By Dr Sharon Tal and Prof Marc Gruber
An in-depth study of tech start-ups showed that 72% change their market focus within the first three years. The common assumption that entrepreneurs need to adopt a ‘laser-sharp’ focus approach to not spread their efforts too thinly might actually limit your success as a start-up. It is the ability to be flexible and agile – to be able to adapt quickly – that is the actual key to start-up success.
This isn’t to say that pursuing a single market opportunity is wrong – the limited resources of most start-ups make this a sensible move due to limited resources. Yet, to be able to handle unforeseeable changes in the future you must adopt a careful balancing act between focus and flexibility within your business.
This Agile Focus for your start-up may seem like an oxymoron, but when done right it could be the key to your start-up success! It means that when acting in an uncertain environment you avoid completely locking-in by remaining flexible, yet focused. This strategy relies on your ability to keep your eyes open to new market opportunities while keeping momentum in your current focus. It mitigates risks in uncertain markets and increases the value of your company with relatively low efforts.
Implementing an Agile Focus in your company
What are your growth and backup opportunities?
In your company you need to identify additional market opportunities which could make suitable growth options or backups. Growth options are market opportunities which you will want to pursue after the success of your current business, while a backup option is one that you would want to pursue if your current direction failed.
How related is each option to your existing activities?
Evaluating the relatedness of the different opportunities allows you to see whether delivering and developing the products require relatively similar resources and capabilities for both markets. This means you can use your existing resources to succeed in your backup and growth opportunities – making it a more viable strategic option.
Keep your backup and growth options open
Whatever the stage your business is currently in, it is important to always have a viable backup and growth option available to you. Keeping it open means that you invest very little resources and management attention to it, just enough to make sure you don’t lock yourself out of the option. Having these options available will make sure that your company stays agile and able to adapt to thrive.
The future of your company.
Keeping these future options in mind will help you to develop your resources in a more general manner and plan for all eventualities. This could impact a variety of different aspects of your company, such as picking a brand name which could lend itself to redirection. Through a relatively low investment it will make your company robust to change, agile and prepared for the future – whichever path, or indeed paths, your company ends up travelling.
Dr Sharon Tal and Prof Marc Gruber, pictured above, are the co-authors of Where to Play, 3 steps for discovering your most valuable market opportunities, published by FT publishing. They also offer a free EdX course. For more information go to www.wheretoplay.com
