A common issue encountered by new and experienced entrepreneurs is entropy; “Lack of order or predictability; gradual decline into disorder.” Translating the physics term into English is best described as the continual spreading and expanding of projects and directions. Take for example, a small company with a “platform technology.” The platform allows for multiple projects and products that can be created and protected by the Intellectual Property (IP). The tendency is to try and create a long pipeline of products that will allow for potential investors to have a product flow in the future. This is a great idea, but has possible resource problems if not managed well.
Small and large companies can easily get caught in a trap of having many more projects than their resources allow to be managed efficiently or well. These resources are people, money, and/or facilities. Focusing only on select key product development assets has benefits and risks. But, not doing so has benefits and risks as well.
Many small companies have limited financial resources. They will seek to increase the funding by applying for grants. The result is the companies are required to focus on the work in grants and the employees are tasked accordingly. With multiple grants, it is quite possible to have several product development programs and none of them advancing very well. This can occur with funding from private sources like angels, friends, and families. Everyone wants to see their pet product advanced but if funds and people are spread over several products the development can take longer than originally anticipated.
As hard as it may be, the CEO entrepreneur must learn to stay focused on what creates the greatest value for the company. Many believe this comes from advancing the potentially best product as far as possible with the funds available. Also, it implies that little or no resources are used to advance other products in the pipeline.
Focus relates to all key aspects of the company. As the Army states in their advertisements “BE All YOU CAN BE.” So what are some considerations that can help Focus, Focus, and Focus on creating your value, and what areas should be considered? Here are a few thoughts:
Product Market Potential: If you are starting from the beginning, selecting the lead product for your pipeline may occur by identifying which product has the shortest time to market with the largest market potential. Starting from a license with a product already in the development, one might focus on advancing the product closest to a product launch. Either way, do an internal analysis and identify what your lead product candidate is and develop your timelines around that product. If you believe there are extra resources that can be committed, pick your second and possibly third pipeline product and allocate resources carefully. Take care to not take on too much work or over promise results to investors.
Competing Technologies: A common issue with small companies is the ownership of several unrelated technologies; all of which have product opportunities. The feeling is that all must be developed and this can lead to dilution of resources and slow advancement of your best products. Conduct an analysis of what products are most important to the company. Select the most important products to develop based on your analysis. You may want to seek partners for the technologies that are not selected. These product opportunities could allow for the company to find a partner that will bring money to the program and facilitate getting a lower ranked pipeline product to market.
Development: Establishing timelines and milestones are absolutely critical. This form of goal setting helps to get the team focused and identifies the timings of events. It helps keep the focus on the product development and allows for better estimates of product launch. The latter will allow for better preparation of development of marketing and sales programs in a timely manner prior to launch.
Innovation, Creativity, and Leadership: One of the greatest turnaround stories of late is in the auto industry. Aside from the fact that the government allowed for a reset of the business, innovation, creativity and leadership are major factors in the turnaround. Getting your entire team on the same page and getting them to go where you want to go without daily ordering of tasks, creating confusion, and increasing frustration requires leadership. Hiring based on innovating and creativity ensures potential for future growth and new advances which were not predicted originally. Continued focus on developing and/or encouraging these skills in your team will ensure a brighter future.
People & Partners: From the very start, keep a high focus on your end user or customers. They are going to be the ones that will make or break your company in the end. If customers do not buy or are unhappy, the company will not last long. The attention to the market and buyers is essential. Your employees need loving care as well. One of the responsibilities of a leader is team building and extracting the most of from their creativity, innovation, and management capability. Spend time focused on their growth, education, and participation. Finally, do not forget your partners. They may need continuous handholding!
Budget: With all the activity, it is easy to allow funds to be spent too fast or unwisely. Focus on stretching the money as far as you can while achieving the maximal result is a difficult and critical task.
Taffy Williams is the author of: Think Agile: How Smart Entrepreneurs Adapt in Order to Succeed to via Amazon