The Yin and Yang of Startups’ Strategy

Before entering the entrepreneurial race, entrepreneurs must first discover a real market need. In fact, the global movement of the Lean Startup approach, initiated by Steve Blank and Eric Reis, is based on engaging in customer discovery and validation, prior to any investment in product development.

Great tools and excellent books on the subject can help entrepreneurs as they strive to uncover real unmet needs in the market. For example, Value Proposition Design (by Alex Osterwalder and Yves Pigneur) explains how to observe the jobs, pains and gains of customers; Running Lean (by Ash Maurya) emphasizes how to capture customers’ problems; and Talking to Humans (Giff Constable) or The Mom Test ( Rob Fitzpatrick) offer invaluable tips on how to interview customers in order to fully understand what they need and want.

However, there is an important parameter that often overlooked: the unique abilities of the firm. A real market need is only relevant if we can address it with a set of unique abilities or core technologies that we currently possess or that we plan to develop. In other words, a compelling strategy emerges only when the company can create a unique knowhow to fulfill an unmet need in the market.

The market need and the company’s abilities are two necessary ends of a startup strategy. In fact, they are just like the Yin and Yang: a whole is created when two parts complement and connect with each other. You will need both ends to create a winning strategy!

But…which part should come first?

The common assumption by entrepreneurs is to begin with a clear need from the customers, as mentioned above. This approach is typically called ‘market pull’, as you pull your opportunity from the market. Alternatively, your business opportunity can be initiated by a unique knowhow or innovative technology. This approach is termed ‘tech push’, as you search how to push it into the market.

Seeing as a winning strategy requires both ends, it doesn’t really matter which one you begin with, or which part sparks the trigger for your entrepreneurial opportunity. Eventually, they will both need to be completely aligned and interrelated, just like the Yin and Yang.

In fact, in the early steps of most entrepreneurial journeys, founders zig-zag between the two, pivot and adapt continuously, until this ‘fit’ is achieved to create a winning strategy.

So remember, finding and validating a real unmet need is fundamental, but forms only one part of the equation. Understanding your unique abilities, and how you can utilize them is just as important.