You’re an entrepreneur. You have the heart of a warrior. But you’ve been fighting an uphill battle since day 1. How do you win? Let’s look at some advice from The Art of War by Sun Tzu, a Chinese general who wrote this classic treatise on military strategy in the 6th century BC.
[Note: I use the conventional male pronoun ‘he’ as a generic reference; please substitute ‘she’ if you prefer.]
1. Assessment and planning. War is life and death, and must not be entered into lightly. Investigate the terrain, the distance to cover, the unity of your army and the ability of its leadership, the season, the supply roads, and other factors in order to understand your chance of success. All war is deception: seem weak when you are strong; attack when you seem unable to. If your enemy is stronger, evade him. Seem weak so he grows overconfident. Distract him on multiple fronts and attack where he is weakest.
Comment: Know yourself, know your competitor, and know the landscape. Then you should know better how to proceed. The emphasis on deception is interesting. Is this strategy even possible today with how often people move between companies?
2. Waging war. Success requires winning decisive victories quickly, when your team is still enthusiastic and energetic, while limiting costs and conflict. This equates to picking the right places to attack early and cheaply for fast victories. Sun Tzu stated, “Thus, though we have heard of stupid haste in war, cleverness has never been seen associated with long delays.” Forage for supplies from the enemy. Use his food, his weapons.
Comment: Take advantage of your competitor’s resources; become a developer or reseller to understand their market strengths and weaknesses, leverage their customer marketing and education to position your product, poach their suppliers, use their FDA approval as a predicate for your efforts, approach VCs who did not invest in them but now want a similar company (yours) in their portfolio. This strategy is probably less useful when your competition’s technologies, leadership, strategies, and markets are constantly in flux. It might be suitable if your competition is an entrenched player and fairly set in its ways.
3. Use of spies. Spies come in 5 flavors: (1) local spies, or the local inhabitants of an area; (2) inward spies, the officials of the enemy; (3) converted spies, the enemy’s spies now serving your cause; (4) doomed spies, who carry disinformation to the enemy (and may be executed if discovered); and (5) surviving spies, those who bring back news from the enemy’s camp.
Comment: In today’s information age, you can spy on the web. You can also poach your competitor’s employees. But be careful, as some of these may be spies. Extreme cases have involved other countries where foreign companies have taken on native workers who actually work for local competitors or the government. These workers eventually leave, taking with them the company’s proprietary technology. The Washington Times has reported on a recent theft of trade secrets by Chinese nationals. New Republic and The New Yorker offer additional perspectives.
4. Weak and strong points. Whoever is first in the field and awaits the arrival of the enemy is fresh for the fight. Whoever is second has to hasten to battle and will arrive exhausted. March swiftly to places where you are not expected; an army can march great distances quickly if the territory they march through is undefended. If you are skillful in attack, your enemy will not know where to defend. If you are skillful in defense, your enemy will not know where to attack. Cause the enemy to split up his forces, so that your small army can defeat a small part of his army.
Comment: Surprise your competitor by being first to enter a niche they should have guarded, then defend that niche in such a way that they don’t know how to respond. Use your first-mover advantage to raise the barrier of entry for subsequent entrants: lock up key suppliers and partnerships, create network effects, provide unique technologies. Distract your competitor by announcing several initiatives so he will need to respond by dividing up his resources. Then attack your real target, where the resistance you encounter will be reduced. In lieu of an expensive campaign of distraction, startups sometimes choose stealth mode to mask their true intentions.
5. Strategy of attack. Supreme excellence in war consists of breaking the enemy’s resistance without fighting. Taking a country whole and intact is preferable to shattering and destroying it. Thus the best strategy is to frustrate the enemy’s plans; next best is to prevent him from bringing his forces together; third best is to fight him in the field; and the worst is to lay siege to his walled cities. A leader can ruin his army by: (1) commanding an advance when it cannot advance; (2) commanding a retreat when it cannot retreat; and (3) disregarding the need to adapt to changing circumstances. The 5 success factors are: (1) know when to fight and when not to; (2) know how to handle stronger and weaker opponents; (3) have a common spirit throughout all the ranks; (4) prepare yourself and engage an enemy where they are unprepared; and (5) have enough resources to win, along with freedom from interference by the emperor.
Comment: Fight your competitor where he is most likely to give up. The worst strategy is to attack him where he is strongly entrenched; it will be costly and counterproductive. Pick a niche where your competitor is unprepared, and prepare yourself well to win that contest. You know your vision and your startup best. Try to steer a course that respects, but is ultimately independent of, outside influencers (e.g., investors, advisors, consultants, family members). Strive for unity of purpose and passion, even when interviewing new employees.
6. Tactics. The clever fighter wins his battles by making no mistakes. Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated. Hence the skillful fighter puts himself into a defensive position that makes his own defeat impossible, and watches for the right moment and opportunity to attack the enemy. The victorious strategist only seeks battle after the victory has been won, whereas he who is destined for defeat first fights and afterwards looks for victory.
Comment: Good execution comes from good judgment. Pick a battle that you have already won, i.e., where your competitor is clueless, unprepared, has too much inertia or too few resources to respond, has no domain expertise, or has disgruntled customers. This may be a legacy market where your competitor has grown complacent, or a greenfield space where he is not meeting his customers’ expectations (such as introducing mobile payment). Re-read Geoffrey Moore’s marketing classic for startups, Crossing the Chasm.
7. Maneuvering. Do not pursue an enemy who simulates flight; do not attack soldiers whose temper is keen. Do not swallow bait offered by the enemy. Do not interfere with an army that is returning home. When you surround an army, leave an outlet free; do not press a desperate foe too hard. Such is the art of warfare. There are 5 dangerous faults that affect a general: (1) recklessness; (2) cowardice; (3) a hasty temper; (4) disregard for the military code of honor (e.g., shooting your fleeing opponent in the back); and (5) over-solicitude for his men (giving them too much care and attention), exposing him to worry and trouble.
Comment: Be wary of your competitor who may offer a joint venture or other incentive in order to learn more about you and your plans – especially if you’re an early startup. A large company has the luxury of waiting to see you test a new market, and the resources to re-engineer your IP, steal your customers, and take the lead if you validate that market. In contrast, you should be honorable and follow the Golden Rule. Why? (1) You will build a reputation for doing what’s right, and become attractive as an employer and partner or potential acquisition to other companies who value integrity (the only kind of partner you want); (2) you may need to recruit your competitor’s engineers someday, and you don’t want them to be resentful; and (3) you may invite costly retaliation from your desperate competitor or his customers if you provide no way out. Remember, people have long memories. In the compact community of Silicon Valley, what goes around comes around.
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