by Lonnie Sciambi, author of “Secrets to Entrepreneurial Success“
It never ceases to amaze me how many small business owners think that having multiple sources of revenue, often across multiple market types is a good business model. Or having products that seemingly have application across a series of vertical markets and attempting to penetrate all of them. They argue that with many different ways to make money, they increase their odds for success. Because it makes logical sense to extend their product reach or to expand their market, that they should do it. Nope! In fact, it’s a really good vehicle to get yourself to a business exit… and not in a good way!
These are folks I accuse of having a business that’s “80 miles wide and an inch deep.” Lots of breadth, no depth. For entrepreneurs, resources are typically not in abundance. So instead of maniacally focusing those resources on one or two key applications where either their product fits well (addresses key pain points of potential customers) or find a niche in which they can be a leader, preferably both, they diffuse those resources across many. Whether that be technology resources creating feature after feature or sales and marketing resources, selling into markets or customer sets that are widely diverse.
Small business success, especially in the early years, is dependent on focus. Yet I have seen countless companies drive themselves from profitability to the brink of bankruptcy, by either over-expanding or thinking they can be “all things to all people.” Focus means finding a niche you can own and then penetrating it, trying to capture as much of it as possible, best leveraging limited resources.
Are you guilty of lack of focus? Here are some considerations that may prove your guilt!
Because you can, doesn’t mean you should.
You’ve added or are adding product features because they’re easy, because you think they are logical extensions of your product line, or worse, because they are “sexy” features that show your technological prowess, all without really determining the market potential or impact.
More is not better it is only more!
You have added multiple variations of product packages or pricing over the last year or two in hopes of creating more appeal across a wider set of customers, not understanding that you have to have a value proposition for those customers, regardless of packaging or pricing.
… And it can also make your coffee in the morning!
Your product has so many features and functions (which you drive home, relentlessly in every piece of literature) that it even sales and marketing people’s “eyes glaze over” as they try to first understand all of them, and second, try to understand how to turn them into customer benefits
Bring me your tired, your poor, your huddled masses…!
You believe your product is so complete that it serves the needs of a broad set of vertical market segments, and you set out to go after all of them, not understanding that you have to have sales presence in all those market segments to even begin to penetrate them.
Focus, focus, focus. That is the essence of success. And the essence of focus is a deep understanding and penetration of niche markets where you can succeed. And, developing and delivering products and their associated features and functions that best meet the needs of the customers in those niche markets.
Doing one thing exceptionally well, is far better than doing many things, adequately!
Lonnie Sciambi, “The Entrepreneur’s Yoda,” is a veteran of more than 30 years in the entrepreneurial trenches as a founder, CEO, turnaround specialist and advisor to small business. He has just published a new book, “Secrets to Entrepreneurial Success“.