This time, we’re speaking to Alan Smith, Co-Founder of Strategyzer. Strategyzer builds practical tools to help businesses understand customers, design better value propositions, and find the right business model. Their Business Model Canvas and Value Proposition Canvas make it easy to rapidly sketch business model ideas and their tools allow you to easily work together with your team, clients, partners or board. Since 2011, they have sold over 2 million books and have more than 1 million users on their platform.
Alan believes great tools give us the confidence to dream big. He’s obsessed with design and business and works to make fundamental business challenges easier with the inspired team at Strategyzer.
Tell us a bit more about Strategyzer.
One of the main things we do is try to remove confusion and misalignment around some of the most important business topics, e.g. what’s your business model? What’s your value proposition? How do you know if the choices you make on one of those things is actually correct? We aren’t a service organization so we don’t answer these questions ourselves. Instead, we create paper and software tools for companies to execute their strategy and deliver them through really great online and in-person learning experiences.
How did Strategyzer get started?
I was running a design agency and was struggling with some of the finer points of how to run a business, especially in the time before things were scaling. I come from a design background, not from a business background, and I was really struggling with everything outside of the product and the service. As designers, we were able to think through what the customers’ problems were and come up with great solutions, but we were failing to answer questions like, how do we acquire customers? What are we really charging them for? What’s the mechanism by which we’re charging them? How do we manage all of the behind-the-scenes work? And does that all add up to a profit or revenue or not? Despite all of the good work we were doing, we were failing in terms of creating business engines that could really run and aligning people internally around them. I started thinking, how can we do better? How can I learn more about the stuff that I’m missing?
I got introduced Alexander Osterwalder (co-founder of Strategyzer) and the Business Model Canvas and as soon as I saw it, I knew that it was the missing piece of the puzzle for me. When Alex and I started talking, we realized we had the potential for an awesome exchange because he was interested in learning more about design and I was interested in learning more about business. From there, we started working on a book together called Business Model Generation which was launched in late 2009. We had such a great time working on that project and the response was really, really strong. People seem to love the book and that showed us there was a lot of value in the business model generation idea, so that’s where Strategyzer came from. The company was launched in 2011, so we’ve been doing it for around eight years now.
Can you tell us a bit about how you and Alex define your roles within the company?
That’s been an ongoing process. When we started out, we were both trying to make everything happen. As we’ve grown, we’ve seen an increasing need for separation between our roles, both for ourselves and for the sake of the team so they know who to approach on particular issues. We believe in trying to focus on the things that we’re best at and not trying to be perfect people by filling in all our weaknesses. Alex is an incredible educator, public speaker, and a really clear, visual thinker. He’s not a designer, but he could easily have been one in a previous lifetime. He does a lot of the work out front with clients helping them understand the value of our products before they buy into one of the programs. He creates a lot of the content by distilling ideas and making them really simple. Communicating those ideas internally as well is a big part of his role. The role that I handle is more around product development but it also overlaps with the marketing and communications side of things—trying to define how we build stuff and how we make sure it’s all crystal clear, beautifully designed, and communicative. Making sure the tools and all of our products embody simple, visual, and practical designs and that we’re communicating their So that’s how our roles are defined. You might notice there’s a big gap around operations. We’re at the point where we’re looking at bringing someone in to bridge that gap.
What are some of the most pressing challenges facing Strategyzer at the moment?
I sometimes ask people, if you had to get a piece of advice tattooed on you so whenever you’re in a tricky situation, you can look down at the tattoo and know what to do, what would it say? Something that I got from my friend Wayne Chamberlain is “most problems are people problems and most people problems are communication problems.” So anything to do with people and communication—which is almost everything—has always been the most pressing issue for us. I see it more and more every day as the company grows and we add more people. One of the biggest issues is around alignment, getting people pointed in the right direction. How do we clearly communicate where we want to go and who’s doing what? There’s also the problem of actually achieving that alignment. Life makes us less aligned, that’s just entropy. Your room doesn’t clean itself, it gets dirtier. And the same thing happens with alignment, you create alignment, and then alignment dissipates and you need to realign. It’s an issue I don’t necessarily see going away anytime soon. It’s just one of those things you constantly need to chip away at. Attached to the idea of alignment is silos. As the company grows, you start to get these silos forming. I don’t even know how it happens because we’re super collaborative. But once people start to focus and a lack of alignment happens, that’s when silos start building up. Those are two big communication problems.
Most problems are people problems and most people problems are communication problems
Another issue is with prioritization. It’s really easy to look at a list of things and say “which one should we do first? What’s the most important thing we can be doing right now?” Should the sales team work on getting the pipeline cleaned up? Mine existing clients for follow-up business? Create a better CRM? Build better sales collateral? Those are all great things that we definitely need to do, but which one comes first? Prioritizing at every single level, from the company to the team to the individual, is incredibly hard.
The last issue is more specific to us—we’re currently doing a market shift. We started off selling to everyone. We sold 2 million copies of our books, so a lot of people from Fortune 500 companies down to start-ups and individual consultants had an interest in what we were doing. But while we started with a more generic offering that was bought by people from everywhere, we decided to go up-market and focus on enterprise-level. Making the shift from a company that’s selling generally self-serve products at a lower price point to enterprise-sold-and-supported products at a higher price point is a huge challenge as far as the infrastructure that’s required behind the scenes is concerned. The value proposition changes, the customer segment changes, the way that we charge customers changes, customer relationships and how we acquire them changes—everything about the business model and value proposition changes when you go up-market. It’s actually really, really hard so that’s a big issue for us right now.
You have a large remote workforce, how do you go about managing that?
We’ve got a remote team who spans the globe from Oceania, Europe, and North America. This creates a lot of challenges compared to working together in an office each day, especially when it comes to communication and collaboration. The default can really be miscommunication, and silo-building without even more active efforts to stay aligned. We’ve got a few techniques to try and combat this. We’ve adopted a daily stand-up that we do remotely every day at 10 am (4 pm in Europe). Some of the people who work in Australia or Asia can’t necessarily join, but then they end up having their own stand-up at a different time. We’ve also got a kind of virtual stand-up, which is basically just a Slack channel where people will share their bullet points for the day—typically two to five tasks that you’re working on or meetings that you have. It’s a pretty classic Agile project management concept whereby, if you share what you’re doing and other people see it, there’s more chance they might notice that they’re working on something similar or that it’ll affect them later. There’s a whole bunch of good things that come from the idea of the stand-up.
We use Objectives and Key Results but I think everyone struggles with them. I haven’t talked to a single person in operations who feels like they have a really spotless OKR implementation. We’ve been at it for over two years and we’re still not there. Part of it is new people coming in and not really knowing what a well-formed OKR looks like. It can be difficult to separate the questions around where we’re trying to go, how we’ll get there, and how we’ll know if we’re on the right track. It’s easier to get people to answer those questions all together, but it’s more difficult to separate them out. But in separating them, people tend to get a lot more clarity on what’s actually going on. We find even the exercise of just going through OKRs to be really valuable.
It can be difficult to separate the questions around where we’re trying to go, how we’ll get there, and how we’ll know if we’re on the right track.
The other thing we do is a ton of asynchronous videos. We’ll do screen shares or recordings and say, “here’s something I’ve learned on this call with this client—this is the client and this is the insight” and post them to Slack. We have a special channel called “Client Evidence” where we share that stuff. If it’s a product team, or a team that’s building stuff, they’ll share demos and the sales and marketing team try to do updates at a little bit higher level of granularity than they showed in their daily stand-up. Something as simple as saying, “here’s the context, here’s what we did, here’s what we were hoping would happen, and here’s what actually happened” generates so much empathy for other team members. It helps to create transparency and we’ve found that to be really powerful.
One area we’re trying to improve upon is accountability. When things don’t go well, what do we do? This is one area where I don’t think we’re a model organization. At times, we set targets so high that it’s obvious we were never going to hit them. When that happens, it makes no sense to “punish” anyone for that. And do we want to lead an organization that’s fear-driven anyway? That’s not really our style. But if we set the targets low enough and people still don’t hit them, then what kind of conversations do we need to have? This is an area where we’re really trying to mature and do better.
As far as other management stuff goes, we have a very loose management structure that we base on Holacracy principles. We try to keep things pretty flat and we have a driver team that meets once a week does a classic Level 10 Meeting—if any of your readers are familiar with Traction, Mastering the Rockefeller Habits, or Scaling Up, we’ve pulled in a lot of little things from those books.
When it comes to your operations, what are some of the more specific pain points and how are you dealing with them?
I just mentioned accountability and obviously that’s a big one. As for how we’re planning to tackle that problem? I actually don’t know, I don’t have a good answer for that. I’m pushing that one off a little bit. Reporting structure inside a company that’s largely flat is something that we’re trying to address currently. We keep going back to our original implementation of Holacracy and seeing what worked for us and what didn’t, what are some of the best practices that maybe we missed or didn’t know about at the time. We ask ourselves, if we were to re-implement this today, what would we do differently? And then go from there.
After that, the idea of who’s managing who and how do we give and receive feedback is a big one. Something that we’ve implemented and are playing around with right now is career growth. Oftentimes in a traditional organization, a manager will be in charge of career growth for a team member. We believe in leadership by engagement—if you can get people excited about what’s going on around you, then maybe you’re the right person to lead a particular team. Does that mean you should be doing all the management work and managing your team members’ career paths? Maybe, maybe not. To help out with that, we’ve implemented something called Stakeholder Centered Coaching by Marshall Goldsmith which is based around the idea that, to be a better collaborator and to be more effective within the company, the people who can help us most with that are other people in the company. They know when things aren’t working and when we are not being as effective as we should be. With Stakeholder Centered Coaching, you gather input from a group of internal stakeholders and work with an internal coaching advisor to figure out what things you’re going to try to improve on and what behaviours you’re looking to change. You need to measure your progress every month—if these were the things you set out to do, did anyone notice? If nobody noticed, then you probably didn’t do it right. Stakeholder Centered Coaching has been really powerful for us, not necessarily for career growth, but certainly from a personal development perspective.
We believe in leadership by engagement—if you can get people excited about what’s going on around you, then maybe you’re the right person to lead a particular team.
Onboarding is really hard as companies grow so that’s something we’re working on a lot. We’re trying to understand what a really great first one hundred days at Strategyzer looks like. What does the first 10 minutes at work look like? Do they have a desk? A computer? Somebody to say hi to them? When you’re working remotely, these things can be even harder. We’re really paying attention to the onboarding experience rather than just hoping it’s all going to work out when they show up at the office. As well as that, we’re looking at how we onboard new customers. We are looking to implement some techniques from Joey Coleman’s excellent book, Never Lose a Customer Again. Being really intentional about onboarding new employees and new customers is important to us.
You spoke earlier about possibly bringing on some type of operational role or roles. What do you see that looking like?
The idea of a COO can mean different things to different companies. With me being focused on the product side of the business and Alex being focused on the client-facing side, we need someone who can help us with the actual running of the business. We’re hoping that a COO is going to be able to implement some sort of system for accountability that really feels in line with our cultural values and not just something out of a book that doesn’t really connect with us. Giving our team members more access to someone who’s really plugged into both the strategy and the operations and can act as a single point of contact when Alex is on the road working with clients or when I’m in the middle of a project with a product team would be really valuable. It would also give Alex and I the bandwidth to do what we’re good at. We also see the COO as being someone to bridge the different silos. Up until now, it’s been up to me and Alex to connect all the dots but as we end up being more focused in our individual areas, we need someone who’s more involved in operations to help out with that. We also see them working with us to improve our processes around alignment and communication. Many of those processes are very unloved here and don’t necessarily get the number of iterations or attention they need to get better. Alex and I just don’t have time to dedicate to improving them and it’s not necessarily our area of expertise. Those are a few of the things we’re hoping to solve by bringing on a COO.
What’s the most powerful lesson that you’ve learned as an entrepreneur so far?
The first lesson I learned—and the lesson is simple—is don’t take things too personally. I’ll give you an example—we started out by producing the book, which gained a lot of traction. From there, we built an iPad app, which also did really well, and that gave us the cash to bootstrap, build a web app, and start to build out our platform. We were working with an outside agency since it was just Alex and me at the company at that point, and we were so far over budget. We were burning a ton of cash. We were really pushing to get this product out the door and I remember thinking, “this all rests on me right now”. I ended up working myself into the ground. I missed Thanksgiving with my family, and I ended up getting really sick. My immune system was so beaten down from all the stress, I got pneumonia and was laid up for three weeks or so. Pneumonia is garbage, never get pneumonia! It was absolute misery. I realized I took it too personally. I had made it all about me and my need to make this thing happen and it totally knocked me on my ass. If you don’t have your health, you don’t have your life and you don’t have your business. You can’t contribute to either one.
If you don’t have your health, you don’t have your life and you don’t have your business. You can’t contribute to either one.
Taking that same lesson further into later years, I used to get really bummed out whenever anybody quit the company. I always thought that meant we weren’t good enough. I’ve heard some entrepreneurs say that every time someone leaves, it’s like you’re getting fired as a leader. Over time, I’ve realized it’s actually not about that at all—it’s simply the case that the fit between a person and the organization is wrong. Maybe there were some things you could have done better, but learn from that and don’t take it personally. Since learning that lesson, I’ve been in much better health. I get bummed out less often. I still don’t love it when people leave the company, but now at least I understand.
How do you manage to keep things in check and make sure that you have a healthy work-life balance?
For me, it was almost like a light switch flipped on. It’s not even about tactics that I implement every day so much as it is about having an entire perspective change. From the time I got pneumonia onward, I’ve just felt differently about things. I learned that I was viewing things the wrong way and found a new perspective. I’ve been fortunate that I got that insight and it really stuck with me.
Something that’s really helped me is more integration between work and life rather than trying to find a balance between the two. Being able to work with people I really like, in places that I really like, on stuff that I’m excited about gives me a lot of personal value and social value beyond just the work itself.
What’s the best part about being an entrepreneur?
I think it’s the freedom. Freedom over your schedule, freedom over what you want to work on, and freedom in your career path. I should also point out that it’s only freedom if you recognize that you have it. A lot of people tend too get bogged down and handcuffed by their business, rather than realizing how freeing it can actually be. For me, there’s nothing better than being able to work on something we’re excited about and to see it come to life.
When people start a business, they’re often told, “don’t get a partner, it’s a bad idea”. What are your thoughts on that?
A guy named Jeff Goldberg broke it down for me—if you believe that bringing in a co-founder is going to double your chances of success, then why wouldn’t you go for it? I agree with that 100% but I think it only works if you have really incredible working chemistry. If you don’t have chemistry, you end up working against each other. Alex and I had such a great experience working together on Business Model Generation that we knew we could work together. For us, it wasn’t a huge gamble to work together on another project. I also had a partner named Patrick Keenan in my previous business, The Movement, and we had very complementary skill sets. I think having complementary skill sets can be very beneficial for a co-founder led team. I don’t know of that many co-founders or partners in business who have exactly the same profile.
I once heard that the army is really big on pairing people together and making sure that you always have a team because, when the going gets tough, you’ll fight harder for the person beside you than you will for yourself.
Being an entrepreneur is a tiring journey so having someone there who’s supportive and inspiring and makes you want to do your best work and pull for them is so valuable. I once heard that the army is really big on pairing people together and making sure that you always have a team because, when the going gets tough, you’ll fight harder for the person beside you than you will for yourself. That’s always been the case for me and my relationship with my partners.
What are some of the tools you use to inspire you or to make your life easier?
What brought me to this business in the first place and what helped me get to the next level in business was the Business Model Canvas. Having the Canvas and mapping out the whole business model on one piece of paper—and being able to do that for our business early on—was something that helped me a lot. We still use it all the time internally. After the Business Model Canvas, the Value Proposition Canvas is our second tool. Again, it’s a really strategic tool. If the Business Model Canvas helps you figure out how to create value for your business, the Value Proposition Canvas helps you figure out how to create value for your customer. Both tools feed into each other and help to create alignment and clarity between people internally.
Coming from a design background, you understand the idea of user testing and usability testing but questioning whether this is something people want in the first place is something totally different. That was always happening upstream from the design department so we didn’t think to ask that question. A lot of business owners don’t think to ask that question, especially when they’re launching something. One thing we learned from Eric Ries’s book, The Lean Startup, was to break down any type of business decisions we were making into their component parts, which are hypotheses, and then figure out whether or not those hypotheses are actually solid. We just finished producing our third book, Testing Business Ideas which delves further into this topic and tries to make it more of a methodology. It is heavily inspired by the work of Eric Ries and Steve Blank. They’ve honed in on a few big problems and have created a pretty good program for people to follow and take a bite out of each of those problems. I don’t find their methodology perfect but I find it very helpful.
In terms of books, I mentioned Mastering the Rockefeller Habits and Scaling Up earlier as being worthwhile reads and, in terms of OKRs, John Doerr’s new book Measure What Matters is really great. When it comes to podcasts, I tend to listen to things that are more inspirational and I listen to people’s stories. How I Built This with Guy Raz is a really great podcast where founders of businesses tell their whole story from beginning to end. They’re usually a person with some interesting viewpoints and the decisions they made tell you a lot about them. There are usually one or two ideas that mirror some of the challenges that we’re solving so I find it entertaining and really useful from a business perspective.
This goes back to tools, but we’ve started doing a lot of personality testing like the DISC profile and the Kolbe Test. I like that stuff a lot. I think it’s really cool. What I like most about it is that these profiles really try to encourage you to understand yourself. People hate this kind of personality assessment because they think “This isn’t who I am, this isn’t me as a whole”. Of course it’s not—it’s just a tiny slice of who you are. But it acts as a mirror and if you can look at that mirror and be confident in saying, “Okay, this is part of who I am,” you can learn a lot about the type of advice and working style that will serve you better in the long run.
The thing that I’d like to end on is this—there’s so much entrepreneurial advice out there telling you what you should and shouldn’t do, but finding your own path is part of the freedom in this whole thing, and something that I would advise people to do.
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