Although I have written about the need to focus and personally always try to, it is much easier said than done. I recently came across a blog post from VC Mark Suster, Why Great Executives Avoid Shiny Objects that does a great job of stressing the importance of focus on the important. One quote by Suster drives home the problem, “many leaders fall into the trap of doing too many things but not accomplishing enough.” Suster makes the point that it is most important to complete the important things, not to start a lot of things.
Suster points out that while it is great to talk potential deals with a dozen companies or interview twenty candidate for a position, actual value is driven when you close a deal or have a candidate start at your company. Suster uses the graphic below to differentiate what is important.
The top of the funnel is what he describes as shiny objects. They are activities that make you feel and appear busy, often make great conversation items with your boss or at Board meetings, but in and of themselves do not create value. While you do need a funnel so you can eventually achieve the important thing, you should not spend a disproportionate amount of your time on it. As Suster says, “having interesting and frequent opportunities at the top of your funnel is important, of course, but the ultimate score is only measured on the bottom end of the funnel.”
Executives do not always pursue the top of the funnel because they do not understand the relative value, it is often the path of least resistance. It is relatively easy having a first business meeting and showing your Powerpoint or talking to someone you met at a conference, while analyzing a potential deal and negotiating the final agreement is very hard and time consuming. Sometimes people focus on the top of the funnel because it makes them look busy but is actually the easy route.
To truly succeed, and make sure your people succeed, you need to be “obsessed” with the critical tasks as Suster is. It’s why he “[is] willing to disengage at times from the flurry of ‘activity’ because when [he has] something that needs to be finished the only way [he] know[s] how is maniacally focus on the bottom end of [his] funnel.”
You should build your own funnel, analyze your activities, and make sure you are spending most of your time on the Bottom End of Your Funnel, my guess is you will be amazed at the results.
- Many leaders fall into the trap of doing too many things but not accomplishing enough.
- While it may be great to talk about all the business leads you have or candidates for critical positions, you only create value by doing the hard work, closing the deal or bringing the right candidate on board.
- To truly succeed, and make sure your people succeed, you need to be “obsessed” with the critical tasks.
When I recently updated my OpenTable app, I noticed they incorporated a partnership with Uber in which you can request a car when looking at an upcoming reservation and the car would already know your destination. This partnership between Uber and OpenTable is a great example of strategic thinking by both companies. I wanted to comment on it as I think all companies can learn some key lessons from the initiative.
I came across a great blog post by Brian Balfour, “What Blackjack Strategy Teaches us About Growth,” target=”_blank” that does a great job of illustrating the power of focusing your growth efforts rather than chasing diversification. Balfour, a co-founder of Viximo and former Entrepreneur in Residence at Trinity Ventures, draws parallels between the crux of good strategy in Blackjack, doubling down (double down on an 11, and sometimes on a 9 or 10 depending on what the dealer shows), and how it should be applied to your growth strategy.
In blackjack, you follow this rule rather than saving your resources for another hand and diversifying your risk. He explains the logic behind this strategy: With a 9, 10 or 11 you have data for that hand that it is “working.” Thus, you have a higher probability of optimizing your winnings by focusing more of your money on a hand that is working than diversifying on other hands that you do not have data on yet.
Application of Blackjack to growth
Balfour points out that many companies work hard to get a growth strategy or tactic to work. Once they get one working, the first instinct is to then find another channel to add to the mix. He argues to fight this instinct and learn from Blackjack: Double down before you diversify.
First, it is important to understand the driver for growth. Growth is a function of (probability of success, impact and resources required). This formula means growth occurs by balancing the probability of success for an AB test, the impact it has if successful and the resources required to implement. You then focus on opportunities that have high probability of success, high impact and low resources required.
I read a great blog post by Y Combinator Co-Founder Paul Graham that showed why start-ups need to focus on activities that do not scale. Graham debunks the theory held by many start-ups that if they build a great mousetrap, customers will flock to it and if customers do not, then the product must be a failure. He points out that startups succeed because the founders make them take off (with a few exceptions).
Graham starts by pointing out that the most frequent non-scalable activity founders do is recruiting users manually. New companies cannot wait for users to find their product, they need to go out and get users. This could be by going to friends and family. It could be by going to other companies that you network with. It could be by knocking on door after door.
There are two reasons founders resist going out and recruiting users individually. One is a combination of shyness and laziness. They’d rather sit at home writing code than go out and talk to a bunch of strangers and probably be rejected by most of them. But for a startup to succeed, at least one founder will have to spend a lot of time on sales and marketing. The other reason founders ignore this path is that the absolute numbers seem so small at first. 10 more users may not seem like a big deal for someone who has just watched The Social Network, but if it moves you from 100 to 110 users in a week, that is a 10 percent increase. Keep increasing 10 percent every week and then they will be making movies about you. Continue reading