Declare what you are NOT working on

How to focus by saying "no"

Sometimes the best thing in the world comes around, and you and your partners (or your inner voices) have a heated debate. On the one hand, this is a great deal that could really change your financial trajectory, on the other hand, it requires a serious change in your focus and you already feel understaffed.

“I'm not confused, I'm just well mixed” - Robert Frost.

I love focus frameworks - OKR’s (Objectives and Key Results), Product Roadmaps, Iterations (I hate the word “sprint”, startups are a marathon!). But then again, we constantly have to learn from our customers, aka micro-pivot. So we’re in this constant balancing act of sticking to our vision while adapting to the market.

And so, once in a while, a client comes around and offers you the perfect deal… for them. You, on the other hand, will have to gracefully perform a contortionist act to meet their needs.

“if you find yourself in a hole, stop digging”. - The first law of holes.

I’ve cultivated a phrase in the past few years, and when I say it to a seasoned entrepreneur, they’ll usually get a somber look of reluctant acceptance. We’ll be in the middle of a conversation where they had to make a very hard choice, and I’ll say - “a startup is a venture that has to give up on a lot of good opportunities in order to stay alive”.

I’ve had (very loud) conversations with business partners, that even though we got an offer that is hard to refuse, accepting it will most surely kill us. I’ve actually been in ventures that died from such wrong choices.

I’ll try to illustrate. You have a great Todo app that has initial strong traction with soccer parents in the USA. You’re agile and customer-obsessed, listening to your clients, and making constant improvements to build a moat around that segment. This traction allows you to hire a couple of team members and really start to move fast. Your co-founder notices a weird set of users - lawyers. You have about 50 lawyers who are using your app - most of them, soccer parents who are lawyers, some of them just referrals. This group is bringing in some cash, but they’re not really growing, because they are churning like crazy. This small subset is flooding your support with requests for features, and bugs that they’re uncovering with mostly unused features.

Your instinct is screaming “We can double our revenue by going into this market!”.

Some points you might raise in favor:

• This is organic growth that you’ve literally invested nothing in.

• You are struggling to make ends meet and this is a huge segment that can really push your revenue up into the right.

• They’re actively telling you what they want - you could easily reach product-market fit.

• It’s a Todo app. It could be for everyone!

“Well Yes, But Actually No” - Pirate Captain, So You Want to Be a Pirate!

The worst thing you can do is to lose focus. There are a million Todo apps. Most of them are failing wildly with dust-covered landing pages. Some of them are Todo apps for everyone with a huge market share. Your employees<10 startup is no match for those.

But you did do something right - you found your segment, and you dug deep.

Let’s smash some cliches!

It’s free growth!

Nope.

It’s not growth if your customers are churning. It’s actually the opposite of growth. Your soccer parents are staying. Their churn is minimal and they are referring more and more clients. Some referrals are a mistake - yes, you read that right, a mistake!

Think of your app like a minivan - It’s awesome for a soccer parent who has to get kids around, and if they refer this car to their colleagues who have kids, that’s a great referral!

Now they go to visit their 20-year-old cousin who’s obsessed with Tinder and one-night-stands. Do you really think they should recommend the mini-van? I didn’t think so.

Growth is only possible if you’ve reached product-market-fit. If not, you’re pouring liquid money into a bucket full of holes.

More revenue with the same app!

Nay.

There’s a reason soccer parents are using your app and not one of the Todo apps for everyone. You’re not as good as them, for sure, they have an army of developers building features. But then again, your soccer parents want something very specific for them, that would probably be “not it” for other segments. And that’s why you’re winning against the incumbent. And the chances that those lawyers want that same special spice that got you the soccer parents is infinitely small. Most likely if you try to please both markets, you’ll build a hybrid horrible Frankenstein’s monster that pleases neither of them.

If I listen to their VERY LOUD complaints, I’ll achieve product-market-fit

Yeaaaaah no.

They were never really your clients. Someone duped them into trying something that’s wrong for them, and they’re very loud about their disappointment. Knowing which clients are not your clients is really important. You’ll never please them and drive your business into the ground trying.

It’s a Todo app. It could be for everyone!

Yes, someday, but not today and tomorrow isn’t looking that good either.

I’m not saying your Todo app isn’t going to be number one someday. But c’mon. You just got started. You’ve barely scratched the early adopters. The late adopters are going to be cranky whiny babies compared to your clients. You’re going to need more than 100 employees in various roles that you haven’t even thought of yet to please a huge market. Grow your business organically - and I mean your skills and employee roster, not just the amount of clients.

Final thoughts

When you finish setting your goals/KPIs/OKRs or whatever version of focus works for you, make a very comprehensive list of what you’re not doing. That makes it really easy to pass on “great” opportunities that will make your business emulate the Titanic.

Once you start growing you can consider expanding your market, although usually the smartest thing to do is move upmarket, but that’s for another post that will be written on some other day:)

Did you ever take a “great” deal that cost you your health and business?

I’d love to hear more about it!

Photo by Priscilla Du Preez on Unsplash