Focus, Focus, Focus!

One of the biggest advantages startups have over larger, more established companies, is that their inherent lack of resources forces them to do fewer things — to focus. Focus is important for all companies, but while a lack of focus in an established company can slow growth and lower returns, inability to focus in a small company will kill it. I’ve seen more companies die from indigestion than starvation.

Being focused isn’t just the best way to maximize your chances for success, it also happens to be critical when you’re pitching venture capitalists. It’s difficult for a venture capitalist to connect the dots when they are scattered all over the place.

I’ve had some variant of the focus conversation, usually more than once, with every company I’ve been involved with, whether as an angel investor, an advisor, or a venture investor. It’s not necessarily a bad thing to have to remind an entrepreneur to focus — in my experience, one of the hallmarks of a really good idea is that you always have more directions you can take it than you have time and resources to pursue. The key is figuring out what of your available options you are going to do, and more importantly what you are NOT going to do and then run like hell.

Focus permeates every function of a company, but it starts with product-market fit and determining the minimum viable product. Much has been written about these concepts, and while they are related, they are not the same thing. Product/market fit implies something about the customer you are targeting. It’s easy to understand that the needs of a Global 2000 customer, and therefore, the minimum viable product you’d have to deliver to service them, are going to be different from the needs of an SMB customer — although I have had companies argue they can do both. Where it gets tricky is when you have what seems like the same type of customer, Global 2000 for instance, asking for the same solution delivered in a different way. One wants it delivered as a service and another wants to license it and run it themselves. While your solution may have found a product-market fit, the minimum viable product for those customers is different — pick one. A seemingly innocuous decision to “take the money” and serve both today has a compounding impact on every aspect of your product development, delivery, and go to market. You’ll pay dearly for it later in your inability to innovate as quickly as necessary to stay competitive.

But what if the option I choose isn’t the optimal among my choices? I need to keep several options open just in case I chose wrong or one of the alternate paths “pops.” Typical. Keeping multiple options open is self defeating. While you think you’re hedging, you’re actually not doing justice to either alternative thereby dooming both. If you do come to the very difficult conclusion that you need to pivot, you need to do so with conviction and run like hell down your newly chosen path. Straddling two camps is a surefire way to rip your company apart.

Focus, focus, focus. Repetition doesn’t spoil the prayer.

Originally published at www.greggretsch.com on June 17, 2010.