Good, Bad, and No Strategy
Strategy or Bluff
You were sitting in the company all-hands.
The CEO told you “AI is our future”.
The CPO told you “We will get there with AI-powered personalization.”
The talks went on and on.
This all-hands lasted for two hours, and you could fall asleep without missing any valuable information or any meaningful guidance.
You went back to desk and asked your boss, “what shall we build?”
“We will put an AI chatbot in our product.” Your boss said.
It sounds cool and you were excited.
After 6 weeks, the shining “AI-powered X” feature launched and everyone (in the company) celebrated. But no one asked the question, “How did the market react to that launch?” Because they already moved on to the next AI thing, or they didn’t want to know the answer.
The story keeps repeating at most tech companies at all levels.
Let me put it straight - AI is a jargon, not a strategy.
“AI personalization” is not a strategy.
“All-in-one tool” is not a strategy.
“Data driven” is not a strategy.
I’m not saying they are bad strategies.
They are simply NOT strategies.
In the right context, each of them CAN be a building block of a real strategy. Again, not necessarily a good one.
I know you are confused now - so
What the heck is a strategy?
I got it for you. After reading dozens of books and critically thinking through my 20+ years of professional work at big and small companies, I have an answer for you. Let me explain.
Strategy is 3 trade-offs.
To be more specific, a strategy must answer 3 questions:
- Who specifically are you serving (and not)?
Not “small businesses” or “Fortune 500”.
“Independent coffee shops with 1-3 locations doing $300K-$1M revenue who still use paper trail for inventory.”
That’s a specific customer.
- What specific problem are you solving (and not)?
I never ever want to hear “revenue”, “profit”, “operational efficiency”. A generic term is just a disguise of the real problem and means nothing in forming a strategy.
Keep asking “Tell me more” until you get to the bottom of it.
“They lose $2,000/month in spoiled milk and expired pastries because they guess instead of track.""
That’s a specific problem.
- What will you specifically do (and not do) to win against the alternatives?
Not “better technology”, not “AI”, not “personalized experience”. Everyone says that.
“We’re the only inventory app that connects directly to their existing POS system in under 10 minutes, no IT help required. But we are not built for chains with 10+ locations. We do not have accounting features. We do not offer annual discount.”
That’s a specific path without detour.
To help you better understand the concept, let’s do some case studies.
Case Studies of Good, Bad, and No Strategy
1. Good Strategy: Steve Jobs Returns to Apple (1997)
When Jobs walked back into Apple, the company was 90 days from bankruptcy.
They made 40 different products. Printers. Servers. PDAs. A dozen variations of the same computer with names nobody could remember.
Jobs looked at the mess and did something most CEOs can’t do.
He said no.
His turnaround strategy in one sentence:
“We will make four great products for people who think different—one desktop and one laptop for consumers, one desktop and one laptop for professionals—and we will make them beautiful.”
WHO: Creative professionals and consumers who value design over specs.
PROBLEM: Tech products were ugly, confusing, and designed by engineers for engineers.
HOW: Radical simplification. Four products. Obsessive design. Premium pricing. Won’t compete on price. Won’t be fearful of losing the revenue of printers, servers, or PDAs.
He killed 70% of Apple’s products in the first year.
The board thought he was crazy.
Fifteen years later, Apple became the most valuable company on Earth.
That’s good strategy. Clear choices. Clear sacrifices. One sentence a 12-year-old could understand.
2. Bad Strategy: Nokia Defends the Fortress (2007-2013)
In 2007, Nokia owned the mobile phone market.
40% global market share. A billion customers. The most recognized phone brand on Earth.
When Steve Jobs unveiled the iPhone, Nokia’s executives watched the presentation.
They weren’t scared.
They laughed.
“No physical keyboard. Glass screen that easily breaks. $600 price tag. Battery dies in a day.”
They had data. The data said Nokia was winning.
Nokia’s strategy:
“We will defend our position by making the best hardware, maintaining carrier relationships, and improving Symbian OS incrementally—because the mass market wants reliable, affordable phones, not expensive toys for tech enthusiasts.”
WHO: The global mass market—billions of people who need phones that work. Not who are willing to pay high ticket price for shining new gadgets which “don’t work”.
PROBLEM: People need reliable communication devices at accessible prices.
HOW: Best-in-class hardware. Unmatched distribution through carriers. Incremental software improvements on Symbian. Won’t abandon Symbian for an unproven OS. Won’t price ourselves out of the mass market. Won’t let Apple’s niche product distract them.
This is a strategy. Clear who. Clear how. Clear won’t do.
So why did it destroy them?
The assumptions were wrong.
Nokia assumed phones were about hardware. Apple proved phones were about software and ecosystems.
Nokia assumed the mass market wouldn’t pay $600. Apple proved they would—for not the communication use cases but for the rich experience.
Nokia assumed carrier relationships were the moat. Apple proved consumers would demand carriers carry the iPhone.
Nokia assumed Symbian was “good enough.” Developers proved apps were everything—and they all went to iOS.
In 2011, Nokia’s CEO Stephen Elop sent the famous “Burning Platform” memo:
“We are standing on a burning platform. The battle of devices has now become a war of ecosystems.” He was right. But it was already too late.
Their pivot: Partner with Microsoft. Adopt Windows Phone.
Another clear strategy. Wrong bets for both Nokia and Microsoft.
The lesson: Nokia didn’t fail from ignorance. They saw the iPhone. They analyzed it. They made their choices. They bet that their strengths—hardware, distribution, scale—would outlast Apple’s novelty. They just didn’t see the future as Jobs did.
That’s how bad strategy looks like.
3. No Strategy: Yahoo (2010-2017)
Yahoo had everything.
In 2008, Microsoft offered $44.6 billion to buy them. Yahoo said no.
Then they spent the next decade doing… what exactly?
2011: “We’re a media company.” They hired a TV executive as CEO.
2012: “We’re a technology company.” They hired Marissa Mayer from Google.
2013: “We’re a social company.” They bought Tumblr for $1.1 billion.
2014: “We’re a mobile company.” Mayer declared mobile the future.
2015: “We’re a content company.” They hired Katie Couric for $10 million/year.
2016: “We’re a… we don’t know.” They sold to Verizon for $4.8 billion - one-tenth of Microsoft’s offer.
There was no strategy.
No specific WHO. Were they serving advertisers? Users? Publishers? Everyone?
No specific PROBLEM. What did Yahoo solve that Google, Facebook, or Netflix didn’t?
No specific HOW. They bought 114 companies in a decade. They tried everything.
My friend, just remember
Saying YES to everything means committing to nothing. It’s the most clear signal to NO strategy.
Yahoo didn’t die from a bad bet. They died from pulling every straw they can get their hands on, because every straw looks like the last straw to a drowning person.
The Takeaway
Strategy is a series of trade-offs.
- WHO (SERVE and WON’T SERVE)
- WHAT (IS and ISN’T)
- HOW (DO and WON’T DO)
Later, we will talk about how to make our own best-effort guess at GOOD versus BAD stragegy. But for now, at least you know if it’s BS when you hear someone talk about strategy (when it’s not). You are welcome.
M.Ma
References
- Rumelt, Richard. Good Strategy Bad Strategy: The Difference and Why It Matters. Crown Business, 2011.
- Isaacson, Walter. Steve Jobs. Simon & Schuster, 2011.
- “How Steve Jobs Saved Apple.” Inc., 2018.
- “Nokia’s Market Share History.” Statista.
- Elop, Stephen. “Burning Platform Memo.” Nokia internal memo, February 2011.
- “Microsoft’s $44.6 Billion Bid for Yahoo.” The New York Times, February 2008.
- “Yahoo Acquires Tumblr for $1.1 Billion.” The Verge, May 2013.
- “Verizon Acquires Yahoo for $4.83 Billion.” TechCrunch, July 2016.
el psy congroo