A Product is Not a Strategy

A myopic focus on product features and market validation can blind entrepreneurs to deeper structural challenges. The hard truth is that identifying customer needs and building something people want is necessary, but often insufficient for lasting success.

In 1989, Field of Dreams gave us one of Hollywood’s most enduring myths: “If you build it, they will come.” I’ve watched entrepreneurs fall victim to this illusion for decades. They build a great product that customers want, and then believe success will naturally follow.
 

Jeff Bezos knew better. As online retail boomed in the late 1990s, hundreds of startups launched with the same playbook: pick a product category, build a sleek website, and let the internet do the rest.

Nearly all failed.

If you’re a founder or investor, this may sound familiar. You develop a product that customers love—one that solves a clear need—and yet the business stalls. Often, the issue isn’t with the product itself. It’s that a critical underlying obstacle hasn’t been properly diagnosed or addressed.

Bezos took a different path. In a 1999 CNBC interview, a host challenged him: “You’re not really a pure internet company anymore, are you? You’ve got millions of square feet of real estate…and thousands of employees.” Bezos replied, “Internet, schminternet. What matters is delighting customers.”

It sounded like a throwaway line, but it wasn’t. Bezos understood what his competitors didn’t: e-commerce’s central challenge wasn’t digital—it was physical. Fast, reliable delivery wasn’t a nice feature; it was the core business. Solving it meant building warehouses, inventing new logistics systems, and developing operational infrastructure. It required real strategy, not just software.

What if the real work of startup strategy begins after you’ve built something customers want? That next step is figuring out how to deliver value in a viable, sustainable, and defensible way. This is what startup strategy is truly about.

THE STRATEGY DOCTOR

I’ve spent 25 years studying strategy and entrepreneurship, but my interest began earlier. As a teenager, I watched my entrepreneur father build a fortune, then lose it all. I’ve been trying to understand why ever since.

There are no simple answers. But I’ve come to believe the best way to understand entrepreneurial success and failure is to view it through the lens of strategy. More specifically, through what I call a problem-focused approach.

I think of the strategist as a doctor. When someone shows up with chest pain, a good physician doesn’t prescribe immediately. They diagnose. Is it indigestion? Anxiety? A heart attack? Treatment depends on identifying the real cause. 

Strategy works the same way. The customer’s unmet need is a symptom. The deeper challenge is figuring out what makes that need hard to serve sustainably and defensibly.

That’s why strategy is neither a product nor a plan. A product is an offering; a plan is a sequence of steps. Strategy is the logic behind why those steps matter. I define startup strategy as a theory: one that identifies the critical problem and proposes a coherent set of actions to solve it.

Traditional definitions of strategy—as “a plan to achieve a goal”—miss the point. In my experience, plans are often seductive distractions. They can create the illusion of progress while leaving the real problem untouched. The best strategies begin with a diagnosis: What’s the real obstacle to success? Only then do they chart a coherent path forward, just as a good doctor treats the underlying condition, not just the symptoms.

THE TWO PROBLEMS EVERY STARTUP MUST SOLVE

When I work with entrepreneurs, I break their challenge into two parts. First is the customer’s problem, which is the basis of the market opportunity. Most founders are good at spotting gaps in the market where customers are underserved or frustrated. That customer-centered insight often motivates them to start companies. But identifying a need is not the same as having a strategy.

The second challenge is tougher: the startup’s problem. To begin thinking about the startup’s problem, ask: Why hasn’t someone already jumped into this market opportunity? What structural barriers make it hard to address profitably? I call this the Problem-of-Value—a concept central to effective startup strategy. It is the structural reason why the opportunity is difficult to solve and what separates wishful thinking from strategic reality. This is also the part of startup strategy that founders most often overlook. In fact, it’s the reason the opportunity exists and persists in the first place.

Consider the cautionary tale of the Bionic Wrench. Inventor Dan Brown created a clever, adjustable wrench that gripped objects of different sizes. He patented it, landed a deal with Sears, and saw strong sales. But soon after, Sears copied it and undercut him. Brown’s startup struggled not because customers didn’t see the wrench’s utility or because it was flawed, but because he couldn’t defend his position. In a market where patents are expensive to enforce and customers won’t pay premium prices, he couldn’t solve the problem-of-value.

Brown’s strategy failure wasn’t unique. It was one example of a broader category: structural barriers that quietly undermine even well-loved products. Problems-of-value come in many forms. Some arise from legal fragility or imitation risk, like Brown’s. Others involve customer adoption friction, cost structure challenges, regulatory entanglements, or dependence on entrenched intermediaries. Still others stem from misaligned incentives, infrastructure gaps, or ecosystem dependencies. These barriers often lie hidden. Even when they aren’t obvious, they can determine whether a business can scale, differentiate, or survive. The task of strategy is always the same: to diagnose what makes the opportunity hard to pursue and even harder to sustain. If you don’t surface these obstacles early, they can become fatal.

Real strategy is not a unique product, a pitch deck, or a clever analogy. When a founder says they’re building “the Uber for dog walking” or “TikTok meets health care,” they’re describing a product, not a strategy. If you hear something like that, you should think: Why hasn’t this already been done? What is the defining problem-of-value that makes it hard to deliver profitably?

In my Tuck course, Startup Strategizing, and in a book I’m writing with my Tuck colleague Ramon Lecuona Torras, I explore these questions in depth. While success may start with solving the customer’s problem, enduring success requires solving the startup’s problem-of-value, too, which is why a problem-focused approach to strategy matters.

After all, a product is not a strategy. It might get you in the game, but it won’t keep you there. The next time you evaluate a startup idea—whether as a founder, investor, or team member—don’t just ask if it solves a customer problem. Ask what makes that problem hard to solve profitably and sustainably. That’s where the real strategy begins.

This story originally appeared in print in the summer 2025 issue of Tuck Today magazine.