I often tell my mentees that the great thing about every zero stage startup is that you have 360 degrees of freedom – you can do anything, go any direction you want. And the dangerous thing about having 360 degrees of freedom is … you can you anything, and go in any direction!
Startups need to be three things: fast, focused, and flexible. Where I find many entrepreneurs have a problem is with focus. This is evident when you ask them “what is your total addressable market (TAM)?” The answers tend to be “everyone with a smartphone” or “everyone who owns a home” or other equally broad and unfocused ideas about who will actually buy their product.
All startups need to find a niche, dominate it, and expand from there. Microsoft was the classic case. They began by selling programming languages like BASIC and Pascal, built their business and became the dominant supplier to developers. From that base they were able to expand to operating systems, thanks to IBM, where their dominance in systems software then enabled them to enter, then dominate the applications software market with Microsoft Office.
The corollary to the rule about 360 degrees of freedom being 10 degrees too many is that if you are trying to be all things to all people you will end up be nothing to anyone.
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