How To Choose What To Do First
There’s a good chance that your startup is trying to do too many things at once.
It’s easy to start with the bold vision of the future, and then start to design a business that incorporates all of the elements from Day 1.
Unfortunately, you probably don’t have the energy, attention or resources to do all of these things properly.
Therefore, you’re staring down a choice: to do a bit of everything, or to put some parts of the idea on hold.
Ron Swanson said “Never half-ass two things; whole-ass one thing”.
We don’t need new businesses that stretch themselves across a range of industries and tasks, we need specialists who can do a good job.
Therefore, it’s much wiser to freeze part of the concept and focus on the core of the idea.
This is what Strategy is all about – choosing what not to do.
As David Ogilvy put it: Strategy is Sacrifice.
Sacrifices, by definition, are painful.
You’re giving up something valuable, with the hope of creating a better long term future in exchange.
We’re not just trimming the ugly excess, we’re going to be cutting into some cool ideas, in order to preserve the most vital and remarkable ideas.
Everyone’s circumstances are different, but I’ve seen two principles work very effectively; doing the hard bit first, and defending the cash cows.
Doing the hard part first
Will Dayble asks entrepreneurs a weird and insightful question:
“Let’s say you want to train a monkey to recite Shakespeare on top of a marble plinth.
Which do you do first – train the monkey or build the plinth?”
When asked this question, some people pick the plinth – they want to start building something to get some traction.
The problem is, they’ve picked the easy part.
The real challenge is training the monkey to recite Shakespeare.
If you can do that, there’s a lot of things that can follow – with or without the plinth.
If you build the plinth first but then struggle to train the monkey, you don’t have an attraction and you don’t have a business.
Your business has this too.
Some parts are like training the monkey, and others are like building the plinth.
I bet you know in your gut which is which.
This is similar to one of Tim Ferriss’s great productivity questions:
“What am I currently avoiding doing?”
Deep down you know which parts I’m referring to.
Maybe it’s negotiating with sponsors.
Maybe it’s building the financials.
Maybe it’s creating the sales campaign.
Maybe it’s running a pilot, or building a prototype.
Maybe it’s starting your content marketing.
Maybe it’s fixing your SEO.
Maybe it’s the thing you’re dreading.
It’s probably not arguing with a cheap designer about your logo.
It’s probably not choosing your office furniture.
It’s probably not a launch party.
It’s probably not applying for a loan.
It’s probably not speaking at events.
They’re all good things that come later.
They’re all things that are made easier by doing the hard parts first.
Defending the cash cows
Why is your business losing money on some sales?
How is this a good strategy?
I know you probably feel attacked by those questions, but someone needs to raise the point.
A new business should not be losing money on each sale.
There are enough challenges in your financial model as-is, like purchasing equipment and training new staff.
The only solutions to these challenges are to take investment or to start making margin on your sales.
I can tell you right away – sales are much cheaper than the investment dollars.
They’re also required to get the investment in the first place.
Sales can substitute for investment, but investment can’t substitute for sales.
The temptation here is to create a large number of revenue streams – finding a lot of different things that could be sold and that will make a profit.
This is where we come back to the “whole-ass one thing” concept.
Yes, there’s a scenario where you can profitably sell branded water bottles.
It will take a level of effort that will require you to drop some other products.
You’ll need to actively market and promote them, giving them pride of place over the other things that you sell.
So on your spreadsheet, it’s easy to write “Water bottles: cost $2,000 revenue $5,000” and expect a $3,000 profit to casually sail into your bank account.
That’s the problem with having so many revenue streams, they start to drain energy from one another.
Therefore, we have to start prioritising some over others.
You can’t afford to prioritise the loss leaders, certainly not in the early days.
Margins buy you time and breathing room.
By prioritising the products and services that make money, you create a level of cashflow that will help fuel your growth and your long term social impact.
If you’re trying to choose which ones to keep, these questions might be helpful:
Which revenue streams prove our value proposition?
Which revenue streams entice customers to continue buying from us?
Which items generate the most margin?
Which products improve our learning and capacity?
Which products establish us as formidable competitors in the market?
In which markets would we be number one or number two?
Which items would customers campaign for if we took them away?
I know you’d like to think that you can do everything, and maybe over the next five years you can.
The real decision is around what to do first.
My suggestion from experience is to train the monkey and keep your cash cows.
Maybe you’re worried about being pigeon-holed into a niche, when you want to be seen as a multi-talented generalist.
I guess being known as the best Shakespearean monkey trainer and the best cash cow farmer seems like a pretty good pigeon hole.
Better yet, these buy you time to escape the pigeon hole, but now with the credibility and cashflow to expand your business.