Hourglass of Focus

I’ve now been dispensing advice to startups for several years - whether they want it or not.  I’m sure at least some of it is good advice, and I’m equally certain that some of it has been bad.  I try to reflect on my feedback to see if it was helpful.   One thing I noticed is that I’ve given conflicting advice about focus.

At times, I tell founders that they really need to focus more - you need a laser-like focus on your key goals.  Then, other times I encourage founders to do lots of new initiatives which is clearly defocusing.  At first I thought this was all contradictory advice, but in truth, it is not at all.  It is stage-dependent. And it looks like an hourglass.

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Originally posted by publicdomaindiva

At the earliest stages of a startup, the founders are in an exploration phase.  The founder may have a fairly clear vision about what they want to do, but no clue how best to get there.  They will need to do tons of customer development.  The product will be changing every week.  The sales and marketing channels will be complete guesses - trying lots of different things to see what works.  The founder could actually be over-focused at this stage and potentially miss better opportunities that they could discover by testing and experimenting a little more.  Once the product / market fit is established and acquisition channels are better understood, the startup can enter the next phase.

At the second stage, they are in a scaling phase. This is when you’ve figured out what works and you can cut away all the things that were non-critical from the exploration phase.  Product features should probably be cut.  Founders should have a clearer idea about which customer verticals work the best and focus exclusively on those. Marketing spend tends to hone in on the best performing channels. Branding becomes clearer and more focused.  The understanding of the customer is strong and you gain a leadership position within your niche.

And next, startups move into an expansion phase. At this point, you have a core business humming along and growing. The managers in charge of the business are doing a great job improving all key metrics to keep things growing. Hopefully, you’re constantly improving customer satisfaction (NPS) and the business continues to grow organically.  At this stage, senior management attention can start to think about what’s next.  Where will you expand next? Are there adjacent verticals that you should research and consider whether to go after them? Are there additional product components you should be building to own more of the full stack?  This phase is when it becomes okay to stray away from the core business to go back into exploration.  But, you should only be exploring expansion opportunities if the core business is healthy and growing.  

On the other hand, if you feel like you are executing well and the core business is still not growing, then perhaps you’re in the wrong business.  You may have moved to the scaling phase, when in reality, you should still be in the exploration phase.  It may make sense to divert some focus and attention to exploring other opportunities in search of a better business.  It’s hard to make the decision to abandon a core business, but exploring new opportunities when the core is flatlining is the right thing to do.

I shared this concept of the hourglass of focus with Andrew McConnell, CEO at VacationFutures.  He brought up an addition to the metaphor – the sides of the hourglass represent a consistent vision.  Without a consistent vision of where you’re going, you can stray too far outside the hourglass and a lack of focus could be devastating to the company.  You can only stray so far from the core vision.  Remember Icarus!

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