Summary of Create Something and Start Selling It

Reflection Questions for class 2 readings

The start-up companies need strategy to guide the following decisions and actions through analyzing dynamic external environment, internal resources and consumer needs instead of just deciding strategy using the entrepreneurial strategy compass. Firstly, strategy decision making is a dynamic adjusting process through learning by doing, especially in the changeable business environment nowadays. Secondly, strategy decision making needs to adjust according to the characteristic of the company and the consumer needs, since every start-up company is unique and it is hard to duplicate others’ success. Thirdly, the entrepreneurial strategy compass is more a reference rather than decision criteria. (Schramm, C.,2018)

Firstly, strategy decision making is not a static decision, entrepreneurs making strategies through their own experience rather than according to the past data. They use learning-by-doing process to analyze the discovery from the new experience through the proceeding and implementing the product plan (Schramm, C.,2018). In addition, most of the start-up companies need to go through many fails, analyze the reasons of the failures and accordingly adjust their plans. Take Alibaba for example, in the very beginning, Jack Ma set up a company to establish China's first Internet business website, China Yellow Pages, which is a website to spread Chinese news and business information, and introduce Chinese companies, industry and trade, but it finally faced a failure. After identify the pain point of the market, he decided to set up an E-commerce company which services Chinese SMEs. This strategy ensures Alibaba gradually become the world's largest online trade market and the world's first e-commerce brand.

Secondly, every companies have their own unique business model and major services, there might have consistence and similarity among these companies in the same industry, but it is improper to regard these similarity as the same pattern of strategic decision making. According to Joshua Gans, start-up company strategy can be divided into intellectual property, collaborate strategy, architecture strategy and disruption strategy and its decides by whether a company will collaborate with or compete against the other companies in the same industries and whether it going to build a moat or storm a hill. But actually, when the company begin to analyze and select the strategy, they may not use this specific pattern, the strategy decision is the output of the insights and experience from the unique founders instead of the fixed model.

Thirdly, the entrepreneurial strategy compass is more a summarizing theory of past start-up companies’ strategy choosing statistics rather than a guidance for the newly start-up companies to make strategic decisions. Take Pinduoduo as an example, it is a domestic mainstream mobile shopping app aiming to gathering more users and launch a group of friends, family, neighbors to buy goods at a lower price and it was listed in the United States in 2018. It is in the e-commerce industry which can be considered as the red ocean, but it is aiming at the niche segment, the people in the remote areas who are more price-sensitive and have more time to search for cheaper goods. The strategy for Pinduoduo can be generalize in the disruption strategy, but in the very beginning, the founder of it did not analyze and choose the strategy through the compass.