"Figur[e] out what the core issues are and then iterate against them."
Wednesday, February 16, 2011 at 1:54PM
GN

I'm re-reading a piece on Palantir from June 2010, and this sentiment struck me deeply:

“If you are iterating on a product that you want to be important three years from now, it’s better to have engineers figuring out what the core issues are and then iterate against them. If you want to optimize on revenue [for the] next quarter…you want to be heavy on a sales force. We’re long on dealing with the most important problems…and short on what happens in the near term.”

     - Alex Karp, CEO and Co-Founder

Obsessive attention to core problems, core pain, and a rigorous, laser-like focus on solving these problems seems intuitive enough, but exceedingly rare in commercial enterprises of any size or thematic focus.  On the other hand, not everything that is best or optimal or beautiful in the world finds its way into the experience of (or purchase decisions by) individuals and organizations.  Sometimes the shape of the message and its delivery are as crucial as the message itself.  For example, Harvard College has made huge strides to improve financial aid as long ago as 2007, including the elimination of student Loans as a financing method in favor of ALL GRANTS based on financial need.  Yet to this day hundreds of high school students in NYC alone complain of "how expensive it is," and "how many loans you have to take on" in order to attend!

Much digital ink has recently been spilled over the debate between product focus versus marketing/messaging focus.  It would be difficult to make the case that absolute attention to one to the exclusion of the other is the "right" way.  What we have found in working with and speaking to entrepreneurs and founders is a recurring anxiety around a product that is extremely tight, reliable, and intuitive to use (and whose value is clear once used), and that very few People/Users know this.  Marketing, or the process of broadcasting to the world that you have a solution to a problem (whether it be analyzing massive data sets, deciding where to eat dinner Saturday, or financing a liberal arts education), isn't trivial, and it doesn't have to cost anything (on a net basis).

Do we really believe that the only reason one widget company has $80mm in revenue versus one that has just $5mm in revenue is that its product/solution is incontrovertibly superior?  On the other hand, if a venture is not hyper-aware of and surgically-focused on solving a problem or reducing friction, any amount of marketing may lead to an early exit, and not the liquidity-creating kind.

 

GN | 16 Feb 11

Article originally appeared on Centurion Venture Partners (http://centurionvps.com/).
See website for complete article licensing information.