Colin Howe

11 December 2018

Startup CTO - Focus

The second part in my series on being a Startup CTO.

It doesn’t matter how fast you go if you’re going in the wrong direction. It’s even worse if everybody is going in different directions.

Focus, in a startup, will make or break the company. I’m not talking about whether engineers can get quality time to focus and write code without distraction. I’m talking about big decisions. Your company’s goal is to solve a particular problem and make a pile of cash doing so. Are you focused on that?

As a startup, you have one resource that is more precious than any other: time. If you waste time on the wrong work then you have no way of getting that back. As an optimisation problem, if you spend 50% of your time on the wrong work then the most significant performance improvement you can do is stop working on the wrong work.

The lure of the sale

One of the largest risks I see to a startup is the lure of the big sale. A big prospect comes along, and they are interested in the problem you are solving…ish. You can do the mental gymnastics to convince yourself that they’re trying to solve the same problem, but, deep down, you know they’re really trying to solve a different problem. They’re close, but, they’re not the same problems. Be honest.

What typically happens in this scenario is that everyone convinces themselves that they are solving the same problem, or, it’s OK to solve this other problem, because, we will eventually convince the customer that our problem is what they should be solving. Following this, the entire product/engineering plan goes down the toilet and 3-6 months are spent trying to satisfy the prospect’s needs.

If you’re lucky/unlucky (I’m not sure which is better yet) the prospect will sign up with you and give you a lot of money. Excellent, all that work was not wasted, and you can get back on to the roadmap… oh, no, no you can’t. They have more needs now that they’re on board. It’s OK, with that extra cash you can hire a few more engineers and another product manager to work for this customer, and you can try selling this stuff to your other customers. Perfect, you’ve ring-fenced the problem, and you can get back to your roadmap having lost 3-6 months (or maybe 9 months now that you’ve spent time hiring this new team).

A month goes by… the customer wants more. They’re your biggest customer, and unsurprisingly, they’re demanding and need more than just 2 or 3 engineers. They’re threatening to cancel. You move more engineers over. This continues for another year or two before the customer leaves. They leave because you weren’t really building what they wanted whilst you tried to juggle two roadmaps.

I’ve played this out slightly more dramatically than it really happens. The killer is that this usually occurs quietly. It happens time and time again at small companies and startups. This dual focus kills companies. With all the time you’ve spent trying to satiate the needs of a prospect that doesn’t want what you’re building you’ve reduced your investment into the problems you wanted to solve in the first place. Your existing customers get disillusioned with you, and they leave. The end.

In most of the discussions I’ve ever seen around this, I see the ringfence argument applied. What is rarely accounted for is the distraction to the senior management team. The time taken by the executives to go and talk to this client and make them feel loved. The time taken by the head of product trying to balance two competing roadmaps. The mental space occupied by having this additional thing floating about when you want to focus on your big problem.

So, how do you avoid it?

Be honest and assess the situation carefully. Gather requirements, gather data and decide as if there was no money on the table. Take the money off the table and see what conclusion you’d reach. In some cases what they’re asking for is what you wanted to build later on, and you’re mostly just changing priorities. Great!

You’ve got to do your homework when a whale of a prospect arrives. It’s easy to get caught up and think you’re the only company they’re talking to. It’s easy to believe that the problems they’re talking about are real problems and they will shower you with money to make them go away. Just remember, talk is cheap. It’s easy for an exec at a company to say “oh we’re having a problem with blah and we think you can help”. Validate their business case. Make sure it stands up.

What do you even want to focus on?

The other significant risk I see in startups is not knowing what problem they want to solve, or, trying to solve the problem with a scattergun approach. They’re not sure what the solution to the problem is, so, they try lots of solutions and see what sticks.

For example, we want to be the market leader for building widgets. We’re not sure if we want to do B2C, B2B enterprise or B2B mid-size. So, let’s build a generic product that appeals to all of these and see what sticks. I can tell you what will stick: nothing. You will not have built a compelling product for any of these markets, and you will have instead wasted the most precious thing you have: time.

It’s OK to make a mistake in choice of focus if you have a way of spotting it quickly and course correcting. For example, you might do your research and decide that B2B enterprise is where your business needs to be. That’s the most natural market for you to disrupt and you have the right skills to do it. Focus on it. Ruthlessly. Everything else is a waste of your time.

Don’t stop validating that you’re focussing on the right thing. Keep on asking the market about what you’re doing. If you get it wrong, re-assess where you need to be and focus on new problems if needed.

Conclusions

I have seen well run, fantastic companies, lose an entire year of engineering time on the wrong things. The company would have been better off sending all the engineers on holiday and closing the office to save money.

Figure out the problem your company exists to solve and focus on it.

Discussion