Great article! One thing that never fails to amaze me is how early stage companies or startups get sidetracked by inquiries from larger media companies or potential partners. Without fail, once a startup releases their press release that they have opened their doors, a larger company will contact them about a biz dev deal and the startup will solely focus on that. 9 times out of 10, that biz dev deal never comes to fruition but the startup wasted 6 months chasing that unfocused dream. Stick to your guns, focus on what you're doing and if there are things that happen parallel to you - make them happen... do not go perpendicular.
Darren: This is an excellent point.
That whole partnership/bizdev thing in the early stages of a startup can be hugely distracting (and rarely does it actually amount to something useful).
It's hard to resist the temptation, because the story sounds good (and startups are sometimes desperate to try and break-through the early credibility barrier).
The only case I can think of where this might not apply is if you're making a tool that can do lots of things. The canonical example would be the computer itself-- it can do spreadsheets, games, word processing, web browsing, scientific data crunching, multimedia, etc. But such products are rare. If you are a startup, there is a 99% chance that this advice applies to you and a 1% chance that you might be different.
Very useful post Dharmesh!
Worthy of Digg and Reddit!!!
Critical point!!! I absolutely echo the need for focus at all stages. Here is a fairly simple way to think about product focus that makes for a practical requirements tool.
Envisage a three-dimensional spreadsheet. Label each axis with (say) customer type, focus area, and features. From this enormous cube you need to pick the slices that will define your focus. The practical test is to define the experience within EVERY cell.
In the imin.com example: the customer type is perhaps “gender-specific groups”. The focus area is “recreational group travel” and features are “create group”, “plan”, “photographs” etc. At first glance it seems they have picked only a single slice from two dimensions eliminating thousands of cells. A quick look at the create group page reveals the danger of abstraction. In reality males and females are different and have different preferences. Group size plays a big part in travel options. On imin.com, the “Create Groups” page offers choices for males, females, other and for four different group sizes. They really have 3 x 4 = 12 focus areas before applying the feature dimension!!
The team must understand, describe, write content, build, market and support EVERY cell of this matrix. Covering a whole row or column by some abstraction, as you point out in your post, isn’t enough. If there isn’t something unique about every cell then the solution is unfocused and is likely ineffective. Obviously this is a multiplicative problem and limiting the number of slices dramatically reduces the complexity.
Excellent and (for me) timely piece. I'm 2 days into a "1 day" side project that I thought would be fun but has no bearing on my core business. Time to cut the cord.
The funny thing is, I consider myself very focused when it comes to product itself. I target a very specific niche. But... I seem to forget about that when it comes to advertising and SEO.
A big reason to stay focussed is that it gives your small startup a chance to appeal to customers in a way that big, established companies will or do not. Find the niche underserved by - or too small to warrant attention from - big competitors that are potential competitors. A niche like that is the number one success factor for a small startup.
Once successful in that niche, grow by finding the next vertical market for your product and focs on that.
Very astute observations, Dharmesh. I'm curious to know what you would say to the founders of eBay if they pitched you in an elevator.
In the case of our fledgling startup, I continuously hear the criticism of being *too broad* (thanks, pg).
Personally, I've embraced the "big market" perspective because (1) like eBay, our technology can easily be replicated to serve the needs of a diverse community of buyers/sellers, and (2) as with most brick-and-mortar examples of "one-stop shopping" (grocery stores, Amazon.com, etc.), being broad increases our chances of satisfying a large, diverse pool of interested buyers, while satisfying the long tail.
But I am never one to follow my own a priori theories on what customers want. Perhaps I should ask them...
Ryan - is akopa to be replicated by your customers or by you? In the case of companies building a tool to be used by other companies - especially other IT folks - then I think it's ok to be broad (e.g. present a platform upon which something specific and targetted would be built). In the case of consumers, it gets more difficult to present something with the message "here it is - let's see all the things you can do with it". This second situation is where online spreadsheets find themselves, I think.
Disclaimer: *my apologies* for making one last self-serving comment. But to answer your question, Scott, I'd recommend taking a look at Etsy.com. Maybe this could give you a concrete example of "akopa-in-practice" and serve as a provisional answer to your question. Would you consider Etsy to be a focused startup? And furthermore, do you think *focus* gives a startup sustainable competitive advantage?
Awesome post Dharmesh. Our plans for world domination (aka blind ambition and naivety! ;) ) can often lead us to fall into the trap of aiming for a broad product. There is nothing wrong with this if your R&D budget is large enough to buy a chain of tropical islands.
I came across a similar post also addressing the importance of focus, well worth a read -
Dharmesh and Ryan -
Great post Dharmesh. Ryan - I think I'mIn and Etsy are both good examples of focus. In my mind, Etsy seems to have received the focus that Dharmesh was referring to. A platform or expertise can, I believe, be used across niches, but just make sure that your org. has the resources and bandwidth to provide *focus* to each of the niches at which you have aimed a version of the platform. I think a good strategy is to deploy a product or platform or organizational processes, etc. to one niche, and then as you learn from that experience, target other niches. You may have plans to be everything to everyone, but target customers don't need to see that aspect. Seems like I'm preaching to the choir here though!
Great article, my website has this exact problem
Targets many countries over many subjects = not enough focus.
Woooh. I want to start a startup like GOOGLE, YAHOO, FLICKR, YOUTUBE did many years ago. Now, half of employees are millionaire. We should do the same too... Conquest. Winner takes all !! Destory their idea is art of winning competition.
Microsoft, APPLE, Orcale created wealthiest employees. Startup should be fun too.
u guys are very generous with your time and attention;
sites like yours plus the authorial response and permission to reprint- wow, then rewriting a huge proportion & OFFERING IT up in an online dialogue. just to help? to establish community! great karma such as this flies in the face of farm/splod extortionists who are basically saying fuck you to those of us nurturing new markets, making alliances, giving thought to the future. the mindless under the radar phrase generators whose output fill my mailbox- a mac even- w/ a 9 to 1 ratio- fake to real. i'm mad as hell.... at the farm and splog swineherds. anti existentials, society & community and tech impede to hell by their massive corrosives subsuming the hell out of the servers and pipelines, then online potential and ability to actualize.
they won't stop me- just flay me. when i get to point c, the resources sufficient to bunghole these whatevers, is mine. mine. ha hahaaaa.
i had to vent. forgive.
post rant scriptum-
boy, do i have the start ups. they break all the rules and in doing so achieve first notoriety, then controversy then the- oh i see; s w/ nary an apology "e'er heard
anon in the halles and hous'es o' commerce an' trade'
substantive content is lacking in my post. total absence. truly sorry. next time... facts figures, percentages, reportage- et al. this launch is hard work.
very very hard. and when a real film director says that, you know the scales are accurate
Nice read, Dharmesh. I found your blog tonight and have already read most of your posts.
There is truth in this need to “focus” for every business, online or not. We feel we are leaving money on the table by not offering a huge menu of services to our potential audience. In reality, we give them the impression that we have no specialty thus diluting our overall message. The “jack of all trades, master of none” cliché is great for a handyman service, but not so impressive for other professional services. Would you use an accounting firm that also lawn care and wedding photography? (don’t laugh, I have seen this…)
I would be interested in your opinion on a recent distraction at our company. Our business is built on the “build it once, sell it many” ASP-like model. We are still in the “start up” phase, but have seen some recent success and growth that has garnered conversations with some fairly large potential customers wanting some custom solutions. This is exciting for us, and a great problem to deal with, but with our “focus” being building a platform that earns ongoing revenue with little overhead, this temptation becomes more complicated.
In the “pros” column, we have (1) the opportunity for what I would call “project work” or “professional services” that will certainly help our cash flow in the short term; and (2) We add a few big names to our customer base that will have a ton of PR mileage and opportunity for future work.
In the “cons” column, since we don’t have the staff this project work will shut down development of our “focus” work until these projects are completed, delaying new revenue-generating services and enhancements.
This is a bit different proposition compared with the above-mentioned biz/dev temptation since we are talking about an offer for a paying project, although one that is not an ongoing revenue stream. Is it worth the trade-off?
Excellent post and fascinating discussion. We started our company out as a consumer focused podcasting creation and publishing site with a secondary focus on being a podcasting platform for publishers (business, media, etc.), and we're now narrowing that down to just business in a specific industry, then a sub industry of that industry.
It's been an interesting process. The desire to go broad is very strong (it can do so many things for so many people!) and the distraction factor from the one-off bizdev deals from the big guys (you can be on every one of our X million of set-top boxes, or, you can reach all the internet users in China!) is exceptionally distracting.
The problem with the (first) consumer approach is that you can't really ever get focused if your audience is everyone. You become obsessed with gaining eyeballs and keeping up with competitors features. Revenue? opps...
And on the second, the bizdev deals from big guys: you're reduced to being a for-hire supplemental development group for a big corporation. I think this one is the most dangerous for an early stage startup. The dollars they'll pay seem big when you have little or no revenue, but to them, it's not much money and really just cheap development. Unless your bootstrapping, best to let those one-off deals with the big guys just go on by.