If such a thing as “the perfect recipe to build a large successful company” existed, it would probably read like this:
- Start with great vision leading to large market
- Identify opening or angle to attack it
- Build initial version targeting your early adopters
- Gain traction
- Use traction to conquer your beach-head
The truth is that very few cases like this actually exist (Elon’s secret master plan being one of them). The majority of mortals find themselves often in two different, but equally challenging, situations. Similar to a form of light induced blindness.
When vision blinds traction
The first one is “the entry point” challenge. In some cases the vision is clear, the opportunity is there to grab (often to the point of being “obvious”) but you just cannot find the right way to start.
The importance of finding the right entry point can hardly be overstated. From Geoffrey Moore’s “Enthusiasts and Visionaries” to Steve Blank’s “Earlyvangelist” to Peter Thiel’s “small niche” (to be dominated), everybody out there knows how critical it is to start with the right users.
But looking at it only from the point of view of a segment misses the point. It is rather the combination of: addressing the right users, with the right value proposition, delivered through the right set (preferably as small as possible) of features and the right channel. It’s what David Galbraith calls “ecosystem fit: the starting point for the path to capture the opportunity”.
What it boils down to is the ability to gain traction, beyond any doubt. Lots of things can be fixed when there is traction (from hiring to fundraising to differences of opinions in the team), but when you are struggling to make things work even the best relationships will start showing cracks.
In these situations, the presence of a clear vision and a large opportunity can paradoxically make things worse. Rob Go explained this with extreme clarity in one of the best post I have read on the topic (and podcast):
There is this risk that you feel (traction) is always around the corner, we just need to launch this product or this feature or get this level or critical mass.. and it’s always at the end of the horizon..
The presence of a large market will make it so that you can get a few customers by working really hard. And the clarity of the opportunity will give you the energy to endure. But in the end, these signals will mislead you by not pushing you hard enough to change more drastically and find the “real” entry point.
When traction blinds vision
There is then a second challenge, at the opposite extreme. Startups, or rather products, that have found traction or are just close to it but where it is hard to imagine what the next step would be.
Let’s say you have created a nice to-do app, you could certainly turn a profit around that (and even a good exit) but it takes serious strategy work to go from a product with traction to a business with huge revenue potential. Fred Wilson talked about this recently:
Most of the companies I work with didn’t really start out with a strategy. They started out with an idea that turned into a great product that found a fit with a market. And they jumped on that and used it to build a company. Most of them wake up at some point and realize that a single product in a single market is not a strategy and they need to come up with a plan to get a lot bigger and build a sustainable and defensible business.
When looking at these two challenges, many people would be inclined to pick the second one. It is definitely easier to figure out the next step when things are going well — the proverbial “luxury problem” — but there is also a counter argument. Having found your local maximum can turn into a trap, and lead the team into a blind alley with no clear path to the next stage. Lack of vision and clear strategy will result in endless discussions around what to do next, possible feature creep and ultimately throwing away the original traction.
Following the perfect recipe sounds great, but it’s rarely how life looks like. If you are facing one of these two challenges the best you can do is to acknowledge them and avoid letting your vision, or your traction, blind you.