How Silly Entrepreneurs Like Me Interpret STRATEGY..

So, I’ve seen my share of consultants, business advisors, strategy thinkers, brand architects, vision pilots and every other ‘pretender’ of the business world roll through my doors. I’ve endured, suffered and sometimes even gone into convulsions while listening to their endless volley of garbage.

Once a guy in a serious black Armani asked me – ‘So- what’s your vision statement?’

‘To make Money,’ I said.

He almost puked his breakfast out and looked at me as if I had gone to a Michelin starred restaurant and ordered a Big Mac.

I gave up on these ignorant people long time back and thought of sharing my interpretation of STRATEGY that has worked well!

S – Simplicity
We detest mission statements and vision documents. Expanded further…

T – Tasks
We break each operation of the business into a task and assign it to one person. Then we track that task like a hound.

R – Revenues
Revenue is the central theme of discussion. From where, how much, and if it has been collected.

A – Analytics
We measure everything that moves. Expanded further…

T – Time Table
Every task begun is ‘timetabled’. This helps us to measure what we are spending time on and when to pull the gun.

E – Economics
Sometimes it’s important to pull back and measure the environment and not just your business. Expanded further…

G – Gut feeling

Just listen to your gut to tell you what to do. Your Gut is the best McKinsey you could ever hire.

Y – Yell
Yelling, shouting and telling everyone what you do is very important so that you stay on top of mind.

Expanded are a few of my favorite themes:

S – Simplicity

In all our Companies, we strive to infuse simplicity in everything we do. It may be defining the business ‘in games2win we make online games’; to the kind of products we are attempting to build; to the job expectations of the employees; and especially in business communication with the outside world.

I see no sense in complicated ‘mission statements’ and vision documents and brand tag lines, etc, etc. They serve nothing but consume precious management time and at worst even confuse the business teams.

On this point, I am reminded of a favorite story of mine. Many years ago the great British explorer George Mallory, who was to die on Mount Everest, was asked why did he want to climb it. He simply said, “Because it is there.”

Imagine if George Mallory had hired a $700 per hour horn rimmed vision consultant at this conference to speak on his behalf.  That dude would have rambled ‘Mountains have defied the human spirit and it’s overcoming their scale that creates the everlasting impact of the glory of mankind in the realm of human achievement………… and hence my client has decided to rise up to this challenge into this bold………..’. And George please pay me $700.

Don’t complicate simple things.A – Analytics

Do you measure everything that moves?

We measure everything (except how many times people visit the washrooms).

We know that a lavender background will work better for a teen girl vs. a pink background which works for a tween girl. In a banner, we know where to place the ‘play now’ button (left aligned or right aligned). If we are promoting banners for dress up games, the models should wear Goth or Wedding costumes. When kids come to our virtual worlds, we know that the US kids will spend on their 11th visit but the child from Croatia will need to visit 27 times before her parent takes out her credit card.

Analytics can be magic genie in your business if you instill the discipline and the science of measuring everything and then breaking your head reviewing cold columnar data every day.

It’s this review of captured data that’s most painful and that people skip so easily.

Zynga – the business house of Cityville and Farmville, is looked upon by investors as an Analytics Company more than a games business. They know each and every variable in their business and how they can be affected. That’s how they can make money despite spending sometimes 1 million dollars a day on Facebook ads to acquire users!

Measure, measure, measure everything. I say even how often you use the restroom. And then analyze, analyze, analyze ( ps – maybe you will realize that a latte makes you go 3 minutes sooner than an Americano).

E – Economics

It’s important to take a step back and sometimes just reflect on the ‘economics’ of the business.

Consider the concept of pricing. I remember mentoring an entrepreneur who was on the brink of starting to charge his customers (for financial information), was benchmarking his introduction prices to ‘what seemed’ affordable. When I asked him if that made him profitable, he had no clue! There was this hurry to get into pricing and hence there was less thought to the overall ‘economics’ of the business.

Let me explain how we think of iPhone games.

Description Free Game on itunes Charged Game on itunes Charged Game on itunes
Cost of making a game US$ 3000 Cost of making a game US$ 7000
Downloads possible 10000 Downloads possible per day 200
Consumers who play everyday 10,000 Revenue per game (99cents less iTunes share) 70 cents
Revenue from ads everyday (US$ 3CPM – 2 ads per play) 60 US$ Revenue per day 140
Break even 50 days Break even 50 days
Possible shelf life 200 days Possible shelf life 100 days
Net Profit possible 6000 US$ Net Profit 7000 US$
ROI 100% ROI 100%
Risk quotient (cost/profit) 0.5 Risk quotient (cost/profit) 1.00

The chart shows that Free games can be more lucrative than Paid games!

So honestly, if you are not sure of a real Angry Birds on your hands, you may be better off trying to make simpler, ads supported games for iTunes’ customers who will reward you almost like they would if you had made a just about successful charged game, and that too with lower risks!

Long story short – keep Strategy as a measurable verb and not a haiku poem.

[Guest article by Alok Kejriwal. Reproduced from Alok’s blog].

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