Focus

Many technology based ventures get started with the intent to solve one particular problem and wind up creating a platform that can be applied to many different market opportunities. There are also companies that set out to develop platforms with broad applicability from the start. The majority of businesses in which I’ve been involved have been in this situation. As these companies grow, I’ve found that they either choose to narrow their focus or they wind up over-spending, under-delivering, and in the process diluting their efforts over too many projects with competing success criteria. As a result of living through this situation several times I’ve come to believe that focus is essential to good product/project management, budget/financial management, corporate strategic planning, and enabling crisp clear messaging with investors, customers, employees and partners.

The issue of focus is especially challenging for platform companies, which in their early stages typically are staffed by enthusiastic creative personnel, many of whom have yet to be worn down by the battle scars of project delays, missed budget goals, challenges raising funds, or addressing one or more competitive threats in real time. Some people avoid focusing because there are so many different opportunities that are appealing and they don’t want to miss out on addressing one of them. Others are consumed with the fear of choosing the wrong opportunity on which to focus. In many cases, however, early stage companies (or new business units within large corporations) are forced to focus because they realize that they simply don’t have the financial resources to pursue too many opportunities at once. When access to resources isn’t a problem, they often ultimately recognize that the time involved in pursuing many applications with different product performance specifications and/or target customers takes much longer, which winds up creating execution risk such as missing a critical window of opportunity.

Here are a few real world examples that illustrate the benefits of focus. At Collaborative Research Inc. (CRI) in the late 1980s we established one of the first laboratories to offer DNA analysis as a service. The company had internal research programs focused on using DNA probe hybridization and gel electrophoresis to analyze restriction fragment length polymorphisms (RFLPs) as markers of disease causing genes. The basic concept was that when analyzing patterns of DNA inheritance in families, if an RFLP was physically closer to the location of a gene of interest in the genome, then the RFLP allele and the phenotype dependent on the gene would be co-inherited with higher frequency.

Programs were being pursued to develop RFLP based diagnostic tests for a dozen of the most prevalent disorders caused by inheritance of single genes. These included cystic fibrosis, neurofibromatosis, and adult polycystic kidney disease, to name just a few. There were also programs aimed at improving the technology for genetic analysis, as well as for demonstrating the potential to create genetic and physical maps spanning the entire genome. The first such whole genome genetic map of the human genome was published by scientists at CRI in the journal Cell in 1987.

We also recognized the potential to use this core technology for applications of DNA analysis unrelated to genetic disease that required pattern matching. Examples included bone marrow transplant compatibility testing, paternity testing, and forensic analyses. All of this work was financed by a combination of US government grants and profits from the company’s legacy business selling growth factors, oligo d(T), and other biochemicals used as research products.

Although the government grants enabled CRI to continue virtually all of these programs in parallel, when setting up the commercial service laboratory it became apparent we had to focus our efforts. We first narrowed down the test menu to just the pattern matching services, and eventually to only paternity testing and forensic analysis. Although both applications were frequently performed in the context of law enforcement, paternity testing had traditionally been conducted by a collection of blood banks and private blood testing companies, while forensic testing was typically done at laboratories operated by the FBI, state bureaus of investigation, and comparable organizations in other countries such as the Royal Canadian Mounted Police (RCMP) in Canada, and the Home Office in the United Kingdom. These were different groups of customers, and required separate commercial support teams. Fortunately they were both relatively concentrated market segments with small absolute numbers of customers, so our decision to focus our efforts on them enabled us to develop our business with relatively few headcount and operate in a very capital efficient manner.

From 1989 through the mid-90s I was involved with the early efforts to commercialize PCR technology – first at Perkin-Elmer-Cetus Instruments (PECI), then still at Perkin-Elmer but working in partnership with Roche (following Roche’s acquisition of Cetus), and ultimately as part of Applied Biosystems Inc. (following the merger of PE and ABI). I initially led the PCR Research Reagents business and later directed the entire PCR product line covering both instruments and consumables. We started off highly focused with just one key reagent, Taq polymerase, the GeneAmp® PCR kit which included Taq polymerase, magnesium, dNTPs and control DNA from the bacteriophage Lambda, and a DNA Thermal Cycler with which these reagents were used to amplify targeted segments of DNA.

Kary Mullis would go on to be awarded the Nobel Prize in chemistry for his invention of PCR a few years earlier, and PCR would go on to become a foundational tool for genome analysis. In 1989, however, the business of PCR was still quite small and the technology was not yet widely used. The business was being managed part time by people whose primary responsibility lay elsewhere. As PECI began to realize the enormity of the opportunity, people such as myself were employed full time to focus on developing the PCR business.

Our primary mission was to drive the growth of this nascent business through key opinion leader collaborations, various forms of marketing communications (in the days pre-dating widespread internet usage or the existence of social media) including print advertising, trade show exhibits, and company sponsored seminar series. Being recognized as the leading source of customer education and support for PCR were critical differentiating factors for our business. Many other companies could (and did) make thermal cyclers and Taq DNA polymerase, but our strong intellectual property position created a unique opportunity for PECI alone to promote and support use of thermal cyclers and Taq polymerase for performing PCR.

As the world of biotechnology became aware of the power of PCR, the business grew extremely fast. In parallel with this growth came countless new ideas from customers for application specific kits and/or accessory products, adding on top of the seemingly infinite list we had developed internally. Dozens of projects were initiated in the research group, and at some point we realized that we were overwhelmed and had lost our focus. There was a lot of internal stress as everyone was just trying to do too much, we were losing operational efficiency, and we could not justify the budget required to support all of these projects. As a consequence, we put a system in place to provide more structure and discipline around our decision making regarding initiation of new research projects, when to transition a product candidate from research into development, and if warranted, to subsequently release the product into manufacturing and begin training our sales and support organizations in advance of commercial launch. This planning, gating and review system enabled us to better focus our finite resources on the projects with the greatest potential financial and/or strategic return, and to make better informed decisions as we executed our plans. The business benefitted tremendously.

One final comment: the need to focus early on does not mean that one can’t go back and address other opportunities later. Think of them all as potential product line extensions, once the first product has proven successful. Also bear in mind one of the key tenets of Geoffrey Moore’s “Chasm Crossing” approach to new technology based businesses. In Moore’s view, you should pick a single strategic beachhead where you have the best chance of winning, and create the “whole product offering” for that market segment, leveraging partnerships, if necessary, to ensure that all aspects of the target market ecosystem are covered. Once traction is gained in the beachhead, adjacent market niches can be viewed as a set of bowling pins. Having knocked down the first pin, you should have a high likelihood of impacting adjacent pins (market niches) which are often characterized by crosstalk amongst customers. Good word of mouth, or “buzz”, can be leveraged to advance into additional markets when resources permit or the time is right. In the beginning, however, the decision to focus more narrowly is often the right one.