Doing one thing well is hard. I like to think that you’ll need about 50 people, 5 million bucks and three years to do one thing well. If you have less than that, you will really have to be focused - you don’t have a lot of room for error.” - Jim Franklin, Former CEO of SendGrid and Startup Advisor
Startups need to do one thing and do it really well in order to stand out. Unfortunately, finding that one thing you should do really well is a simple question that’s extremely difficult to answer. With the myriad of requirements from various stakeholders, it’s hard to zero in on a focus without getting pulled in different directions.
So, how can you find out what’s the core of your business?
Jim Franklin, Mentor for the Denver Founder Institute and the former CEO of SendGrid, the world's largest Email Infrastructure as a Service provider, suggests 4 ways you can go about doing it.
Finding your DNA
A question that Jim constantly asked himself is this, “what’s our DNA?” Knowing what the startup stood for helped SendGrid understood what’s core to their business and what’s not.
With SendGrid, Jim knew that the business was about transactional infrastructure and not about email marketing. Even though SendGrid had the functionality for sending out email marketing newsletters, because that’s what his users asked for, he knew that email marketing was not their DNA and so it was not something to focus on.
Serve the hero of your story
The hero of your story is the main target user you are serving. Finding out what helps your hero to reach his goal is a way to differentiate what’s core to your business and what isn’t.
For Sendgrid, the hero of their story was the web developer. Since a web developer’s goal is to build applications and all applications send transactional emails, building such functionality becomes a necessary hassle. This is the pain point that SendGrid solves.
Jim also noted that if the hero of SendGrid’s story was the web marketer, they would have a very different product because a web marketer had very different goals from a web developer.
Use the Hedgehog Concept
Jim Collins created the Hedgehog Concept in his book ‘Good to Great’ after being inspired by the famous essay by Isaiah Berlin, “The Hedgehog and the Fox”. While the cunning fox is always devising different complex plans and strategies to attack the hedgehog, the simple hedgehog only does one thing – roll up into a ball of spikes. Guess who always wins?
You can use this Hedgehog Concept to find what is the one thing you should by by answering three questions - 1) what are you deeply passionate about, 2) what can you be the best in the world at, and 3) what best drives your economic engine.
The intersection of these three answers is your Hedgehog – the one thing that’s your core and the one thing you should focus on.
Follow the money
The last method that Jim suggested is to simply see what users are willing to pay for and use that as a gauge to separate what’s core and non-core to your business.
This might be a big question to answer, so Jim suggests you use the lean startup methodology to find out. The lean startup is a method of developing businesses that reduces time and money wastage by running business-hypothesis-driven experiments to find out what users want. To find out what’s your core, simply test out hypotheses on people will pay for.
What is your core?
Finding out what is the one thing you need to be good at is not a simple task, and there are businesses that never figure it out. If you figured it out for your business, share it with us in the comments below!