What’s more important than culture and strategy?

If culture eats strategy for breakfast, what’s eats culture?

You've probably heard this one before: "Culture eats strategy for breakfast” or maybe you read recent Sheikh Mohammed’s book and his "Execution trumps strategy, anytime" resonated with you.

Both sound wise, both get quoted at every other startup conference. But here's the thing – there's something that eats them all:

👉 Market + Timing + Business Model

That's the holy trinity that can make you successful despite everything else.

Let me be a bit controversial here: some of the most successful companies achieved their position despite their culture, not because of it.

Do you think Google became 2 trillion dollars company because of their famous Fridays for creative/non-daily work? or because they work with OKRs? Their incredible hiring process?

Nope. They won because they had the right business model (ads), in the right market (internet/search), at the right time (early 2000s internet boom) and dominated that market and eventually became a monopoly.

Market

You want to operate in a market that will eventually be big and growing.

You can start with small market but easily expandable one, ideally growing fast.

• Small - low entry barriers, low or non-serious competition

• Expandable - market of selling books online is a perfect example. You can easily expand category by category to e-commerce with everything. (case: Amazon)

• Growing - cuz you want to ride the wave. You want to grow not only because of your efforts (your sales, your marketing) but because the market itself grows. If your market is growing 20% and you are #1 in the space, it will be hard not to grow at least those 20% without doing much.

Timing

You don’t want to be too early and you don’t want to be too late to the party.

You need to be just in time. Sometimes it’s more an art, than a science.

• Being too early - you will need to invest a lot of time and money into educating the market. There is a chance you will run out of money until “it’s the right time”.

• Being too late - first mover advantage is real. If the market already becames highly competitive (red-ocean) - margins eventually go to zero.

Business model

This is the one you control the most and the one you can screw it the most.

What are the biggest enterprises in the world? Governments.

What is their business model? It's not SaaS, It’s taxes.

And that’s exactly what you want to do. You want to tax entire industries and all companies that operate within them.

• Stripe = tax on online payments

• Shopify = tax on e-commerce

• AWS / GCP = tax on Cloud

Or to be more specific, and less metaphoric, you want to tax industries by building infrastructure for other companies. Infrastructure that enables them to do the dirty part. You know: hiring, scaling, sales, customer service, going international etc.

Still think I'm being too theoretical? Let me give you a real example from my little company LiveKid.com. It’s all-in-one management system for daycares. We operate in >3000 daycares, serving 500 000 parents and doing around $5m in ARR.

We use a payment provider (like Stripe) that makes around $500,000 by giving us a payment gateway so parents can pay tuition through the app. Want to know what groundbreaking strategy they implemented to generate that half a million dollars revenue? Nothing. Literally nothing. We came to them 5 years ago because they were one of only 4 providers offering local payment methods. They signed the agreement, gave us documentation and that’s it. Then, their revenue grew from peanuts to $10k/year, $100k/year and eventually $500k/year from our partnership as our business grew. We did all the dirty work, of building our app, hiring a bunch of people to educate the market and then acquire, onboard and retain end customers.

That's the power of:

• Being an infrastructure business (taxes)

• Attaching yourself to clients (companies) who operate in growing markets and/or grow their business quickly

Don’t get me wrong: it’s not easy to build a payment provider business. But it’s not easy to build any good business.

Wrap up

This isn't some complex strategy that needs 50 slides of PowerPoint presentation.

So here are two actionable tips from this post for you:

1. Choose your market wisely. Don't screw up the business model, and try to time it right. I promise you – it's much more important than your Notion-based internal wikipedia or that fancy remote-first culture you're building.

2. When looking at successful companies for inspiration, look at what they did when they were building their success, not what they're doing now. Trust me, their culture looked way different when they were capturing their market share versus now, when they're featured in "Best Places to Work" lists.

Of course, having a great culture, strong execution, and solid strategy won't hurt. But if you have to choose what to optimize for – start with the trinity.

You can figure out the rest along the way.

JP

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Let me know in the comments if you think I'm completely wrong. I actually enjoy good arguments in the comments!