Evolve Before
You Scale.

Why the Piano buyers asked “How?”

I have always disliked competing in a commoditized sale. Once the conversation becomes a comparison of features and prices, the customer has already made the most important strategic decision: what kind of answer they are buying. The vendor is left to justify why its version deserves the business.

At Piano, I saw a much larger conversation available.

Publishers were trying to monetize their content while the advertising model that had supported them was under pressure. Google and Facebook had captured advertising spending that publishers once depended on. A request for subscription technology was one response to that situation. Behind it sat a more consequential question: how would the publisher build a direct relationship with customers that could sustain a new revenue stream?

The distinction mattered. Selling software that satisfied a product requirement assumed the publisher already knew what it needed. Helping it build a direct-to-consumer business required us to understand what its customers valued and what they would pay for.

The point of view was simple:

“Don’t monetize your content; monetize your loyal audience.”

Content remained essential. It was how the publisher had earned attention, trust and a relationship. But a loyal audience could value more than access to the material that had attracted it. The strategic question became what else the publisher could credibly bring to those people, consistent with its brand, that they would be willing to buy.

We used a customer-centered, design thinking approach. Who was the loyal audience? What did those people value about the publisher already? What needs remained unsatisfied? Which of those needs could the publisher credibly serve? What would make the proposed offer worth paying for?

That gave the point of view a practical answer to the next question. And the next question was the revealing part.

The executives asked “How?” They did not first ask us to prove the proposition with a portfolio of previous results. They recognized their business challenge and wanted to understand the path we were offering. We were selling the existing product in service of a different business promise.

Two salespeople I coached used the reframe successfully. Within weeks of each other, they closed substantially larger contracts in Spain and Ukraine.

The buyers were committing to a different scale of business opportunity. The contract terms differ, but the commercial change is clear: a product conversation had become a conversation about the publisher’s future.

I left Piano shortly afterward. Sales subsequently returned to selling the product. Two people had demonstrated that they could use the idea; the company had not established a lasting way of operating around it.

That experience left me with two questions. What made the larger conversation possible? And what would a company have to do to make that opportunity durable?

The first led me to look beyond Piano. I saw related patterns in Salesforce, HubSpot and Gong: a challenge to an accepted way of solving a business problem, a compelling alternative, and a business built to make that alternative usable.

The second took the thinking beyond a sales reframe. A different promise changes what the company must deliver, how it earns money, which capabilities it needs, how its people work and why it should remain valuable as competitors respond.

That is the subject of this document. A good product gives a company something to build on. The strategic task is to decide what the company should become.

1. Break out before you get stuck in the middle

The trap growth can hide

Early growth can disguise a weak strategic position. Customers buy. Revenue rises. The company hires, expands the product and builds a larger operation around the same offer. Each commitment makes sense against the growth plan. Together, they make the company harder to change.

Then sales flatten. The company is too small to challenge the category leader’s reach, resources and established position. It is too big to compete like an upstart, with a lean cost base, a narrow offer and little existing business to protect.

This is the no man’s land I want companies to avoid: substantial enough to carry the costs and commitments of scale, without the advantages that make scale powerful. More selling effort pushes against the same limits. Cutting costs may buy time, but it does not give customers a stronger reason to choose the company.

Break out of the category before growth locks you into that position. Find a more consequential customer challenge, develop a distinctive answer and build the company around it while you still have room to move.

The question a company inherits

A product category gives buyers a shared language. It also hands the company a set of assumptions about the problem, the solution, the buyer, the budget and the criteria for choosing a supplier. Accept those terms without examining them and the market has made part of your strategy for you.

Those assumptions become powerful because they are rarely presented as choices. They appear as ordinary business practice. A request for proposals specifies the features. A market report names the competitors. A sales process assigns the buyer. A product roadmap answers the requests that arrive through that process.

The company can become very good at answering a question it never chose.

When sales flatten, the instinct is to add pipeline, improve conversion, build more features or change the price. Ask why those efforts should overcome the position you occupy. If buyers still see a smaller version of the leader or a more expensive version of an upstart, the company needs a different reason to be chosen.

Product-market fit establishes that people will buy an answer. It does not settle how large the opportunity is, whether the economics can improve or what will protect the business when the answer becomes easier to reproduce.

The first strategic discipline is therefore to make the inherited question visible. What does the customer believe must be done? Why does that belief seem reasonable? What alternatives does it exclude? And has the world changed enough to make a different answer practical?

The pattern I recognized

After Piano, I wanted to know whether I had experienced an unusual sale or encountered a repeatable strategic pattern. Three companies helped me formulate the pattern.

These are different moves. Salesforce’s change to delivery and economics is not the same as HubSpot’s change to marketing practice. Gong’s connection between recorded interactions and management decisions is different again. The common thread is that each made an alternative way of operating concrete.

The pattern I draw from these examples is that a powerful business can be built around changing how customers pursue an important objective. The proposition gives the change a clear meaning; the product, distribution and execution make it usable. The point of view and the business behind it have to reinforce each other.

Breaking out of a category means changing the terms on which customers choose you. Salesforce remained recognizable as CRM while changing how customers acquired and operated it. The strategic break comes from a different answer, a different way of operating or different economics. A new category name is useful when it makes that change easier to understand.

What “evolve before you scale” means

Timing is part of the strategy. As the company grows, its costs, customer commitments, product architecture and internal incentives become attached to the current answer. Waiting until sales flatten means trying to change direction when the business has more to protect and less room to experiment.

Evolve before you scale means establishing the position you intend to grow into before building the organization around it. Choose the critical customer challenge, develop the distinctive answer and establish how the company will deliver it and earn from it. Let growth strengthen that position.

There are two strategic moves in this approach. Move 1 establishes a more valuable answer to a critical business challenge. Move 2 builds the position that keeps that answer valuable as alternatives improve. They should inform each other from the beginning. A proposition that wins attention but offers no plausible durable position needs further work. So does a defensible capability attached to a problem customers do not care enough to solve.

The purpose is category leadership with economic substance: becoming a company customers turn to when an important problem must be solved, and building the operating performance and future opportunities that support exceptional enterprise value.

2. The product request is already an answer

A product request contains an assumption about the answer

When a customer asks for software, the request describes more than a need. It contains a theory of what will solve that need.

“We need a better dashboard” assumes visibility is the constraint. “We need more leads” assumes volume is the constraint. “We need a paywall” assumes access to content is the right unit to monetize. Each may be correct. Strategy begins by making the assumption available for examination.

Treat the request as the customer’s current theory of the solution. Investigate the business problem that produced it. This is how you take the customer seriously: understand the stakes well enough to question whether the proposed purchase will achieve what they need.

I work upward from the request. What is the customer trying to accomplish? What happens if it fails? Who carries that consequence? What has already been tried? Why have those efforts fallen short? At what point does the issue become material to the business rather than just inconvenient to a department?

This process can reveal several executive challenges behind one category. Revenue technology might connect to growth, forecast reliability, management effectiveness or the cost of selling. Those possibilities should remain open until customer evidence and company capabilities support a choice.

Aim for the most critical challenge within credible reach

Aim at the most critical challenge the company can credibly address. When a problem threatens the customer’s business model, growth or future, its leaders have a powerful reason to seek an answer. They want to believe there is a way forward. A company that gives them a credible one earns a different conversation.

That is why the words “most critical” matter. They push the work beyond a convenient adjacent use case. At Piano, the important opportunity was the publisher’s search for a viable new revenue stream. The software requirement belonged inside that challenge.

The words “credibly address” matter just as much. Every supplier can attach its product to growth, profitability or transformation in a presentation. The company needs a defensible explanation of how its capabilities change the customer’s situation, where its responsibility begins and ends, and what the customer must contribute.

Then turn that interest into a decision the customer can make. Address the cost, the implementation work, the risks and the first commitment. The size of the problem earns attention. Your method must make action possible.

A useful test is to ask an executive to complete three sentences: “This matters because…”, “We have not solved it because…” and “We would take action if…”. The answers reveal both the stakes and the obstacle. They are more useful than a general declaration that a topic is a priority.

Put the customer at the center; and follow the value outward

My approach draws on design thinking’s attention to human needs, technical possibilities and commercial viability. [4] It requires observing what people value, how they behave and what prevents them from achieving the result they want.

In B2B markets, that can lead to the customer’s customer. A publisher’s readers determine which offers are valuable. A retailer’s customers affect what an inventory decision is worth. A software company’s users influence whether an enterprise deployment actually changes behavior.

Follow where value is created and lost. For a revenue challenge, that may lead to the customer’s customer. For an operating challenge, it may lead to a decision, a handoff or a cost that nobody has taken responsibility for resolving.

For a publisher, the useful questions were concrete. Who comes back? Why? What relationship has the publisher earned? Which needs fit the audience and the brand? What can the publisher deliver credibly? What would make the offer valuable enough to pay for?

Loyalty is evidence of a relationship, not a license to sell anything. An offer that violates the reason people trust the company can destroy the asset the strategy depends on.

Establish the right to pursue the challenge

Identify what gives this company the right to solve the problem. It could be a product, a relationship, specialized knowledge, data access, distribution or a combination of assets. Name those assets. Establish what is missing and what it would take to obtain it.

It should also reveal the company’s limits. A compelling executive problem that requires capabilities the company cannot acquire economically is a poor strategic choice. So is a small product improvement dressed in the language of an enormous promise.

Jim Collins’s Hedgehog Concept is a useful discipline here: connect the work the organization is committed to, the domain in which it can excel and its economic engine. [5] The important question is what the company can become exceptional at, supported by evidence about its assets and choices.

The outcome is a choice: this is the challenge we will help the customer solve, this is why it matters, and this is why we are entitled to ask for the responsibility. That choice should reshape the company’s priorities.

3. Give the customer a different way to see the problem

A point of view changes what the customer sees

A customer who hears your proposition should see something they did not see before. A strategic point of view identifies the assumption limiting the current answer and gives the customer a more useful way to act. If the buyer leaves with the same understanding of the problem, you have given them little reason to reconsider how they buy.

At Piano, the accepted starting point was content monetization. The alternative began with the audience relationship. That shift made new offers and a different commercial conversation possible. Its power came from a real change in the object of attention.

A claim such as “we help publishers grow revenue” would have named the desired outcome without changing the thinking. The loyal-audience argument supplied a different explanation of where the opportunity was and what work needed to happen next.

A useful point of view has four connected parts: the critical challenge, the assumption constraining the current answer, the alternative principle and a practical method for acting on it. Remove the method and the proposition becomes difficult to trust. Remove the different principle and the company returns to competing on execution of the existing answer.

Why buyers can ask “How?” before asking for proof

An executive can recognize a useful idea before seeing a completed case study. That was my experience at Piano. The proposition made sense of a problem the buyer already understood, and we could explain how to begin working on it.

The buyers already understood the pressure on their revenue model. The reframe connected an asset they possessed; a loyal audience; to a possibility they wanted to pursue. My reading of their response is that this recognition gave the conversation its force. They could see the opportunity and wanted a method for reaching it.

A new proposition earns its first hearing through the strength of its explanation, the credibility of the supplier and a practical path forward. It earns lasting confidence through delivery. Move from recognition to commitment, from commitment to results, and from results to repeatability. Each step gives the company something stronger to build on.

Make the idea portable without making it shallow

The executive should be able to repeat the proposition. So should a salesperson, delivery leader or investor. Portability matters because the argument has to travel through a buying organization and through the company delivering it.

The one sentence is an entry point. Behind it sits a fuller explanation: what is wrong with the inherited assumption, why the proposed alternative follows, how it works and what the company will do. Simplicity at the surface requires substance underneath.

My governing principle is: Let your customer’s most critical business challenge define what your company becomes. Let it determine the offer, the capabilities you build, the economics you pursue and the position you defend. The principle has consequences for the whole business.

Being early with a strong point of view matters. It creates an opportunity to shape how customers understand the problem and to earn relationships before alternatives become familiar. The company then has to turn that opening into adoption and accumulated advantage.

Test the thinking in the buying conversation

The useful test is what changes after the buyer hears the argument. Do they recognize the challenge? Do they question an assumption they previously accepted? Do they bring in another decision maker, share information, investigate the method or commit to a next step?

Disagreement can be valuable evidence. The buyer may reveal that the problem is less important than expected, the proposed answer misses a constraint or the company lacks credibility in the role. The task is to learn which part of the argument failed.

Public reaction provides a different signal. A provocative post can attract attention without creating confidence in the author’s judgment. The content should help the right reader make a consequential decision. Its strongest result is an informed conversation with someone who recognizes the problem in their own company.

4. Change the answer; and the economics behind it

There is more than one route to a better answer

Choose the move that changes the customer’s decision and improves the business you can build. That move may change the problem being solved, the scope of the answer, the capabilities combined or the economics of providing it. The ambition is a stronger position with a clear reason to win.

I examine five paths. A strategy can combine them, but it should be clear which change creates the value.

Judge every route by what it changes: customer choice, the result delivered, the cost of delivering it and the difficulty of matching it. A reframe that changes none of those has not done the strategic work.

Study category history to see what previous leaders changed and what they left unresolved. Follow the problem, the competing answers and the economics. That history helps identify which constraints are fundamental and which have simply become familiar.

Design the whole offer

Once the answer is chosen, the company has to decide what a customer is actually buying. That includes the result being pursued, the mechanism, the product and service responsibilities, the customer’s role, the deployment path and the commercial terms.

Start with the assets you possess. Design the answer around the customer’s challenge, then decide what to build, combine, partner for or stop doing. A larger promise creates a larger delivery obligation. Strategy must account for it.

A services component can accelerate learning or make a new answer usable. It can also conceal a product that is expensive to deliver. The company needs to understand which work becomes repeatable, which remains expert-dependent and whether the resulting economics support its ambition.

Likewise, an outcome-based price is useful only when the parties can agree on the outcome, measure it sensibly and allocate the factors outside the supplier’s control. Changing the price label does not resolve those requirements.

Seek an asymmetric position

I use a qualitative lens for judging the strength of a strategic move:

Asymmetry = Difference × Leverage × Difficulty of Response.

Difference asks why the customer should choose this answer. Leverage asks what lets the company create more value without proportionately increasing effort or cost. Difficulty of response asks what another company would have to change to match the position.

The multiplication sign is a reminder that weakness in one dimension can undermine the others. It is not a scoring formula. A distinctive promise with labor-intensive delivery and easy imitation may produce attractive individual engagements while falling short of the intended company economics.

To find asymmetry, map the system around the purchase. Who owns demand before it reaches the supplier? Who bears uncertainty? Which resources sit idle? Where is information fragmented? Who benefits from one decision while someone else pays for it? Which relationships could change the cost or reliability of the answer?

For an illustrative service business, a hospitality partner may care most about protecting its guests’ experience. A reliable fulfillment model could earn repeat referrals. More predictable demand might justify dedicated capacity, which in turn improves reliability and strengthens the partner relationship. The strategic opportunity depends on whether those connections hold in practice. A new package name would not create them.

This same discipline applies to SaaS. Distribution access, deployment responsibility, pricing units and the customer’s cost of operating the answer can be as consequential as product capability.

Preserve the engine that funds the next move

A strategic evolution needs an investment path. A profitable existing offer can fund the work that establishes the next position. Abandoning it before the alternative is credible creates unnecessary exposure.

The company should define a bounded initiative: the customer problem, the initial segment, the offer to test, the resources committed and the evidence that will justify further investment. The boundary protects current obligations while giving the new proposition enough room to become real.

The essential question is which uncertainty to resolve next. If relevance is uncertain, begin with customer conversations. If buyers commit but delivery is uncertain, test the delivery model. If the offer works but costs too much to provide, address economics before accelerating acquisition.

This is how the strategic ambition becomes a sequence of decisions the company can afford to make.

5. Make the company deliver the promise

Individual success and organizational change are different achievements

Piano demonstrated that a strategic idea could travel beyond the person who introduced it. Two coached salespeople used the reframe and won large contracts. That is meaningful evidence of transfer.

After my departure, sales returned to product selling. The lesson is one I take seriously: a strategic idea can change individual sales before it changes the company. The next task is to make the approach part of how the organization works.

The organization’s established routines exert a strong pull. Its pipeline reviews, compensation, hiring, training, product priorities and delivery processes may still reward the previous way of working. A new presentation has limited power against that system.

A strategy becomes organizational when ordinary decisions reinforce it without requiring its originator to be in the room.

Translate the answer into responsibilities

The executive team needs to agree on the problem the company will take responsibility for and the boundaries of that commitment. Sales needs a way to discover the problem and explain the method. Product needs priorities grounded in the promised result. Delivery needs the capability and authority to fulfill it. Finance needs to understand the economics and risks. Customer leadership needs to help buyers sustain the new way of working.

These responsibilities should connect. If sales promises a strategic outcome while delivery is organized around feature activation, the customer encounters two different companies. If product investment follows every existing request, the new answer may never acquire the capabilities that make it distinctive.

Training therefore has to include judgment. A salesperson should understand when the proposition fits, how to identify the executive consequence, which evidence to seek and when the company should decline the opportunity. Memorizing a line is insufficient preparation for a consequential business conversation.

Build a commercial and delivery record

The company should retain the reasoning behind its important decisions. What did the customer believe initially? What changed? Why did the buyer commit? What was promised? Which capabilities were required? What happened after adoption?

Over time, this record can improve qualification, pricing, deployment and product choices. It also makes the point of view more precise. Failed opportunities become useful when they reveal a recurring constraint instead of disappearing into a generic loss reason.

Success needs similar scrutiny. A large contract might depend on one buyer, unusual service commitments or a long term. The company should know what made it possible before assuming it has a repeatable motion.

The measures should follow the intended change. New executive conversations show access. Paid commitments show demand. Adoption shows use. Customer economics show value. Repeatable delivery and improving supplier economics show that the company is building a business around the answer.

Give the strategy an operating rhythm

The leadership team needs a recurring forum for deciding what the evidence changes. Which customer problems are proving most consequential? Where does the answer work? What does delivery reveal? Which investment will make the proposition stronger? What should stop?

The owner of this work needs authority across functions, or dependable access to those who hold it. Otherwise, the initiative can generate recommendations that the organization has no way to act on.

The transfer test is practical: can a second team diagnose, sell and deliver the answer with consistent judgment? Can leaders explain why the company is making its investment choices? Can the business keep learning when the original advocate is absent?

When those conditions hold, the strategic idea has begun to become an organizational capability.

6. Build what stays valuable when AI can do the task

What gets stronger because the company operates?

A first-mover lead gives you time. Spend it building something that makes the next competitor’s job harder. Breaking out creates the opening; what you build next determines whether you establish a leading position or become stuck in the middle of another market. Turn the new point of view into relationships, adoption, learning and assets that keep improving the answer.

Early customer relationships can teach the company which decisions matter. Repeated delivery can improve its method. Trusted distribution can reduce the cost of reaching the next customer. Connected operating history can make future judgments more useful. These are possible sources of accumulation, and each requires a mechanism.

I ask a simple question: what becomes more valuable, more effective or more difficult to reconstruct every time the company successfully serves a customer?

If the answer is only revenue, the company may be growing without strengthening its position. If the answer is a learning process or asset, the next question is who benefits from it and whether the benefit is meaningful enough to influence customer choice.

The flywheel idea, associated with Jim Collins, emphasizes accumulated progress through consistent effort. [6] My practical test for a proposed flywheel is whether the result of one cycle improves the starting conditions of the next. More customers followed by more revenue is a sequence. It becomes a reinforcing system only when the additional activity improves something that makes future customer value or acquisition stronger.

The links need evidence. More data can add noise. More customers can increase complexity. More customization can weaken delivery. A flywheel drawn on a slide is a hypothesis about how the business works.

Move 2: build a position that survives better AI

AI raises the cost of getting this wrong. A company that spends years building an easily reproduced answer has invested in a position a competitor can undercut. My strategic rule is: do not make an easily duplicated capability the foundation of the company’s value.

The relevant test is the customer’s ability to replace the valuable result. A feature may be easy to reproduce while the service around it remains important. A technically sophisticated feature may still become commercially substitutable when an alternative produces an adequate result more cheaply or conveniently.

Ask what customers will still need from you when an agent can perform the visible task. If your answer is another feature on the roadmap, the strategic question remains open. Identify the context, authority, relationships or operating continuity that make the result valuable; and establish why your company is the right place for them.

Agentic systems can already combine models with retrieval, tools and memory, and can direct sequences of actions. [7] The strategic implication I draw is that some value will move from the visible application into the context and operating environment needed to act well. The timing and extent will differ by market.

My strongest version of Move 2 is therefore: build the decision environment agents must operate inside.

What a decision environment contains

A decision environment holds the business context that makes action intelligible and accountable. It connects the relevant entities and records, the definitions used to interpret them, the objectives being pursued, the authority to act, prior decisions and observed consequences.

Consider an agent asked to improve subscriber economics. It needs more than the ability to write an offer. It needs to know which subscribers are under discussion, how their economic contribution is measured, what has already been tried, what the business is trying to optimize, which actions are permitted and what happened after previous interventions.

The valuable environment makes that context usable by both people and agents. It preserves continuity as the tools performing individual tasks change.

Earn a position in which competing agents need your environment to do the job well. Make it the place the customer trusts for the relevant facts, definitions, decision rights and operating history. The position comes from becoming useful to the customer’s decisions and actions, then strengthening that usefulness through repeated use.

Test that ambition against the strongest alternative: the customer assembling it, an incumbent extending its platform or a new entrant using better technology. What would each have to reconstruct? Why would the customer still choose you? Those answers determine whether you have a durable position.

Connected history has to earn its value

Historical records become strategically useful when they preserve relationships that matter: the condition at the time, the decision, the reason for it, the action and the result. That can help the organization avoid repeating mistakes and make better comparisons.

A pile of records is less useful than a history with consistent definitions. A history of outcomes is less informative when no one knows what was done. And an observed improvement does not establish that the recorded intervention caused it.

The business has to maintain data quality and establish what it is entitled to use. Customer data does not automatically become an exclusive vendor asset. Learning that improves one customer’s decisions may create retention value without creating a cross-customer network effect. Those are different mechanisms and should be evaluated separately.

Trust also has to attach to something concrete: dependable operations, traceable decisions, respected permissions or a record of helping the customer achieve its goals. Trust is strategically valuable when the customer has a reason to rely on it.

Test the response competitors would need to make

Difficulty of response can come from time, relationships, adoption, a change to existing economics or the need to reconstruct meaningful history. None should be assumed merely because an incumbent has an established business model.

Ask how a credible competitor would respond. Could it build, partner, acquire, bundle or make the result available through a general platform? What would stop a customer from assembling the answer itself? Which part of the proposed position would remain valuable under those responses?

A strong answer identifies the particular obstacle and the evidence behind it. An answer that depends on competitors being slow or customers being unable to leave needs more work.

Durability is an ongoing strategic discipline. The company should use its early lead to build assets and relationships that improve the answer, while continuing to test whether the customer still needs the role it has chosen to occupy.

7. Make the value show up in the business

Make the economic mechanism explicit

A more important conversation is the beginning. Exceptional enterprise value requires a stronger business behind it. Trace the strategy into what customers buy, what they pay, how long they stay, what delivery costs and what improves as the company grows.

The basic valuation logic is familiar: value depends on expected future cash flows and their risk; relative pricing depends on which businesses are considered comparable and on the assumptions behind that comparison. [8] A strategic argument matters when it changes what can reasonably be expected of the company.

A more important role in the customer’s business can support larger commitments, broader adoption or stronger retention. A different delivery or distribution model can improve economics. Accumulated capabilities can increase the quality of the answer or reduce the effort required to provide it. Each is a proposed causal path that should show up in operating evidence.

Larger contracts alone do not establish higher enterprise value. They can come with longer terms, heavier services obligations, concentration or risk. The question is what happens to the quality, durability and cost of the revenue.

The Piano wins showed the commercial opening. To turn an opening like that into a more valuable company, build the repeatable delivery, customer results and supplier economics that support it. The strategy has to travel all the way from the buying conversation into the operating record.

Separate three sources of value

First, the company can improve how it operates: acquire customers more effectively, deliver more value, retain them longer, expand responsibly or lower the cost of serving them. That changes the business itself.

Second, the company can make existing value easier to understand. An asset may already possess relationships, capabilities or operating history that are poorly explained by its current positioning. A better account of those assets can improve recognition, provided the underlying facts support it.

Third, the company can establish credible future opportunities. These require a view of the market, the capabilities and investment needed, the time involved and the uncertainty. They should remain distinguishable from performance already achieved.

Combining these without distinction weakens the argument. A buyer should be able to see which value exists today, which is being created and which depends on future execution.

The founder’s and board’s question

For founders and boards, the central question is whether the company’s current strategy gives it a credible route to the ambition being funded.

Is additional capital likely to strengthen a differentiated position, or mainly increase the effort required to maintain growth? Does the product roadmap advance the critical customer challenge? Are the economics improving with experience? Is the company building something that will remain useful as alternatives change?

These questions turn category leadership into a set of operating choices. The company can decide which customers to serve, which commitments to make, what to build and how to allocate resources. It can also choose a narrower ambition where that produces a stronger business.

The investor’s question

For an investor or acquirer, the company’s current category is a starting description of the asset. Diligence should also ask whether that description captures its potential and its exposure.

What customer problem actually makes the company important? What does the customer rely on it for? Which capabilities are replaceable? Which relationships, rights or histories are meaningful? What would the next strategic move cost, and is the organization capable of executing it?

The same analysis can reveal both upside and risk. A neglected capability may support a more valuable role. A celebrated feature may be vulnerable to a cheaper alternative. A proposed new position may be attractive but depend on data access or authority the company does not possess.

Strategic opportunity should have an execution owner and an investment case. Otherwise, the buyer risks paying today for a future it has only described.

The banker’s question

For an M&A advisor, the task is to make the company’s value legible and defensible to the right buyers. That requires a coherent connection between the market problem, the company’s role, its operating evidence and the opportunities available to a new owner.

The strongest equity story can be traced into the business. The customer history supports the importance of the role. The economics support the quality of the revenue. The assets support the proposed advantage. The operating plan supports the future opportunity.

When time permits, change the operating history before the transaction asks someone to price it. A new management discipline with several observed decision cycles is more concrete than a future feature in a presentation. It gives buyers evidence to investigate and a clearer view of what remains to be built.

That is how the strategic argument reaches enterprise value: through better choices, stronger operating evidence and a credible account of what the company can become.

8. Put the method to work

A worked strategic thesis: the subscriber portfolio

The method becomes easier to assess through a developed example. My subscriber portfolio work asks a critical question for subscription businesses: how does management deliberately build a subscriber base whose economic value improves over time?

The following is a worked strategic thesis: an application of the method to a business problem, with adoption and outcomes still to be tested.

Subscriber counts, average revenue and churn describe important aspects of a business. They can also conceal differences between the groups that make up the subscriber base. A growing total can coexist with increasingly expensive acquisition or weaker contribution from newer subscribers.

Consider an illustrative publisher whose discounted acquisition campaign produces many sign-ups. The headline growth looks encouraging. A closer view could show that this group costs more to acquire, contributes less and requires repeated discounts to retain. Another, smaller group might contribute more over time. The management question becomes where to invest and what to change, given those different economics.

The underlying shift is from monitoring subscription activity to deliberately managing the economic composition of the subscriber base. That creates a recurring executive decision, with consequences for acquisition, pricing, engagement, retention and product development.

The operating object: a Subscriber Portfolio Statement

The proposed statement gives management a consistent view of groups it can act on. It connects subscriber identity, the basis for grouping, observed revenue, relevant costs and the decisions taken about each group. It should begin with a definition of contribution that management understands and can reconcile with the business’s financial records.

The same groups return in successive reporting periods. New cohorts are added without erasing older ones. Cohorts are compared at similar ages when that is necessary to make the comparison meaningful. Changes in definitions are recorded so an apparent business improvement is not merely a measurement change.

Forecasts can extend the view, but should be explicit about assumptions. A revised forecast of lifetime value may reflect new facts, a different model or both. Management needs to know which.

The statement also connects observations to action. What did management decide? Who owns the intervention? What result is expected? When will it be reviewed? What actually happened? Where possible, a comparison or experiment helps distinguish an intervention’s effect from changes that would have occurred anyway.

For the illustrative publisher, that might lead to reducing one acquisition campaign, testing a different offer for a specific group or investigating why a valuable cohort leaves. The statement supplies a consistent basis for the decision and its later review. Its value depends on the quality of those decisions and the company’s ability to act on them.

How this becomes a SaaS strategy

A supplier pursuing this opportunity would need to determine what it already possesses: customer access, billing or behavioral records, useful integrations, economic knowledge and the ability to support management decisions. It would then identify what the answer still requires.

The strategic opportunity is to make this a recurring management discipline. Connect the ingredients, put the statement into real resource decisions and preserve what happens next. The test is whether management uses it to make better choices and whether the supplier can deliver it economically.

The proposed offer could bring together a recurring management review, an agreed statement, the supporting data and the history of decisions and results. Its commercial relevance would come from helping management allocate resources across the subscriber base with better evidence.

Move 1 is the more consequential promise: help the customer improve the economics of the subscriber portfolio. Move 2 is the connected environment in which people and agents understand those economics, act within agreed constraints and retain the history needed for the next decision.

The publisher’s benefit and the supplier’s advantage are separate questions. The publisher needs better decisions and better economics. The supplier needs an important recurring role, viable delivery economics and something customers value enough to keep using as alternatives improve.

The hypothesis would be weakened if customers already had an adequate solution, if the data could not be made reliable, if management would not use the discipline or if the supplier could not deliver it economically. It would strengthen through paid adoption, repeated use in real decisions, improving customer results and evidence that the connected history makes subsequent work better.

A practical sequence for applying the approach

Begin with the company as it exists. Understand its customers, product, economics, capabilities, distribution and obligations. Listen to how people explain why customers buy and why opportunities are lost. Make the inherited assumptions explicit.

Then investigate the customer’s critical challenges. Follow the consequences beyond the original product request. Speak to the people who experience the problem, those responsible for its business impact and those who would have to change their behavior. Establish what the company has a credible right to address.

Develop alternative answers. Test improvement, expansion, reframing, recombination and economic change. Compare them against customer importance, delivery feasibility, economics and the response they would invite. Preserve competing explanations until evidence supports a choice.

Turn the strongest candidate into a point of view and a concrete offer. The customer should be able to understand the argument, the method, its own responsibilities and a sensible first commitment. The company should understand what must be true for the offer to work.

Take it into real buying and delivery situations. Record what changes in the conversation, what buyers commit to, what they actually use and where the result falls short. Design the next test around the most consequential unresolved assumption.

Finally, build the organization and accumulation mechanism. Align responsibilities, preserve the decision record, identify what gets stronger through use and connect the operating evidence to the enterprise-value thesis. Continue revising the strategy as the business and its alternatives change.

This sequence is a guide to judgment. Some companies will begin with an executive challenge; others with an underused asset or a change in economics. The work should converge on the same connected decisions.

The strategic decision brief

A concise decision brief keeps those connections visible. It is complete when a leadership team can make a resource decision from it and explain the reasoning to the people who must act.

AI can help research the category, compare explanations, challenge assumptions and organize evidence. The decision brief should retain sources and unresolved questions so generated fluency does not become a substitute for judgment. The company’s leaders remain responsible for the choices and their consequences.

Decide what is worth scaling

The time to question your position is while growth still gives you choices. Establish why customers should choose your company before hiring, investment and delivery commitments make the current answer difficult to leave behind.

My starting question for a SaaS CEO is this: if you executed your current strategy perfectly, would you become the company customers turn to for a critical business challenge; or a larger supplier they can still replace?

That question reaches beyond the sales plan. It asks whether growth is taking you toward leadership or toward the middle: too small to challenge the leader, too committed to the existing business to compete like an upstart. The answer should determine the promise, the product, the economics, the organization and the advantage you build through use.

Break out before sales flatten and the room to change narrows. Let your customer’s most critical business challenge define what your company becomes. Then scale the business around that answer.