Saturday, July 30, 2011

Have You Created a Citadel for Your Startup?

By Bob La Loggia, CEO StormSource Software

Business is often compared to war and waging battle with enemies. Indeed, Sun Tzu’s “The Art of War” is one of the most popular business books ever written, and it was originally written as a military strategy guide. Battle terminology has been a mainstay in the business lexicon for decades. The list of war references used in business is almost endless, from “gathering the troops” to “losing a battle but winning the war.”

One battle concept that has enduring applicability is that of creating a citadel. A citadel is a fortress in a commanding position in a city. The purpose of a citadel is to provide defense for a city. Citadels are fortified, meaning they have the firepower to fight off enemies. When a citadel is built, a city is preparing itself for a battle.

In today’s competitive business environment, where barriers to entry seem to be crumbling before our eyes, creating your citadel is more important than ever. But, erecting a citadel goes way beyond just creating barriers to entry. Developing a citadel involves the following:

  • Creating a battle-ready infrastructure. Michael Gerber’s must-read book on starting a business, “The E-Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It,” talks about working "on" the business instead of "in" the business.

    It’s a bit counterintuitive, but by focusing on creating a rock-solid infrastructure, whereby all processes are sharpened, documented and turnkey, you are developing a foundation that will allow your business to expand swiftly. You are also developing a key to business success that is rarely talked about: transforming new recruits into productive warriors quickly.

  • Developing a proven, but flexible business model. Your business model is the structure that supports your strategic plan. Your business model is how you get customers, grow and make money. The paradox of a business model is not that you have to continue to tweak it until you reach perfection, but you have to continue to remain willing to adjust it constantly based on customer and market information.

    Ideally, you’ll end up with a core, proven model that you adjust along the fringes on a real-time basis. It’s the same mindset used in planning a citadel. You hone and execute your core strategy, then adjust some of the details as you gather information on the enemy, the elements, and other pertinent information.

  • Building a reputation. The most effective citadels are never used. They are built as a protective measure. They say, “We are here and ready to fight. We won’t back down from any battle.”

    When citadels are constructed effectively, enemies usually move on to fight less-formidable opponents. When you build a reputation as an authority in your segment, a juggernaut that won’t let up, and a company that will defend what it has to the death, competitors will think twice about attacking.

Yes, citadels are fortresses. They are bastions of your business. Your citadel is your protection from the competition. Creating barriers to entry is important, but creating a strong infrastructure, having a proven business model, and establishing an impenetrable reputation will help ensure any would-be adversaries take their fight elsewhere.

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Today’s guest post is by Bob La Loggia, who is the founder and CEO of StormSource Software, the source of Appointment-Plus online scheduling software. He is a veteran of four startups, has over 22 years in technology, and has built several citadels. You can contact him directly through his website or email.


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4 comments:

  1. Great post! Great advice Thanks Martin!

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  2. That's nice metaphor and I believe it's adequate on the later stages of startup growth. However in today's world it isn't the only approach and it won't be optimal in many cases. Why? Citadel means a two-way isolation and even more it blocks both positive and negative factors. Mostly because it complicates communication with the world and shifts focus&resources to 'threats' and 'enemies'. As a result identifying and using opportunities becomes more difficult. Living in a fortress reduces flexibility and ability to pivot which seems to be critical for a startup. That's why I'd suggest building a semipermeable membrane around the company instead of cold stone walls and even colder moat.

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  3. Building the company this way is the goal for sure, just need that user/customer feedback to develop the right type of Citadel for the environment. Would probably make for a higher valued takeover target as well.
    As always, thanks Marty!
    TonightFights

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