If everything is a top priority, then nothing is a priority, and nothing will get done. This is a tough lesson, but all successful business owners eventually learn it. Many startups are particularly susceptible to the idea that they can serve this market, and that market, and those people over there, and these groups over here, until their message and brand become so confused that nobody knows what they stand for or who they actually serve. When that happens, the message becomes so confused that the business usually fails.
Many established businesses have a reasonably well-defined target market and brand, but can’t decide what their other priorities are. Should they focus on customer service, or product quality, or sales, or marketing, or innovation, or something else? Obviously everything matters to some extent. No company can stay in business without reasonably good sales, marketing, products, customer service, etc. However, while great companies have to be good at many things, they only have to be great at one or two things to really stand out. This is one of the themes of the classic book “Good to Great”.
Tesla went from a wannabe niche car company to the most valuable car company in the world (by stock market capitalization) in less than a decade because they excelled at one thing: innovation. In December 2020, their market capitalization hovered around six hundred billion dollars, more than all the other major car companies combined. In April 2022 Tesla’s market capitalization exceeded a TRILLION dollars. While their stock price has come down closer to earth more recently, Tesla is clearly a very valuable company. Tesla has shaken up the car industry.
General Motors, on the other hand, used to be the most valuable car company in the world, but now has a market capitalization of under sixty billion dollars. GM lost their focus, gave up on innovation, and despite a huge bailout after the Great Recession, is still struggling to become relevant.
At Ground Floor Partners we focus on small businesses, so any discussion of giant businesses such as General Motors may seem irrelevant. But focus is even more important for small businesses than it is for large ones. Multi-billion dollar companies have the financial, management and operational resources to diversify. They can form different divisions and product areas, each with its own focus and core positioning. Small businesses don’t have that luxury. They have to focus like a laser (ok, maybe a flashlight) on a few, clearly defined areas. In fact the narrower the target market, the positioning and messaging, the better.
Whatever industry, sector or market segment your business is in, take some time to sharpen your focus. You can’t simultaneously be a non-profit and a for-profit. You can’t sell products to everybody. You can’t be the the fastest, the cheapest and the highest quality all at the same time. You can’t emphasize the triple bottom line while paying your workers a low wage and using suppliers that destroy the environment.
You have to choose.
Who do you want to serve? What are your values? What are your priorities? What are you great at?
When you can honestly answer these questions, you have something to build on.