On every entrepreneurial team there is at least one "idea person". This person is often "the creative" or "the techie" but not always. They are the dreamers thinking about how big this company could be and all of the vertical & horizontal ways it could grow. They are the type of founder popular culture tends to idealize. This person is important and that skill is a necessity for the team's success but if it isn't harnessed correctly it can also become the root cause of failure.
It is orders of magnitude easier to come up with "great ideas" than it is to test their viability in the market and build a business around them. This should really come as no surprise. It's a very common occurrence even for people outside of the entrepreneurial community. How many times have you heard a relative say "That's a great idea! You should go on Shark Tank!" 99.99% of those ideas never become real because of a lack of execution.
The same holds true within a company as well. As an early-stage company it's important to consider questions like "how big could this be?" and "as we grow how can we find opportunity to accelerate our value?" The challenge is those questions can often be confused with "what other products should we offer?"or "what other markets can we go after?"
The latter two questions are very different in a startup context for one really important reason: they create distraction. Entrepreneurs are often to quick to introduce new products or go after new markets before they've really tested their core business and built a foundation to support the execution of new offerings. I see too many technology roadmaps that show the team developing 3 new products all at the same time and releasing them before they've really established themselves as the market leader.
Business school thinking will support that theory for growth. If you want to dominate, introduce more products and expand into more markets. If you're GE or Motorola then that can be a viable strategy. If you're a new company with 0 - 1000 customers then it's a recipe for distraction and slowing growth. When you're in hyper growth mode, everyone on your team is focused on getting the football down the field as quickly as possible. When you start introducing new products or markets too quickly, you're now asking them to run down the field while juggling multiple balls at once. What do you think will happen? They slow down. Believe it or not, I also see this just as often from companies that are so early they have neither a big team nor customers! That means rather than a team juggling all of those balls, you're forcing just a couple of founders to do it. How fast do you think you'll be able to run?
The better strategy is to maintain focus on the growth of your core business until you've begun to establish yourself as the market leader. When it becomes clear you are on your way to dominance, that you have a significant customer base, and that you're generating significant cashflows to fund the R&D work you need done, you're now in a better position to think about those new growth opportunities.
That said, as I will talk about next week chances are the best opportunities will not come from the conventional mindset of "more features" and "additional customer segments" but by leveraging your new and growing market position to fuel additional disruption.
