The no. 1 advice for startup founders: focus, focus, focus… Really?
A very common paradigm in the startup environment: focus, focus, focus. Don’t get distracted by the many opportunities to serve other customer segments, other geographies, or to expand your value proposition, …
I have hardly met any investor, nor any product-market-fit or go-to-market specialist, who did not insist on being focused: define your ideal customer profile, go for a niche, say 90% of the time no…
And true, of course: no focus → high distraction → poor performance for your target customers → competitors will take over. No question.
However, some reasons speak against too narrow a focus, for example:
1. Your bet on long-term growth based on initial success could turn out to be wrong. For example, it’s been easy to sell pilot projects, but it turns out that a roll-out is a completely different beast.
2. Markets change fast: If you found a high-growth niche, others will find it too. And existing adjacent players with a large customer base might get interested in covering your niche on their own, with a much bigger sales force. Suddenly, market access and competition may make life so hard that the focus on the niche becomes deadly.
3. Geopolitical or global economic events may change the conditions completely. COVID-19 was one example, putting many tech companies in the travel market at risk (and fuelled others growth, of course…). The rise in interest rates and its consequences for new construction projects in real estate is another deadly example for many tech companies in the proptech space.
In his famous book “Where to Play,” Marc Gruber remarks that too narrow a focus is a safe recipe to run potentially into a pivot zone, because you become blind to bigger changes around your initial presumed product-market fit.
What are your thoughts on this?