The other day, I had a Red Rocket client pitch their startup looking for funding. The pitch went something like this. They were part services company and part technology company. The technology was both an online video platform and an advertising sales platform. They had B2C and B2B components to their sales and marketing plan. Their B2B sales were selling into entertainment, corporate, government and university clients. They had revenues from both product sales and advertising. And, they were convinced they had a game changing business poised for success.
But, all I could think was the founder lacked focus. The skills necessary to succeed vary wildly between services businesses and technology businesses, or B2C marketing vs. B2B sales businesses. And, clients in different industries have different end-product requirements. And, they didn't think of the channel conflicts of both selling technology to advertising companies, while at the same time, trying to compete with those companies with an advertising sales model of their own. It was a mess indeed. And, when I communicated that to the founder, all I got was a blank stare of disbelief.
It is really an easy mistake for an entrepreneur to make. In those early months of getting a business up and running, many entrepreneurs float like dust in the wind, throwing a bunch of darts up in the air, just to see what is going to hit. And, when people are desperate for revenues from anywhere and anyplace to stop their burn rate, they think that is the right thing to do. But, all it does is create confusion for everyone and anyone: both internally with the employees building the company and externally with clients trying to understand exactly what your core strengths are. At the end of the day, to be successful, you really need a very simple business plan in a very targeted market with one key revenue stream. You can't be all over the place, and everything for everybody. Hence, the title of this post: Focus! Focus! Focus!
I, myself, was not immune to these mistakes while I was a first time entrepreneur building iExplore in the adventure travel space. At the same time during the early years of the business, I was trying to build: (i) a leading internet portal website; (ii) an adventure travel agency; (iii) an iExplore branded tour operator business; (iv) a corporate events vendor; (v) a fund raising events management company; and (vi) an advertising sales representation company. It was simple too much, with each business having different requirements, pulling the company in different directions. It wasn't until we laser focused our business around building the largest website in the industry, supported by an advertising revenue base, that the bottom line profits really started to take off.
So, I challenge you to all study your current businesses and make sure it is designed as simply as it can be for long term success and focus. If you cannot simply describe your business in one sentence, it is too complicated.
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