Lately, I have been advising a diverse group of founders and executives in different-sized companies, from pre-seed startups to corporate tech platforms. Yet, I am consistently surprised at the lack of Vision, Mission, Strategy, herby termed VMS, of many of them.

My initial thought is that this is the outcome of an incorrect adoption of the Lean Start-up Methodology, of which I am a true believer. Iteration, KPI’s and user focus mean nothing if you are going in the wrong direction, like the famous Dad quote, “I don’t know where we’re going, but we’re making good time”. VMS is often something added to the existing activities at the end to “show investors” or “get more headcount.” While it should be the logic of why we do any activity. It is a critical tool, not a buzzword.

Why do we need VMS?

1. Why are we here? Clear VMS answers why this company exists, why it’s important, why an employee should join it, or why an investor should support it. It helps filter out the wrong employees or investors. The first question I ask PMs or Founders is why this product or company exists and what the future looks like if it is successful. I am extremely surprised by how often I get no answer or a super tactical answer like “because Amazon is doing it” or “because we have XYZ features.”
2. Communication and alignment – a clear VMS is a rallying cry for your employees, customers, partners, and investors. It should make it evident as to why we are doing (or not doing) specific things and connect all parts of the company, internal and external, around a set of objectives. There is nothing more powerful than a well-aligned team pulling in the same direction. It is a superpower great companies with clear VMS have.
3. Priorities and decision making – clarity of VMS is the tool for leaders to make decisions. Assuming you have hired great people and your company is doing well, you will be bombarded with constant prioritization decisions. Rarely do decisions between a great idea or a stupid idea reach a leader – usually those are obvious and decided lower down. Since your team is innovative, intelligent, and experienced, you need to decide between two great ideas, both brilliant and logical. What is the tool you use to make these decisions? VMS should be the tool – “which idea is better aligned with our VMS and gets us where we need to go?”. This also helps communicate the decision to the disappointed faction objectively; without it, it always seems like a decision based on personalities and not logic.
4. Saying No – most of our role as leaders is to say no to 98% of the opportunities we encounter to stay focused on the right path. VMS defines the path and helps explain why we are saying no, since this opportunity is a deviation from that path.

Real VMS work is hard and polarizing and thus should be defined before any activity is undertaken. Like all things leadership-related, it requires courage, clarity, and discipline and will exclude people, customers, partners, features, and initiatives that will upset many people. Great companies are not built on consensus and are not suitable for everyone, nor do they try to satisfy everyone. You, the leader, need a framework for exclusion, as well as inclusion, and VMS is just that.

There has been much written about VMS, but I wanted to share my framework for approaching it. This framework can be applied to any product, business unit, company, or startup. I will describe it via three companies I led:

Vision – How will the future be better/different, and why should we strive to make that change? What is the change we want to help bring about, and why

Successful companies have a unique view of the future that is different from today’s reality. They “see” a future others don’t and thus are building for that future. This future will make a dramatic difference vs. the current status quo, and we should strive to help make it happen. It usually includes a disruption of the current status quo or the culmination of unique trends we are seeing today. I liked how Travis described Uber – “transportation as cheap and reliable as running water” – many things can change in that world, from our homes (no Kitchen or Garage) to where we work and how we get around. Great companies’ vision never changes. It expands in granularity as you learn more, but your reason for being is an immovable foundation unless you are “pivoting” and building a different company.

My first company was deltathree, one of the first VoIP companies founded in 1996, and we had no vision. We would write something for fundraising or our S-1, but we did not have a view of the future or how it could look with phone calls basically going free. Our logic was simplistic – today it costs several dollars to make a phone call, with VoIP, it will be several cents. This simplistic view of the future led to a lack of awareness of who we are and thus, every opportunity was great. We were constantly chasing opportunities and pivoting around, following the new and shiny thing.

Intercast Networks had a vibrant vision. Since storage cost was dropping much faster than networking, we imagined a future with unlimited, free storage on every device. We built a system to leverage that, offering users access to unlimited content pre-positioned on their devices. This vision was elaborate but wrong for many reasons, and the most important lesson I learned was “never bet against the internet” – the cost of bandwidth fell much faster and everything moved to the cloud. Today we can stream anything we want without needing any storage on the device. Our technology was elegant, but we were just wrong.

Waze has a detailed vision of what the world would look like if there were no traffic. Traffic is terrible for our health, the environment, the economy, and our quality of life. With fewer cars on the road, we could repurpose car-related real estate for human purposes; we could spend the time we save with our loved ones, making more money, or finally working out (as if…). This vision guided our mission to reach it.

Mission – what is our company’s role in making this vision happen.

Rarely is a grand vision of the outcome of one company’s activities but rather many different changes from different actors in the space? The mission is your company’s role in this change. A mission shouldn’t change, since it is our role in bringing on the change we described in the vision. It changes when you accomplish it, it can expand as you go into new areas or the world changes, but it must be super rigid and the company mantra that every employee can recite if woken up in the middle of the night.

Since we had no vision or mission at deltathree – we kept jumping back and forth between different ideas, features, opportunities, or market segments without becoming a leader in any of them. We did wholesale VoIP traffic, which we sold to large telecoms on price. We offered consumers prepaid calling cards and a PC-based app to make international calls at a cheap rate. We offered virtual phone lines to replace the traditional landlines. We partnered with many different companies (Panasonic, Verizon) on building white-label, co-branded, or wholesale services. We dabbled in SMB’s, Enterprises, direct and indirect consumer sales. We had no north star and never said no to anything. Thus we never became a winner in any category.

At Intercast, our mission was to pre-populate consumer storage devices with content. Unfortunately, this mission assumed a future vision that was wrong, and thus our role in making it happen was misguided. You cannot succeed in your Mission if your Vision is just wrong.

At Waze, our initial Mission was “Outsmarting Traffic, Together.” Our contribution to a world without traffic was to help our users circumvent traffic using less traveled roads in non-intuitive ways to save them time. We optimized the physical road network to achieve maximum throughput for our users. This mission worked when we were small, but as we grew to own significant market share, we began impacting traffic ourselves and thus expanded our mission to “Eliminating traffic, Altogether.” Since we ran out of excess road capacity to optimize, we needed to remove cars from the road to see our vision to fruition. Thus, we focused on optimizing the excess capacity within the cars via Carpool. If we could convince users who live close to each other and work close to each other to Carpool, one day I drive you, one day you drive me (and in the future, a Robot drives us both), we have taken cars off the road without needing additional infrastructure investments – the empty seats are there, just fill them up. Fewer cars, more throughput, less traffic.

Strategy is what we need to do, at this point, to achieve our mission.

To me, Strategy is best reflected in an uber KPI or North Star – a key objective that if it moves, we are making progress on our mission. The strategy must consider our reality at this point, our capabilities, constraints, assets, weaknesses, and focus everything we have on that one KPI that matters. The strategy should change at the “right” pace and when new data arrives. It changes by what we learn but since it is the “glue” holding together our different activities, something significant needs to happen to justify a change since the cost of the change is significant: alignment, communications, spinning up and down activities, mindset, etc. By the way, something significant is not December 31st. Many companies review their strategy as part of annual planning – the fact that the year has ended does not mean that your strategy needs to be reviewed but rather new data or market dynamics should trigger it.

At deltathree, since we have no Vision or Mission, our strategy changed daily by whatever I had just read, a meeting I just took, something a competitor did, or an opportunity that presented itself. My lack of discipline and clarity here led me to lurch back and forth with no clear explanation of why. I am a pretty creative guy, so I could always spin a good story on why this made sense, but the reality is that I lacked a clear vision-mission and the discipline to hold the line and think through where this gets us to. We never had a clear Uber KPI, vacillating between users, number of calls carried, revenue, margin, profitability, partnerships, number of inbound lines we sold, stock price, etc.

At Intercast, our strategy was based on the adoption of Multicast by the IP networks as the secret ingredient to push massive amounts of content to users’ personal storage. This was a strategic mistake for many reasons, but we held the line here and thus never managed to garner any significant customer or partner. We made the cardinal start-up mistake of trying to change multiple parts of an existing ecosystem and being dependent on this change to have a product/business. Startups should always strive to own their destiny and have direct access to customers. I should have evolved our strategy quickly once it became clear that carriers would not adopt multicast. We tried to do it at the end, supporting P2P and other solutions, but it was too late for the company, and regardless, since our vision was wrong, it would not have gotten us anywhere. Our KPI never evolved beyond getting a customer/partner to adopt our solution.

At Waze, our strategy was to work with our community to build maps, enabling our initial users, via gamification, to drive around and teach us historical cross times for traffic prediction and offering a free app (all navigation was paid then) to distribute to the end-user who’s the usage of the app would create real-time traffic. However, when Google came out with Google maps, a much better service than ours AND free, we had to change our strategy, focusing much more on the everyday commute (vs. navigation to unknown destinations), expanding globally, and doubling down on social and gamification differentiators.

Our first big strategy change was in our monetization model. Initially, we thought we would build “cheap” maps with our community and monetize them by selling the data to companies overcharged by the then duopoly of Navteq/Nokia and TeleAtlas/Tomtom. We learned the hard way (after selling a few maps) that the companies we wanted to sell maps to were the ones we were disrupting (navigation software) and that their sales process had tremendous incumbent lock-in (RFP’s asked for the attributes the incumbents had, and we did not, even if they were not needed). So we changed our monetization strategy to advertising, where our incentives were better aligned with our users: better app, more usage, more data, more ads, more revenue. Our uber KPI of driven Km’s represented our business – the more km’s were driven, the more data we collected, the better the service was, the more ads we could show, and the more revenue we could collect. The most significant expansion of our strategy was driven by our mission change to “Eliminate Traffic, Altogether,” which led to the strategy of launching a Carpooling service built for our existing users to help take cars off the road.

The day-to-day tactics are where we need to be the most flexible, move fast, experiment, and break things.

The success of these tactics is measured against the progress they deliver on our strategy and uber KPIs and should iterate quickly as you learn. There is much written on tactics in the Lean Start-up methodology. Still, even if you are extremely good at tactics but are not pulling in the same or correct direction – the company will usually not become a category leader. When we look back at the original investment decks of Waze’s A round until today, very little changed in our Vision and Mission, some changes in strategy and LOTS of changes in tactics. This seems to be the case in many different successful companies.

The most important thing to remember is clarity. Knowing (which means having written it down and shared) what your VMS is, minimizing changes, and clearly understanding the stage you are in vis-a-vis the company’s evolution is key to prioritization and focus, the two ingredients of success.

So what do you do now?

My suggestion is to write a long document on the future state, your role in getting there, and your strategy for achieving it. This doc is a “brain dump” of everything you know, heard, researched, and brought you to your conclusions. This doc is additional reading material for everyone. Then summarize the VMS in as few words as possible. This is the rallying cry and needs to be super concise, clear, and straightforward. Minimize big words or industry buzzwords. Less is more.

Now that you have it, every all-hands, investor presentation, customer deck needs to start with a quick reciting of the mantra. Every new employee gets it (plus the long document) to understand where you are going and why.

Side comment – in my experience, the best investors will start their discussion with you about your vision. They are asking themselves, “assuming they can get there, is this a big enough change that is worth my time and will yield the returns I need.” If the answer is no, then what does it matter if you can get there? If the answer is yes, now let’s discuss if THIS team and THIS approach can get there.

When I look back at my evolution as a leader, one of the most significant growth areas for me was how to manage/balance Vision-Mission-Strategy-Tactics: how to correctly navigate the micro tactics of today and the grand vision of 10 years from now. I am still learning and far from an expert, but I feel that this is one of the biggest challenges of leaders, especially in start-ups. A day can start with an investor pitch where you promise the world and explain how you will transform it, to a meeting on which messaging protocol we should adopt, balancing what we have, and what our cloud provider can offer and other engineering priorities. Moving seamlessly and quickly between Vision and Tactics, executing well on the right things, aligning the whole company on a vision and mission that are durable enough to withstand reality as it unfolds, holding the line on where we are going but changing quickly on how we get there. This is one of the many challenges in which leaders need to excel. It only took me three companies, 25 years, and many millions of dollars burned to get a rudimentary understanding of this. I hope this helps you do it faster, cheaper, and with less heartache.

A great example of what happens when you develop products with no strategy but lots of money:

https://arstechnica.com/gadgets/2021/08/a-decade-and-a-half-of-instability-the-history-of-google-messaging-apps/