Among my clients are many self-funded startups forming their first strategic plan and startups looking for investor money. As an entrepreneurial CFO I understand that multiple market channels reveal themselves as opportunities when creating a strategic plan.
Entrepreneurs always like to think that we can go after all the market channels at once. We want to create a strategic plan that goes after every possible opportunity we see. Why should we leave any stone unturned? Aren’t we giving ourselves our best chance of at least one route working out if we follow as many routes as possible? Why shouldn’t we fire all our guns at once? There is a logic to spreading out our resources—if one or two channels are doing well, we’ll focus our power there for now.
The reality of going after all market channels at once is diluted resources, and failure in all channels because each channel required more attention and more resources to be successful than any one entrepreneur can provide if they’re spreading it all out among different channels. I ended up kicking myself too many times thinking about certain market channels, and how they would have been successful if only I had had more resources, all with the knowledge that I would have had all those resources had I not attempted to pursue all the market opportunities I saw at the same time.
In order focus on one market channel, you need to convince yourself and your investors that the channels you did not select were not the right strategy, but what your plan ultimately shows you is that your one selected channel, let’s say it’s called “mom and pop retail shops”, is the best short-term (2 to 3 years) opportunity for your service/product, and when your company as acquired more resources and financing it can incorporate another channel in “the big box retailers”. Then even further down the road after it’s established itself and profited with “big box retailers”, maybe the Canadian market channel can be pursued, and then later the international market channel, and so on and so on. Don’t worry if it takes closer to 3 or 4 years than 2 or 3 years to be successful with the “mom and pop retail shops”. The important thing is that you preserved your resources, which is what made it possible for you to survive the extra time it took for you to profit in that market.
Beating any competitors to the punch is another incentive to try and claim every market channel at once. Still, you have to avoid this line of thinking. You should choose the channel that gives your brand the most opportunity for recognition if you are first to the market place with a new product or service. If you stick with that plan, you will always be perceived as the pioneer of that market place when you finally enter a new market channel, even if someone else beat you to the new market channel. Being the first to a market place, no matter which it is, will always give you a distinct brand recognition.
It’s hard to resist going after it all. Everyone has a good reason for attempting it, but you need to realize biting off more than you can chew will only result in you losing it all, and avoid the temptation. Pick the single best market channel, and focus all of your energy and resources there alone—it’s the best chance your startup has to succeed.