Posted: December 18, 2013
Focus, focus, focus!
Lack of it can be fatal to a companyBy Brad Feld
In my mid-20s, I was part of an amazing experience called Birthing of Giants. It was a gathering of 60 entrepreneurs over four days (for three years) who were all under 40 and founders of companies with more than $1 million in revenue. It was the first time I discovered my peer group and while I was young (24 years old) and small ($1 million in revenue) I felt like I immediately fit in.
One of the guys in the group from from Brazil. He had this delicious accent and intense passion whenever he spoke. I remember being across from him in some conversation when he pounded on the table in reaction to something and said, “Focus, focus, focus!”
The message has stuck in my head. I was in several meetings the past few weeks where I wanted to bang on table and scream, “Focus, focus, focus!” In each case, I restrained myself and tried to be constructive.
Each situation had differences, but fundamentally, there was a vector where the company had no focus. Each company has an amazing core technology. Each one has a clear mission. But in one case, they don’t know what “word” they own, in another they are serving two entirely different customers that had no relationship to one another, and in the third they were going after three completely different markets with different products.
Now, there are plenty of cases where it makes sense to have two threads going at the same time. If you’ve got an API business and an end-user business that deal with the same core data and feed off of each other, you can effectively combine them as long as you own a single word or concept. If you’ve got enough scale, you can go after different market segments. As you get bigger, you can expand your product line.
But early on, especially pre- or early revenue, lack of focus is the death of so many companies. Sure, there’s a point where you are still thrashing around looking for “the thing.” You are using all the Lean Startup and Lean Launchpad techniques to find your product-market fit. You are iterating and pivoting. You’ll want to use a freemium model to capture the low-end customer while selling directly to a high-end customer. How’s that – I just used a bunch of buzzwords to help rationalize the “search for focus” – clever, eh?
But at some point you have to focus. What word do you own? Who is your customer? What are you selling them? How are you selling them it? Why are they buying it?
This is especially true when something is working. You’ll feel like hedging your bets. But don’t – go all in on the thing that is winning. Do it over and over again. And build scale quickly with it so that you can start experimenting with more things.
Brad has been an early stage investor and entrepreneur for more than 20 years. Prior to co-founding the Boulder-based Foundry Group, he co-founded Mobius Venture Capital and Intensity Ventures, a company that helped launch and operate software companies. Brad is a nationally recognized speaker on the topics of venture capital investing and entrepreneurship and writes widely read and well respected blogs at www.feld.com and www.askthevc.com. He holds bachelor's and master's of science degrees from from MIT. Contact him at email@example.com