First, let me introduce our two products along with some context and background to set the scene. You could think of them as businesses, ventures, or departments as well, the same logic applies.
For the purposes of our thought experiment here, both businesses are starting at the same time, have the same capital available, the same quality of people and the same resources (e.g. distribution, etc).
BigVision is a business (or product or department) that has a big, exciting vision. They’ve identified a Big Opportunity to transform Industry X and their strategy work has identified First Opportunity as where to start first.
The CEO or Senior executive will usually say something like “We’re going to transform Industry X by providing a product that does Long, List, Of, Features, And, Cool, Ideas. We’ll solve structural problems in Industry X.”
People nod their heads. Everyone agrees that this is where the world is headed. These problems would be great to solve. That long list of features has some cool solutions that could work and would be fun to build. Also, the total market size is billions.
“We just need to start with First Opportunity first as due to our market analysis and business modelling, this is the best one to tackle”. The executive continues, “Also, we must do First Opportunity in a way that ensures we can also meet Long, List, Of, Features, And, Cool, Ideas.”
This line of thinking is where success at achieving the First Opportunity and the BigVision begins to get derailed before you and your team have even started working.
There are two issues at play, the first is the way the First Opportunity has been selected (business modelling, top-down market analysis) and the second is the conditions placed on how First Opportunity is pursued. We’ll come back to these. Let’s continue with the story.
BigVision’s Product Research & Development teams begin researching customers, the business model and the industry. They follow best practices in Discovery with a real focus on understanding customers.
The research reveals that customers are having Different Problem, which is different to the problem that First Opportunity will solve for them. Some customers have a very different problem, and other customers do have the problem, but are already solving it with existing solutions in the market.
The research team takes these insights from customers and proposes the options of Solve Different Problem or More Narrow First Opportunity. The More Narrow First Opportunity is proposed in order to be able to differentiate from the existing solutions for First Opportunity and be competitive in the market.
BigVision’s executives consider the options:
- Continue with First Opportunity;
- Solve Different Problem; or
- More Narrow First Opportunity.
Before we go further with BigVision’s story, we need to learn about HyperNarrowFocus.
HyperNarrowFocus is looking to pursue a business in the same industry as BigVision, Industry X. They hold similar views to BigVision about the future of that industry and how it will transform.
The CEO says “We believe Industry X is changing and we know there is an opportunity. Let’s find where we can start. We have a hypothesis that it is First Opportunity.”
HyperNarrowFocus tasks its research teams with performing a Discovery with First Opportunity in mind. The teams go out to the same set of customers as BigVision and reveal the same insights. That is, customers are having a very different problem and they already have solutions for First Opportunity. The research team proposes the same options that BigVision’s executives considered.
Where the Stories Start to Diverge
BigVision’s executives want to continue to pursue their big vision to transform Industry X. They see this decision they face as a minor one. A variety of reasons are put forward: “We are focused on the long term, First Opportunity is small, but we’re after the big prize. It’s OK to compete now because soon we’ll also do Long List Of Features that will make us the market leader.”
HyperNarrowFocus’s executives choose to pursue the Different Problem that the Discovery research revealed. “We want to be able to do one thing really well and we want it to be something customers tell us they want.” HyperNarrowFocus goes a bit further and elects to narrowly focus on Different Problem to the exclusion of the various cool ideas that could transform the industry in the future. HyperNarrowFocus might one day pursue those cool ideas, but will not compromise how it solves Different Problem.
It turns out there is also another company in the market, ExistingCompetitor. ExistingCompetitor has been diligently doing research as well and was faced with similar options. ExistingCompetitor chooses to go More Narrow on the First Opportunity (an opportunity they were already in the market with active customers).
How it Plays Out
In the BigVision team right from their first roadmap planning session and Go-to-Market, they’re running into signs of trouble. The product development team needs to modify the user experience on a few features and add substantially more infrastructure and “platform code” to support the Long List of Features that will be tackled at some point in the future. The landing pages talk a big game.
While BigVision’s teams are writing platform code, HyperNarrowFocus has shipped a product with an experience so focused on the Different Problem customers said they had that customers forgive some of the performance issues. HyperNarrowFocus has also been able to sign up some early customers and iterate on the user experience further, making it even better.
ExistingCompetitor has launched some of the features to make it more narrow, to better solve the customer’s needs in that First Opportunity area.
BigVision is still writing platform code, but they have managed to ship something. Customers have trouble, they get lost in the experience because they get confused by the wording they were sold on with landing pages. The landing pages oversold based on the big transformation, but the product just does First Opportunity (poorly).
This spiral continues, BigVision falls further behind. HyperNarrowFocus generates a small base of customers that love them, which help them create an even better experience and noise in the market. It’s simple, but customers love it because no one was solving the problem that well, so they are partly just glad to have a solution. ExistingCompetitor gets even more entrenched in the market in the area of First Opportunity. They pull so far ahead here that BigVision will always have a lesser product. BigVision just won’t be able to invest in what ExistingCompetitor is.
I have been the BigVision executive. I’ve led a product to failure because I wanted to transform an industry and feel important, which shot our product and go-to-market efforts in the foot. I’ve worked with many companies that took the BigVision approach – it’s the one that gets lots of agreement from senior executives, stakeholders and investors. It feels good, you feel important for doing something big, everyone around you feels good.
You can pull off the BigVision, but it’s harder. These are the exceptions and usually require executing on the BigVision from day one (with an oversized amount of capital). Most businesses, including those that we see as big successes went the HyperNarrowFocus path. Some well-known examples are Stripe, Twilio, Airbnb, Google, Qualtrics and Canva (I could keep going). All nailed an initial, very narrow focus and spent years executing on it before looking to broaden the vision. The world is such that narrow is the new big, and being too big from the beginning usually results in failures.
CEO & Founder
Scott is the CEO and founder of Terem, Australia’s leading tech product development firm. Terem has featured on the Financial Review’s Fast 100 for two years running. Scott has been involved in the launch and growth of 61+ products.