“Why do so many entrepreneurs lose focus? The same reason they became entrepreneurs in the first place: ferocious ambition. Entrepreneurs are dreamers; restraint is unnatural.”
An oft-cited study estimates that just two-thirds of all start-ups see their second birthdays, and less than half make it to their fourth.
Whatever the exact figures, no one would argue that scores of budding new ventures die on the vine. One of the most common killers: lack of focus.
With precious few resources to expend, hewing to a specific, well-defined vision is critical for start-up companies. When entrepreneurs attack too many problems or chase too many opportunities at one time, they often end up with nothing to show for it.
Why do so many entrepreneurs lose focus? The same reason they became entrepreneurs in the first place: ferocious ambition. Entrepreneurs are dreamers; restraint is unnatural.
When it comes to staying focused, here are some lessons to keep in mind.
Perfect One Idea First
Start-up Internet company Kiko was off to a terrific launch in 2005. The online calendar service was attracting high-profile investors, impressing industry luminaries and garnering fantastic press with its new product. By all accounts, Kiko was ready to take off.
But instead, a year later, the company went from being at the top of its game to being auctioned off on eBay for $258,000. What happened?
Many speculated that Google‘s new calendar service spelled Kiko’s demise. But if you ask the founders and investors behind the company, it wasn’t just about losing to Google. It was also about losing focus on their product.
“One of the reasons Kiko died was that the founders spent several months working on another project,” says YCombinator’s Paul Graham, a Kiko investor. “If they’d spent those months working on Kiko instead, they might have been far enough along to withstand Google calendar when it came out.”
Graham admits that focus alone may not have been enough to survive Google’s onslaught, but it would have given Kiko a fighting chance.
Don’t Attack Too Many Problems At Once
Face it: You don’t have enough money, time, brains and limbs to fix everything that’s wrong with your company. That’s why you have to focus on the handful of issues that truly demand attention.
Jessica Livingston, author of Founders at Work, has profiled dozens of start-ups. Many have struggled to maintain their focus–even companies that eventually sold shares to the public.
Take TiVo. In its formative years, TiVo wanted to build a network server that could provide an array of home-media services, from movies to music. Soon enough, writes Livingston, the company realized its snazzy box would not only be complicated to install, it would be hard for customers to understand. TiVo’s decision: Focus on one killer application and branch out later on.
That “killer app” was the digital video recorder, or DVR–now a market unto itself. TiVo’s current market cap: nearly $600 million.
Identify The Real Opportunities
Sometimes the challenge is not focusing on one value proposition, but being flexible enough to recognize when another is more compelling. It’s not uncommon that entrepreneurs find their greatest opportunities in products they didn’t even realize they were building.
Flickr, the popular photo-sharing site, started life as one feature of a totally different concept: a multiplayer online game called “Game Neverending.” Soon the developers started noticing that their photo-sharing feature was stealing the show.
The founders knew they didn’t have the time and resources to work on both opportunities, so they shifted their focus (with some regret at the time) to Flickr. Good move: In 2005 Yahoo! shelled out a reported $20 to $30 million for Flickr, now the cornerstone of the Web portal’s popular photo-hosting service.
Stick To What You’re Good At
Yes, the world is full of opportunities. But the key to making money is recognizing the thing you can do better than the competition.
In his book, Focus: The Future of Your Company Depends on It, author Al Ries describes how behemoths like Dell Computer, Home Depot and Best Buy have all built powerful franchises based on one simple concept: being good at one thing.
Like your high school English teacher said: “Keep it simple, stupid.”
Wil Schroter is the founder and chief executive of the Go BIG Network, a leading community of start-up companies.