Most startup founders know speed is important. But speed in the wrong direction may be worse than going too slow when it comes to developing a new software product.
Veteran startup CMO and former marketing head of Google play Patrick ‘Mad’ Mork tells how focusing on the wrong thing killed his startup: “When I was at GetJar in 2010, we had to rebuild a large part of the platform from scratch. We had grown too fast and had made a number of obvious mistakes when it came to scalability. We lost at least a full 12 months rebuilding our systems, when we should have been focusing on other changes that were happening [in] the market. That mistake, among others, eventually doomed the company (along with the $40M we had raised in VC funding).”
In the first of this three-part series demystifying startup failure, I talked about the concept of speed when it comes to building your team. Today we’re going to dive into the concept of focus and how it relates to speed for a startup.
First, point the compass in the right direction
Startups are intended to grow fast. They race to launch quickly, aiming to reach product/market fit before running out of cash. After that, growth rate remains critical in valuation and is also an indicator of whether or not a startup will make it past a few years, according to the study Grow Fast or Die Slow by McKinsey & Company.
When you consider speed in relation to focus, it becomes clear that simply moving fast is not enough. You need to make sure your compass is pointed in the right direction before you speed ahead.
Many a failed startup founder has admitted in hindsight to running out of cash because they lacked focus - or focused on the wrong things. It turns out that the art of regulating speed is a crucial leadership skill.
Focusing on the wrong things
Questions around how to spend funding can cripple a startup before it reaches product/market fit.
A recent report by CBS Insights listed “running out of cash” as the second biggest reason startups fail. These startups, comprising 29% of the 101 startups examined, were unable to find the right focus and simply ran out of time.
Focusing on too many things
Most startup software products hope to launch with an MVP (minimum viable product) and then continue to improve it. But focusing on those few critical features may be easier said than done for some founders.
Focus comes from the ability to step back and point a laser at the things that will yield the highest growth. When it’s your baby you’re creating, it can be hard to let go of a complete feature set you envisioned. Just know there’s a time for building out features - but it’s not before launch or market validation. That’s a sure way to get yourself outcompeted.
Switching focus too slowly
Not pivoting away or pivoting too slowly from a bad product, a bad hire, or a bad decision was cited as a reason for failure in 7% of startup post mortems. Founders also said this ability to see when and where to redirect efforts helps avoid burnout, which can be an important factor in the early stages.
How to know what to focus on at your startup
Focus on the solution not the features
In our scoping workshops and in our consulting work, we recommend the lean canvas/lean business model for software startups. This framework helps highlight the most important items and keeps them front and center. Literally. It’s a one-page document - concise enough you can stick it on the wall to help keep all your team members aligned.
The Lean Canvas keeps you focused on the problem you’re trying to solve, rather than the features or functionality you want to build into your product. If you haven’t created a lean canvas for your product yet, let us know and we can point you toward some great resources.
Stage influences your startup’s focus
The stage you are in will impact your role as founder, your team composition, and where you focus attention and resources.
There’s a big difference in focus before product/market fit and during the expansion or growth stage.
In the early days, you’ll be concerned with keeping your burn rate low, designing a prototype, and then building an MVP. After you achieve product/market fit, you’ll be able to use a standard set of metrics to help guide allocation of resources.
Knowing when to focus on what is critical when you’re creating a new software product or launching a startup. Get our Power Checklist to help you focus you on the right things at the right time.
Find and listen to your market
You’ve got limited resources to make it all happen, and you need to be sure there are people who want what you’re building. (Or, rather, that you’re building what people want.) Market validation may prove the biggest indicator of where to focus efforts when it comes to building your startup software product.
Next time we’ll talk about how you can build market validation into your product development roadmap to keep your startup nimble and focus on the right things.