How strongly should you adhere to your business focus and just concentrate on the one core thing extremely well? Is focus worth loosing prospective customers for (especially major companies which say that they only want to deal with one point of contact so they want you to handle a, b, c and if you work with them). What should one consider when deciding?
You must do everything you can to become the world’s best at the focused thing you do. The difficulty, as you point out, is to know the scope of that “thing” and to realize that the path there is not a straight line.
This is where a clear vision and a strong mission statement comes in handy. At MySQL, we stated that our mission was to “make superior database technology available and affordable for all”. It was important to say “superior” because that led us to always try to make our product better. The word “available” reminded us to make it easy for people to grab the product and read the documentation.
The word “affordable” reminded us that we must have a business model and that we have agreed that we will always offer pricing that’s much lower than the traditional database vendors.
When customers asked us to do things, we looked at our mission statement to determine whether we should do it or not. In 2003, SAP AG asked us to do two things: help them popularize their own open source database, and modify MySQL so that it would be able to run SAP applications. This sounded like a strategic distraction. We spent several weeks thinking about it. At the end, we determined that it’s part of our mission to make our technology available for SAP customers as well, and by doing the engineering work they were asking for, our product would become better.
We entered into the partnership and spent several years building towards that goal. The downside was that we now spent less time working on features that websites needed, and some may argue that we shouldn’t have engaged with SAP. Yet, at the end of the day, I believe we did the right thing in partnering with SAP. It diverted our attention away from our most central customers (websites like Google and Facebook) but it gave us credibility in the enterprise space.
It’s difficult to give generic advice on this topic, but this is how I would summarize my thinking for situations where you are considering a new initiative that may be a diversion from your core focus:
Validate the new thing against the mission and your long-term view for the company. If they match, then embark on the new idea.
If item 1 doesn’t provide an answer, then look at the customer or partner who is suggesting the new thing. Is that a key customer or partner both now and for the long term? If yes, then that’s a good reason for embarking on the new initiative. Your best customers are often your best source of strategic guidance.
If you still don’t know, then ask yourself if there is significant money or fame involved in doing the new thing. Sometimes you can’t afford to say no. But if you can afford to say no, then say no. Your long-term success is determined by how well you live up to your mission, not whether you take every paid project you are offered.
If you still don’t know, then your uncertainty is proof enough. You should NOT do the new thing you are thinking of. An old rule says that there are just three things you need to do in a startup company to make it grow fast: focus, focus, and focus.