your desired state?

Example:

• Enterprise buyers require extensive proof of ROI before adopting new inventory solutions
• Technical integration with various legacy ERP systems creates implementation friction
• Competitors have established relationships with procurement decision-makers
• Regulatory compliance requirements differ across European markets
• Our limited team size restricts our ability to support complex implementations

3. Guiding Policy (1-2 paragraphs)

What is your strategic policy for overcoming these bottlenecks?

Example: “We will focus exclusively on manufacturers using SAP systems, where our founding team’s expertise gives us unique integration capabilities. Rather than competing directly with established vendors, we will position our solution as complementary technology that leverages existing investments while delivering 30% inventory cost reduction. We’ll create a standardised compliance framework addressing UK, German and Nordic regulatory requirements simultaneously. We’ll reduce implementation friction by creating pre-built integrations and proving value through free pilots that require minimal IT involvement.”

4. Measurable Objectives (3-5 bullet points)

What metrics will validate your system’s performance?

Example:

• Complete 10 successful pilot implementations by Q3
• Achieve 70% conversion from pilot to paying customer
• Reach £300K ARR by end of year
• Reduce average implementation time from 6 weeks to 2 weeks
• Maintain gross margin above 70%

5. Key Strategic Initiatives (3-5 bullet points)

What major modules will you build to implement your strategy?

Example:

• Develop “SAP Quickstart” integration package that reduces implementation time by 70%
• Create case study programme with performance-based incentives for early adopters
• Establish advisory board of manufacturing technology leaders to provide domain expertise and credibility
• Build automated ROI calculator with real-time integration to customer systems

6. Strategic Resource Allocation

How will you allocate your compute resources to execute this strategy? Make this super simple. Just focus on the key initiatives that you have outlined and what either existing or new heads you plan to apply to the issue.

Strategic Anti-Patterns for Technical Founders

1. The Elegant Solution Fallacy: Building technically impressive products that don’t solve urgent market problems. Optimising for technical elegance rather than customer value.
2. The Feature Factory: Adding features based on individual customer requests without a coherent strategy, creating a maintenance nightmare and diluting core value proposition.
3. The Stealth Mode Syndrome: Perfecting the product behind closed doors while competitors capture market share and establish mind share.
4. The Technology-First Pitch: Approaching investors and customers with deep technical explanations before establishing business value, losing audience engagement.
5. The Scaling-Before-Validation Error: Investing in infrastructure, hiring and processes before validating product-market fit, depleting runway without achieving strategic milestones.

Strategy Iteration and Validation

Strategy isn’t a waterfall process; it’s iterative like agile development. Implement continuous testing and refinement. Review monthly or quarterly with your board or lead investor. Iterate to refine or pivot if you’ve hit a dead end. And stay agile.

The goal is to fail fast on strategies that aren’t working and double down on those that show promise. Just as you wouldn’t continue developing on a failing architecture, don’t persist with a failing strategy.

Using This Framework for Board Meetings

Your board pack should begin with your strategic framework, followed by progress against objectives and evolution of your thinking. Structure your board pack as follows:

1. Strategic Framework (1 page)
   • Strategic objective and critical bottlenecks
   • Guiding policy and key initiatives
   • Changes since last meeting (with rationale)
2. Progress Against Objectives (1 page)
   • Metrics dashboard showing performance against KPIs
   • Key wins and lessons learned
3. Strategic Discussion (1-2 pages)
   • The biggest challenge you’re currently facing
   • Options you’re considering to address it
   • Specific guidance you’re seeking from the board
4. Appendices
   • Operational metrics
   • Team updates
   • Product roadmap
   • Financial information

By structuring your board pack this way, you focus the discussion on strategic challenges rather than tactical updates. Board members can prepare thoughtful input rather than spending the meeting trying to understand what you’re trying to achieve.

Conclusion

For technical founders, strategic thinking should feel familiar: identify bottlenecks, design an efficient strategy to address them, implement, measure results, and iterate. The European context adds specific considerations around market fragmentation, capital efficiency, and sales cycles that must be factored into your strategic system design.

A clearly articulated strategy transforms your board meetings from status updates to valuable strategic discussions. By identifying your critical challenges and developing a coherent approach to overcome them, you provide your board with context to offer meaningful guidance.

Remember that strategy functions like a distributed system – all components must work together coherently toward optimising for the same outcome. As with any complex system, regular monitoring, testing and refinement are essential to achieve sustainable performance.