You see a competitor doing something. That "thing" seems to have traction. It sure would be nice to be able to do something like that for your business, right?
I call this Shiny Object Syndrome, and many of us business owners can fall victim to it—and perhaps have on more than one occasion. We could start thinking more is what we need instead of focusing on what we’ve got that people already love. More isn’t always what we need when it comes to growing a business.
In fact, less can be the key.
I sat down with three leaders who are no strangers to dialing back and narrowing focus in order to foster growth: Steve Schultz, who leads new growth channels for Intuit’s Mint Bills; Tim Hayden, co-author of The Mobile Commerce Revolution and head of TTH Strategy; and Jason Mendelson, managing director with Foundry Group, a venture capital firm. Here's what they have to say about focus, and whether going niche could help your company get more done for the people who matter most.
When going through a growth phase, how can a lack of focus impair a company’s growth potential?
Steve Schultz: It’s difficult to execute when we’re not focused. First, when our people are spread thin, there aren't enough hours in the day to deliver against necessary tasks. Things get backed up, we have bottlenecks all over the place and the shouting starts. Secondly, continuous context switching doesn’t allow our teams to do their best work. When a group or individual is spread across multiple projects, they do just enough to get the job done. When we’re focused, we ask more questions, experiment more and dig deeper into our data.
Tim Hayden: Growth requires focus. The major focus for many businesses shouldn't be on acquiring new business, but understanding why your current clients bought in the first place and what has kept them happy. Focusing on retention can lead to repeat business and some new customers, instead of trying new and unproven messaging, tactics or branding to attract customers you don't have.
Jason Mendelson: Growth phases are generally harder to succeed than when a company is stagnated. Growth means a lot of new people, a lot of new projects and a lot of new demands put on the management team that they've not had before. It's important to keep every employee focused on their particular job while management must learn to juggle more balls in the air.
What’s one way you’ve personally experienced the benefits of a narrowed focus while experiencing a growth phase?
Schultz: Check [now known as Mint Bills] started out as a mobile personal finance tool. We added the ability to make bill payments to the product in 2011. There were many directions we could have taken the company, including new personal finance tools, building an ad platform, expanding to the Web and going international. However, we decided not to make any of these investments and instead to double down on being a great mobile payments company. Americans make $4 trillion worth of bill payments per year, and we felt this was our best growth opportunity. To be great at digital payments, we would need to focus at the expense of other opportunities. From that point on, we asked if projects supported growth in our payments business. If no, we’d move on. If yes, we’d add them to the priority queue.
Hayden: Focus also means being free from distractions. One of my clients had a proven product and a growing sales pipeline, with great aspirations to build new features and take their SaaS [software as a service] in a different direction, based on a "hunch" from analysts. It was through asking a few of its current customers what they loved most about the company, instead of listening to a third party's opinion about going wider, that resulted in growing revenues with current customers by more than 50 percent in the next quarter.
Mendelson: A company in our portfolio was deciding whether or not to go international. We were worried that this lack of focus may allow us to lose our way or our advantage in the States. In the end we decided to double down in the U.S., ignore the foreign markets and not only succeeded in doubling revenue, but also managed to find an even larger U.S. market than we thought we might have.
What are the biggest mistakes you see brands and companies making when it comes to focus in their work; e.g., too wide, too niche, lack of any focus?
Schultz: I see companies, including mine sometimes, get too focused on the small stuff. Massive focus on small problems does not deliver growth. In the software business, for example, we sometimes fall in love with a product feature and want to make it perfect. In the meantime, we’re missing the opportunity to solve the big problem.
Hayden: Every day, I see some of the world's largest consumer brands ignoring the data and observations put right under their noses by current customers. At the same time, I firmly believe that many companies have invested too narrow a focus on certain business processes and technologies, only to find themselves without the budget and the bandwidth to pivot with new market demands. It is a slippery slope, no doubt.
Mendelson: Too wide, hands down. At most, a company can pursue one to three new ventures at a time, with the vast majority being able to do one and do it well.
If you could emphasize one positive aspect about a narrowed focus for growing companies, what would that be?
Schultz: I think the single biggest benefit of a narrowed focus is alignment inside the company. When everyone is headed in the same direction, big things can happen. Check started with $0 in payments in November 2011 and within three years we were doing nearly $1 billion in annual payment volume. We couldn’t have accomplished this without a narrow focus.
Hayden: There is always the benefit of "getting it right." The concept of a minimum viable product is not limited to startups or technology or mobile apps. Those companies that understand “good enough” and then innovate or develop new products from those efforts for growth [can] last longer and grow larger.
Mendelson: Less drama with human capital, as communicating expectations and strategies are easier. That might sound oversimplified, but one challenge a company can certainly do without is drama with the team expected to help it grow.
What is the biggest lesson you’ve learned about using focus as an asset for brand, product or overall company growth?
Schultz: I’ve learned how to say “no” much, much better. Saying “yes” is easy and makes everyone like you, but it’ll quickly run a company into the ground. In a small business that’s growing fast, it’s tempting to take on more and more—whether it’s a new product, new vertical or new sales channel. To excel at something, it takes enormous time and energy. There are no shortcuts, so I have to be convicted. If I don’t have conviction, then it’s a “no.”
Hayden: We live in a society where opinions and ideas float in the wind. Having focus and maintaining a clear and open focus is paramount to battling distraction and preventing missed opportunities. From a simple daily to-do list to the weekly team "stand up" meeting, building accountability for yourself and those who work around and for you is paramount to a business succeeding in a world that is anything but certain.
Mendelson: I've never been in a situation where we’ve look back and said, “Wow, I wish we hadn’t been so focused."
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