How will you get there?
Our vision is to become the best, largest, integrated provider of this, that, and that.
Our vision is to become the best, largest, integrated provider of this, that, and that.
Many startups focus their narrative on what they want to become and where they want to get. These include things such as the vision, end-goal, and the “grand prize”. They do this for good reason, it’s important to have a vision laid out and show where you’re going.
But equally important to where you’re going is the question of how you’re going to get there: the products you build first, the markets you enter, and the customers you choose.
In an age where ideas and capital are abundant, where operating infrastructure is available off-the-shelf, and where custom audiences can be targeted, it is the execution strategy i.e. the how, that might contribute most to your long-term success.
What impresses me and attracts my attention is a well defined and deliberate execution strategy.
Let’s take a look at an example.
Imagine a food delivery business, Foodzilla. The business is in its early stages and is pitching to investors.
Foodzilla: “Our aim is to become the top provider for restaurant and grocery delivery.”
Investor: “Great. How are you going to do that?”
Foodzilla: “We are going to do both right from the start, doing this means we can deliver more services to a larger target market. This also means we can get more users and more revenue, which should allow us to get more investment.”
Now, at surface level, this might sound great. But what needs to be addressed here is the efficacy of the plan.
How dissimilar are the services you are aiming to provide?
Will they require different ways of running your operations?
Does each service have a different type of customer?
Will you need different tech stacks?
Will you need different people and partners?
It’s fine — and even encouraged — to dream big. But having a grand destination isn’t worth much if your plan for how to get there doesn’t work.
Two seemingly identical companies might set out to achieve the exact same thing, but what makes one successful — and the other one not — is the staging, order, and timing it takes to execute.
The more you try to do at the same time, the more complexity — and loss of focus — you bring to your business and operation.
Each product you introduce, or market you enter, will have its own unique challenges — these are specific to the use-cases, customers, and competitive landscape. Now imagine trying to build several of these in a short period of time, with each product-market combination uncovering its own set of problems. And now imagine trying to take them all on in your early stages, as you try to find your footing as a brand and product. This can lead you astray.
Let’s go back to Foodzilla. What if Foodzilla decided to first establish a position in the restaurant delivery market only. Achieving success in restaurant delivery first would help it develop a moat: a base of customers, a recurring revenue stream, and an opportunity to optimize its product for a market niche. After a couple of growth milestones, Foodzilla can then risk expanding into grocery services; and in this case, it’s from a position of stability and safety.
Here’s how the different scenarios could unfold for Foodzilla:
Focusing on many product-markets simultaneously
Resources are spread across both restaurant and grocery services
Attention is divided. As a result, both products are sub-optimal
There is some customer overlap, but not all the time; growth and retention are more expensive
Competitors see cracks in Foodzilla’s offering, they aim to quickly fill these themselves
Customers leave because the product is lackluster — for each product, there is a separate provider with a superior offering
Achieving scale, profitability, and new funding proves difficult
Foodzilla considers consolidating. It needs to redefine itself
Focusing on one market at the beginning
Initially, all of Foodzilla’s attention and resources are devoted to restaurant delivery
This product focus finds and fills unmet gaps in the restaurant market
Customers and partners love the superior product, they continue to order
Foodzilla cements a market position serving a niche really well
Foodzilla spreads its coverage to other niches and customer segments in restaurant delivery, it follows the same product refinement process
Foodzilla is now a dominant player in restaurant delivery
On the back of this, Foodzilla decides to launch a grocery delivery service, entering a new market from a position of power
In the second scenario, Foodzilla already has customers using and paying for its services. It has carved a position in the market. Operationally, it has developed a core infrastructure — a backbone — and can now afford to branch out by entering a new market segment — grocery delivery.
In the initial example, Foodzilla would have attempted both at the same time and spread itself thin, with its focus, resources, and brand messaging scattered.
To be fair, there’s a reason we see the former approach. It can have shorter term advantages such as being able to position your business as a larger opportunity to partners and investors. But it adds complexity in that it requires more capital, creates larger expectations, and requires a larger team and multiple products to be built.
As a result, it becomes easier to get your priorities muddled up. Noise and market distraction may also provide false indicators, leading to time spent on the wrong problems, products, partners, and customers.
The key lesson here is that, especially in the early stages, more is not necessarily better, and the order in which you launch products and enter markets matters. Some product lines may only make sense for your business at specific points, after certain milestones have been reached, when you have some buffer and a safety net under you.
So, let me ask, how will you get there?
