My Twitter reading this morning of Spanish posts on entrepreneurship highlighted a post on Loogic (SP)-- "The Difficulties of Entrepreneurs to Focus" (Spanish language post is here). Lack of focus or the inability to focus by the founder/CEO is one of the biggest reasons that early stage companies fail. I may not have enough evidence for a journal article in academia, but I see the focus problem almost everyday.
The writer cited three reasons that explain the lack of focus:
- To focus requires clear goals
- To focus requires faith in the strategy being pursued
- To focus requires the ability to say no to offers of deals, partnerships and other "home run" opportunities
My thoughts on the lack of focus of entrepreneurs are very similar to the writer, but what caught my attention was the concept of faith.
By "faith" what we are really talking about is self-confidence. Many entrepreneurs lack confidence in the strategies they thoughtfully prepared for their new business, especially after one or two setbacks. An example may illustrate the point.
The founder of a website that sells a specialized piece of software budgets $20 for customer acquisition on a product selling for less than $50. When I asked why such a high budget, the founder told me "I am not confident about my marketing strategy so I added a cushion".
Rather than having confidence in the original plan or re-thinking the marketing plan, the entrepreneur changes the whole marketing approach by changing the spending levels. A lack of focus is brought about by a lack of confidence.
To improve self-confidence in business decisions, three tips follow:
- Bounce important plans and decisions off your mentor(s)
- Research competitors for how they executed similar projects
- Look for analysis of similar issues on blogs (VC blogs are particularly useful)
How do you know when to use these techniques. As any sailor will tell you, "when in doubt--reef the mainsail". When in doubt about a major decision, use the three techniques above. For those of you who believe that entrepreneurs must use their intuition or gut instinct, always remember that intuition is just "facts that you can not articulate". The facts will come from 1-3 above.
Miami, FL