Many times I hear founders saying “this other competitor from Germany raised 5M for only a feature of our product while we have these 5+ features and raised only 200k”. Well, that’s great, this shows you can deliver a product. But can you strategize?

Maybe your focus is not there.

Why focus

To do well, you need one very good solution that is 10x better than competitors’ for one specific group of customers. You don’t need 5 products that are each 2x better. Have too many nice to haves and you’ll dilute the core. That applies to early stage. Sure, once you’re big enough you’ll be able to diversify in some many areas. Think Amazon - starting with selling books online but now providing cloud services.

And when I say focus, I also mean industries you’re after, countries you’re targeting, go-to market motion. It’s not only about the product. I would actually argue it’s more about sales & marketing. Focusing on a specific customer segment leads to faster feedback loops, stronger customer relationships and tailored approaches that resonate with them.

Competition is so tough these days. And as an early stage founding team you have limited resources. That’s why you have to focus and be the best in class at your one single thing for which you can show efficient strong traction.

Limited resources

If you go too wide, you’re going to lose valuable resources - time & money. Just as a personal example - at SeedBlink, one of the best things we did at some point was to refocus. Even sales people did not know what they were selling anymore because we were doing too many things at once too early. And I’ve seen that with other companies, too.

When you’re at pre-seed, seed & series A you you just don’t have the luxury to make many mistakes. Clock is ticking and if your sales rep who you spent 2 months hiring & 2 months training does not catch any of the 5 rabbits he’s after, you’re already in a tough position. Multiply that with a few other hires you made and it’s worse.

Culture & fundraising

That does not only impact your burn and metrics, but has a large impact on the company culture too. Too wide can make employees collaborate less and when things don’t work out you’ll see them pointing fingers at each other. Productivity goes down.

Focus and simplicity will also help you fundraise. Not only that investors will quickly understand your business (which will allow you to get into deeper conversations faster), but you’ll most probably have better numbers and show you’re a good planner, too.

Case studies of successful, focused companies

•Amazon started by selling books online but has since expanded into a global e-commerce giant and cloud services provider;

•Slack launched as a messaging tool for small tech teams but is now widely used across industries;

•Facebook began exclusively for college students, but now connects billions of people worldwide;

•Netflix initially focused on DVD rentals by mail but transformed into a streaming platform and content creator;

•Airbnb started by renting out air mattresses in single apartments, but now facilitates stays worldwide, from shared rooms to luxury villas;

•etc.

Final note

Focus is key, but customers always lead the way. Listen and iterate based on their feedback. And ask yourself: “Do we have a clear target customer? Are we trying to do too much too soon?”