November 10, 2021
I sometimes get cautious when I see an early-stage startup with too many products. My favorite number here is one single product. At an early stage, doing one thing is complicated enough.
The luxury of being fully focused is valuable. That shouldn't be given up lightly.
Losing focus might begin with getting the opportunity to sell part of, or something slightly different than the core product, probably to a customer that isn't the core focus. When focus slips, it tends to worsen over time.
A typical example is selling to enterprise customers and SMBs simultaneously. The allure of the idea is obvious. You have developed this awesome product. If you just tweak a few things, you can sell it to an additional customer group as well. That's the entrepreneurial thing to do, right? But more often than not, it's a trap. It seems natural enough that if you first set out to do enterprise sales, when an SMB reaches out, you serve them as well. It might seem like a small matter when you first start serving a few SMBs in parallel, but every small decision can have huge long-term consequences.
Gradually, perhaps, these few SMBs become a non-trivial part of your customer base. Before you know it, you realize that they require completely different distribution channels: Digital sales might work best on the SMBs while the enterprise customers require classic high-touch sales with longer sales cycles. What started as just a few tweaks in your product to be able to serve both customer groups has now turned into you having two separate sales teams with completely different skillsets. Distribution is only one of several potential issues. The same divide can easily happen in tech, product and customer success as well, with parallel skillsets being built up in the organization. For a small company, where resources, mainly in the form of headcount, are scarce, the risk is that you're not serving any of your customers as well as you should.
This doesn't mean putting your head in the sand and focusing only on what you first set out to do. Instead, it means letting go of what didn't work and focusing whole-heartedly on what you belive in the most.