Startup Strategy Metaphors

· business, gtm

Common mental models in founder/VC circles. Like "moat" and "wedge" — conceptual tools for thinking about building companies.

The Concepts

Wedge — Start narrow, expand from foothold. How you compete with incumbents: find a use case they're ignoring, dominate it, then expand. (Books → everything for Amazon; dev team chat → all company comms for Slack.)

Moat — Defensibility once you're in. Wedge is how you get in; moat is what keeps others out.

Flywheel — Self-reinforcing loop where each part accelerates the others. Amazon's: lower prices → more customers → more sellers → better selection → lower prices. Unlike one-time wins, flywheels get stronger with every turn.

Cold start problem — Chicken-and-egg for platforms. Uber needs drivers to attract riders, but riders to attract drivers. How you solve this often determines whether a network business works at all.

Escape velocity — Enough momentum that gravity (competition, churn, market forces) can't pull you back. Before: vulnerable. After: breathing room.

Bundling/unbundling cycle — Markets oscillate. Incumbents bundle; startups unbundle by doing one thing better. Winner starts bundling again. (Craigslist → unbundled into Airbnb, Indeed, Tinder, etc.)

Favorites (resonated most)

Aggregation theory (Ben Thompson) — In digital markets, whoever owns the customer relationship aggregates supply. Google aggregates websites, Spotify aggregates music. Suppliers compete to be on the platform; the aggregator has the power.

Earned secrets (Peter Thiel) — Insights you can only get through direct experience, not research. The best startup ideas come from secrets you've earned — something you know that others don't because you've lived it.

Default alive vs default dead (Paul Graham) — If you maintain current trajectory, will you survive to profitability or run out of money? Simple question, but founders often avoid doing the math.

Related

References

  • Ben Thompson's Stratechery for Aggregation Theory
  • Peter Thiel's "Zero to One" for Earned Secrets
  • Paul Graham's essays for Default Alive/Dead