YouTube did it with videos, Instagram did it with photos, and Amazon did it with books. Many of the business plans I have seen as an investor, like trying to integrate all the social media features of Facebook, Twitter, and LinkedIn into a new platform, don’t do it. Of course, once you have a brand and more resources, it can pay to expand your book selling to a full e-commerce site.
In fact, there are a host of reasons why a non-focused startup business is more likely to struggle for survival, lose market and investor attention, and miss out on the opportunity to capitalize on their scope:
- Time to market is tied to the size of your offering. In many business domains today, the market seems to change about every ninety days. With the current low cost of entry, nimble competitors appear quickly and seize the high ground of your existing customers and potential. No startup can implement a broad strategy quickly enough to stay ahead.
- Broad product offerings require too much infrastructure. More money is hard to find, and building efficient multiple processes is even harder. Every aspect of every product requires development, testing, manufacturing, marketing, and distribution. The probability of failure goes up exponentially as the number of product features increase.
- It’s tough for an elephant to be agile. Every successful startup I know has pivoted a couple of times, as they learn what really works in the marketplace and in the sales process. Did you know that both YouTube and Facebook started out to be dating sites? Even IBM, with their personal computer, had trouble making their elephant dance.
- Ongoing market leadership requires continuous innovation. The initial larger cost in time and dollars is only the beginning. The first-to-market advantage doesn’t last long. You need continuous innovation in all elements of your product line to stay ahead, or your startup will be quickly left in the dust.
- Marketing a product with too many features is self-defeating. It’s almost impossible to craft a memorable message that has more than three bullets. The more you try to capitalize on the breadth and depth of your solution, the more people don’t get the message at all, and settle for a competitor that focuses on their personal hot-button.
- Your personal bandwidth is quickly exceeded. When your solution has too many elements, even you can’t keep the priorities straight, and your team gets frustrated, tired, loses motivation, and tends to not do anything well. As a new entrepreneur in a new startup, it’s better to walk before you try to run.
Thus the first and top focus for every entrepreneur should be on strategy. The strategy needs to be simple, written down, and communicated regularly to the entire team. A simple test is to see if you can quickly name your top three priorities, and if every team member is able to respond quickly with the same three. Too many strategy elements generate lots of work, but few results.
The final focus should be on emphasizing strengths and measuring success, rather than on solving the crisis of the moment and eliminating weaknesses. Only by focusing on the right elements of market, product, business, and people, can you really hope to win. Bigger is not necessarily better. Be the best in your chosen niche and you can change the world.