As I’ve started to speak with more first-time entrepreneurs, I have noticed a handful of trends and patterns. One pattern I’ve recognized is from founders that have trouble recognizing what they are building over the next year vs the next decade. A word used by founders that immediately makes me want to end the meeting is “pigeonholed.”
During the conversation, I’ll listen to the founders speak passionately about their grand visions. This is truly fun for me as being a founder several times now. I have so much respect for what these folks are attempting to accomplish. I love founder ambition. For those that know me, they will know how difficult it is for me to actually keep my mouth shut as I want to participate as much as possible!
Not surprisingly, in many of the conversations, founders will talk about all the ways they can or are making money. They can do this thing AND that thing, and maybe this other thing too. I’ll ask, “If you can do one thing better than anyone else in the world, what would that be?”
The right answer in my opinion, is whatever the founder says, as long as it’s just one thing for right now. I believe it is so hard to do one thing well. For a first time founder, doing multiple things well is so unlikely. Let’s assume the founder answers correctly. My next question is, “Why are you spending time on anything else?”
The right answer in my opinion should be a long pause… then “hmmm…” then “I don’t know.” Too many times already, I have gotten the answer that the founder doesn’t want to be pigeonholed and as soon as they say that, it’s like nails on a chalkboard or Jim Carrey screaming the most annoying sound in the world from Dumb & Dumber.
I get what the founder is doing. I made that mistake over and over when pitching VC’s previously. If I keep optionality, I keep TAM (total addressable market) bigger, and I have more potential revenue streams. Experienced operators know that resource allocation is key. They know that keeping the team focused is vital. They know that things will go wrong and need to be agile.
I suppose it’s easier to give examples like Amazon, Uber and Google. Amazon wasn’t pigeonholed with online books in the US, Uber wasn’t pigeonholed with Black Cars in San Francisco, and Google wasn’t pigeonholed into search. I try not to use those examples though.
The goal is helping the founder see the value of incredible focus early on and they have to be humble enough to see it.
I wish I had a mentor or coach early on that would have helped me see that in both of my previous businesses. The more focused, the fewer decisions you need to make, the better and faster you can make those decisions.