Your startup should try a switchback strategy — Matt Marx

MIT Sloan Asst. Prof. Matt Marx

MIT Sloan Asst. Prof. Matt Marx

From Xconomy

When it comes to startup strategies, many entrepreneurs assume there is one optimal path. They may need to experiment or “pivot” initially among alternatives, but once they fix on an ideal strategy they simply need to execute. For example, a startup attempting to commercialize a new technology faces the strategic choice of whether to “go it alone” or cooperate with existing companies. Entrepreneurs are often taught to settle on a single strategy rather than trying to do too many things at once, but for some new ventures it may be advantageous to adopt multiple strategies—sequentially.

A new way to look at strategy involves the concept of a “switchback.” Think of a hill that is too steep to directly climb. An alternative is to proceed diagonally up the grade, eventually reversing direction, similar to mountain trains like the Darjeeling Express. It may seem like a slower path—and may even involve some backtracking—but in the end the climber reaches the top rather than getting stuck when trying to go directly.

This approach can work for entrepreneurs too. If the climb to their ideal commercialization strategy is too steep, they may build a “strategic switchback” in that they initially pursue a different strategy—which would be suboptimal in the long run—but which enables later switching back to their ideal strategy.

This is different from the popular notion of “pivoting,” where the entrepreneur iterates through a series of experiments to find potential approaches to the market. While pivoting involves trying multiple approaches in a trial-and-error fashion, switchbacks depend on the success of the initial strategy—not failure. It’s only when that initial strategy works that the startup is able to switch to its originally preferred strategy.

Read the full post at Xconomy.

Matthew Marx is the Mitsui Career Development Professorand an Associate Professor of Technological Innovation, Entrepreneurship, and Strategic Management at the MIT Sloan School of Management. 

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