How the best startups focus their efforts

Learn how you can successfully use a wedge strategy

How the best startups focus their efforts
Photo by Abby Savage on Unsplash

Hi friend,

The last few months I’ve followed the same pattern. I do deep dives into two startups in a similar space but with very different outcomes. 

This month I’m going to change it up a bit.

Rather than discuss just two startups, I’m going to discuss nine!

Woohoo!

The focus this month is market definitions.  Meaning, how you define your market. 

Specifically, we’re going to discuss how you can successfully use a wedge strategy.

Some people get hung up on what a wedge strategy is (and isn’t).  But it doesn’t need to be complex. 

Simply put, you’ve got a wedge strategy if:

  1. You’re required to focus. 
  2. You start small and can scale.

You start by being clear on what you’re doing and what you’re not doing. Then be certain what you’re doing has a growth path.

If you’re doing these things, then you have a wedge strategy.

This can look very different for every startup. 

And this is why I want to share more than one example.

Because while there are three general ways you can focus your wedge strategy, there are endless permutations for what this looks like in real life.

But let’s start with the three general approaches:

  • Product focus
  • Geography focus
  • Audience focus

How Assembled grew with a product focus

Assembled is building a workforce management tool for support teams.

The founders worked together at Stripe, in its early days. They often pitched in to help with ad hoc customer support.

The Assembled founders experienced firsthand just how stressful support could be. But they also lived through the pain of trying to scale an ad hoc approach. It just doesn’t work.

So, they are building a comprehensive tool to help support teams dependably provide world class service.

Their vision is "to become the operating system for support teams". This is quite ambitious.

Despite this vision, the Assembled founders have taken a very measured approach to building their platform.

Assembled's Progression

There are a few things that stand out about Assembled.

First, they are moving incredibly fast. Just 12 months between Seed and Series A. And only 14 months between Series A and Series B.

Next, their growth in that time is stunning. 300% growth between Seed and Series A. And 400% growth between Series A and Series B. 😳

You likely noticed their employee growth was constrained up to Series B.

But what really pops is how they slow rolled their product expansion.  

Their vision is to create an operating system. Yet, through their Series B they show incredible constraint with how much effort they pour into product development.

And this focus has worked extremely well for them. 

How Welcome to the Jungle grew with a geography focus

Welcome to the Jungle (WTTJ) has built a new breed recruiting firm. And I’m impressed.

The founders believe job hopping is rampant because people aren’t finding the right cultural fit.  So, rather than focus on filling job reqs, WTTJ focuses on transparently sharing company cultures.

They first built a media firm that could fully showcase a hiring company, highlighting why the company is unique and what type of person would excel there.  They use videos, write-ups, and photojournalism to bring these hiring companies to life.

They focus on the human element. And their goal is to help each job seeker find a sense of purpose with a company. They believe each person will excel with a great fit.

What they are doing and how they are doing it is so different than how other recruiting startups have done it. It’s laudable. And it’s incredibly impressive.

It’s also quite ambitious. Just like Assembled.

Rather than conquer the world from the start, they focused first at home. In France.

Welcome To The Jungle's Progression

With such a unique business model, it makes sense that WTTJ focused on a specific geography until they were certain their formula works.

So, they “stayed home” until they raised Series B funding.  This gave them not only the confidence to begin expanding but also the means to do so.

In many ways, WTTJ is building a two-sided marketplace. And they are doing it geography by geography.  After raising their Series C, they expanded into the US market.

What they are doing is working. And I’m not sure it could have worked quite as well any other way…

How DigitalOcean grew with an audience focus

DigitalOcean currently targets developers and small businesses. But it wasn’t always this way.

For many years DigitalOcean only targeted individual developers.

In fact, how long they kept this focus might surprise you.

DigitalOcean's Progression

Can you imagine focusing on just one target user group until you’re past 300k customers, 100 employees, and $200M ARR?  

And they didn’t begin hiring a sales team until ~2016.  Even then, the sales team reportedly wasn’t that successful.

Instead, DigitalOcean relied on high quality, educational content and a robust community to draw in prospects. Then they converted with a low-cost, self-serve product.

This long-term focus on one user group is highly unusual. But when it works this well, it’s hard not to notice. 

Mix-and-match works too…

Each of these examples are useful because they bring to life three ways to create a wedge strategy:

  • Product focus
  • Geography focus
  • Audience focus

But often, the reality is a blend of these three.

Assembled had both a product and audience (Customer Support) focus.

WTTJ had both a geography and audience (HR) focus.

And DigitalOcean had a product and audience (Devs) focus.

Really, you can see a version of these three foci in successful startups everywhere. 

Carta started with a focus on a cap table management solution for startup founders.

Uber started with a focus on accessible black car services for affluent people in San Francisco.

Robinhood started with a focus on individual stock trades for young, low-volume traders.

And on and on.

The question isn’t so much whether to create a focus through a wedge strategy. Rather, the question is, how are you focusing with your wedge strategy?

Because next week we’ll take a look at three startups who chose not to have a wedge strategy. And we’ll see how that worked out for them. 

Until then, keep growing!

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