Venture Capitalist at Theory

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2 minute read / Jan 23, 2013 /

Discovering, Honing and Exploiting Your Startup’s Strengths

To be truly successful, I believe startups should determine which of the four core disciplines is their strength: product, engineering, marketing and sales - and focus, focus, focus on leveraging that advantage in the market.

Product driven startups - At their outset Twitter, Pinterest and Instagram were exploratory products driven by their respective creators, Jack Dorsey Ben Silbermann, and Kevin Systrom, who were each product managers building a product of their own vision. The key innovations were the creation of new social environments.

Engineering driven startups - Larry Page and Sergey Brin developed a new search algorithm at Google. The key innovations were engineering driven: relevancy, precision vs recall, response time.

Marketing/customer acquisition driven startups - Mark Pincus, founder of Zynga, reconstructed well known games of chance and developed sophisticated marketing techniques to win market share in a commodity market. The key innovations were customer acquisition, retention and revenue maximization through social engineering.

Sales driven startups - SolarWinds, an Austin based company selling network management software, created a new, incredibly profitable sales model to the segment. Even today they have 50% EBITDA margins. The key innovations were inside sales productivity and efficiency innovations.

In the case of each of the companies above, the focus of the company was on crafting, honing and exploiting one particular advantage. Of course, all of these companies as they grew developed competencies in the other disciplines as they must over time. But I believe what made them successful was continuing to focus on their strengths and becoming best in the business at that one particular discipline.

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