Several times over the past several days I’ve been speaking with both entrepreneurs with whom I’m working, as well as those with whom I’m exploring.
Again and again, the subject of balancing opportunity and focus comes up:
- How to establish a strong first market beachhead. And then to select and execute crisply on a second. And then a third.
- How to prioritize introductions of products on a roadmap.
- How to think about planned company acquisitions and the value of a target company’s product as it applies to our company’s core business, assets and values.
- How to get started on the journey of ideation behind founding a company.
When my thoughts are asked about how to approach these decisions, the conversations — while about completely different subjects relating to companies at very different stages of development — invariably come back to a simple strategic principle I’ve followed for many years.
The Principle of Lily Pads.
What the what?
It’s a concept I’ve incorporated into my personal thinking and advice I’ve offered as an entrepreneur, operator, company leader and investor.
It’s a checkpoint I’ve used on myself in building my career and in building my company partnership portfolio. And also in helping to build our firm’s technology investment team strategies.
It’s input I give again & again to talented founders, managers and investors:
- Aim to be truly competent — and be known for that competence.
- Realize real, measurable success in that area of competence.
- Weigh the value of adjacencies.
- Assess the value of leverage.
- Then — and only then — consider expansion to other areas of target focus.
Brilliant Old Schoolers like Geoffrey Moore and his market entry philosophy of “Bowling Pins” touch upon my principle. Target one market, then the next adjacent one. Rinse & repeat.
But the Principle of “Lily Pads” — maybe someone can quote me and call it a Law — that would be awesome :) — can be applied to company formation, career development, corporate development, growth hacking, striving for K-factor or Seeking Alpha.
Get established as the best in an area. But critically — pick the next areas by virtue of not just opportunity — but also the adjacency of skills, assets, success and reputation. And the potential leverage of each.
- Company founding: Is the founding vision broad enough to enable the balance of laser focus and future expansion?
- M&A: Can the to-be acquired product(s) be sold to the same customers? Economic Buyers? Through the same selling effort?
- Product Roadmap prioritization: Beyond business plan benefits, does it leverage existing dev skills & resources? Go-to-Market readiness? Customer support inferences?
- Career Development: Has one’s experience, body of work, reputation and advisory network yet enabled expansion to broader focus?
On & On.
A pretty simple Principle. So, OK, maybe not on par with Bernoulli. And, as potential Laws go, certainly below the pay grade of Metcalfe.
But one that cross-checks for me in my simple mind again & again.
Get really good. Then think about the merits of the next leap. Ensure probability of execution by making the leap short. Drive long-term success by testing, sampling, measuring, Attain repeatability. And increase the speed of every leap that follows.
Simple is as simple does.