Warren Buffet gives the advice "If it isn’t the most important thing, avoid it at all costs.” Peter Thiel use to famously walk around the Paypal offices and refuse to talk to you unless it was about your currently assigned number one initiative. It’s no secret that I’m a big believer that focus wins professionally and personally. But when it comes to growth, I think focus is vital. Which is why the fourth principle that guides our growth philosophy is:
Growth Principle Four: Focus Wins
I previously wrote about how focus wins in detail. With this post I’d like to do a quick recap of those reasons, along with how we specifically apply it to our operations as a growth team.
The Simple Equation Behind Focus
Cal Newport explains the simple equation behind focus:
1. Your highest priority goal should be the goal that returns the most value per unit of time invested.
2. You and your teams time/attention are limited.
3. Therefore the time/attention you spend on lower priority goals, steals time from your higher priority goals, so the total net value produced is lower the more time/attention you put into lower priority goals.
The Cycle Of Focus
Beyond that simple (and awesome) equation, there is a self-reinforcing cycle behind focus that drives teams.
There are five main reasons focus wins:
1. You Move Faster
Focus provides a single filter for teams to make decisions. It also constrains surface area to worry about. The less surface area, the less complexity, the easier decisions are to make, the faster you move. Conversely, the more surface area, the more complexity, the harder decisions are to make, the slower you move.
2. You Learn More
The faster you move, the more you learn. The more you learn, the more successful (hopefully) experiments you’ll run.
3. More Progress
The more successful experiments you fun, the faster you will grow.
The more progress you make in a single area, the more the teams confidence builds.
5. Value and Competitive Advantage
Focus helps you be world class in one or a few areas, rather than being just ok across a bunch of areas. That leads to faster growth and a competitive advantage.
How We Apply This Principle To Growth
Choosing The Highest Impact Area
We have opportunities to make improvements to every area of our growth equation. But our primary limit is time. That means we have to be really good at working on the highest impact areas, and ignoring the rest. We spend a lot of time looking at the overall picture and understanding where the highest impact area is right now. Is it on acquisition, activation, retention, revenue, referral? If retention, what part of retention? Etc, etc.
We primarily do this by building a growth model that is informed by our commitment to data. The model and other pieces of data help us asses three things for each part of our growth equation:
1. Where are we at today? (the baseline)
2. How much do we think we can improve it? (the ceiling)
3. How does that improvement impact our key metrics? (the sensitivity)
Setting Guard Rails With OKR's
After we figure out the highest impact area, we use the goal setting framework OKR’s (Objective and Key Results) to set guard rails on that area. The goal setting framework has a few components.
1. We set a qualitative objective against the high impact area
2. We set some quantitative goals that measure the high impact area
3. We set a time frame that we are going to work on the focus area
Number three is the most under appreciated piece of the framework. The time frame is key to focus. It provides a future stake in the ground that tells the team we are going to step back and reassess our focus area. That allows the team to stay heads down on their focus area and block out the noise from elsewhere.
Focusing On Few Acquisition Channels
There are many ways to get traction. But there are only a few ways to truly scale, which is why choosing and focusing on your key acquisition channels is important. We have a lot of opportunities to do one offs that would probably help acquire some new users. If the channel/tactic doesn’t have the potential to meaningfully change the game for us, then we don’t spend time on it. Spending time on those types of opportunities only steals time from the truly meaningful ones.
We Double Down When Something Works
When we find a tactic or experiment that works, we ask one simple question. How can we do more of this? We try to double down on the things that work, before moving on to experimenting with new things. This sounds simple, but it is one of the most common mistakes I see other teams make.