“Do not try to do everything. Do one thing well.”-Steve Jobs
Think of your favorite company. What do they do? Could you explain it in a few words? When you think of the great startups and successful companies, we can all summarize in a few words what they do for us.
- Amazon-deliver anything to your door
- Snowflake-connect your data seamlessly
- Southwest-fly you there cheaply and efficiently
As a leader, are you able to distill your company’s offering and goals into a single sentence? If you can’t define your product, how do you expect your employees to choose the path that moves you forward?
We’ve all encountered the street hustlers who can get you everything from cab rides to “Rolex” watches to fresh fruit. Do we trust them? — No. Are we likely to buy from them? –Definitely not. The same holds true with companies. The first company I led refined its product offering from 8 to 3 and doubled in sales in 3 years. The next company couldn’t decide between chasing revenue and chasing its stated product; fast forward 2 years and $30 mil later, and they never landed a single enterprise customer.
Over the last 10 years I’ve seen a variety of choices by founders and CEOs and success boils down to this: do one thing, and do it well.
First — Customers call you to solve their specific problem. What is your product? Can your customers define it? Customers want to feel confident that you are skilled at solving the particular issue they have at hand. Generalists may lack the deep knowledge and specific tools to solve the problem quickly. Amateurs have to learn as they go. Experts have done this one thing before, probably hundreds of times. As part of my current role I am managing 4 different law firms, because the attorney handling our options is not the one I would ask about our leases, and the specialist on warehouse bailment is not an expert on corporation law.
Second — Negative space and the power of not doing. Everything has an opportunity cost. Adding a new area of expertise or new product line forces top leadership to split their time between two great ideas, rather than just one. A CEO working 3000 hours a year is now a 1500-hour CEO to two different products, rather than a full-time champion of one.
Third — Never pivot on a whim. Sometimes you realize you’re going down the wrong path, or the voice of the customer becomes so loud you need to change your model. What you should never do is jump to the next product because “this one isn’t selling.” Chasing the customer puts you back in the realm of street hawkers and generalists. Look at the data, breakdown the sales cycle, understand the why and then move forward. The worst example of this I’ve seen came when the product and sales teams couldn’t agree on what the core value proposition was. Each customer was offered a custom solution to win the sale. Rather than “build one, sell many” we built many and sold one. That company didn’t last.
Fourth — Be the snowball. There are so many network effects from being an expert at one thing. Customers seek you out rather than you seeking the customer out. Adjacent suppliers, once they realize you’re not trying to compete with them, become referrers. Your customer acquisition cost falls through the floor. With a stable pipeline of business, you can focus on how to work smarter, rather than how to win the next sale. You develop a brand, and through brand achieve defensibility. Once the snowball starts rolling, it becomes an avalanche. Leading the sales team at my first company, we went from 3% YOY growth to 20% YOY, and sustained it for 5 years, by building a clearly defined brand & expertise and owning the vertical.