Matthew T. Taylor
Internal Focus Eventually Consumes Anything Good
How did you spend your holiday? Housework? College football bowl challenge? Since Georgia Tech was inauspiciously absent from this year's college football playoff, again, I spent time reading about the Napoleonic Wars. Stop before you click away to check email. The similarities between business and 18th century conflict are amazing. Seriously. You can actually trace Napoleon's pivotal first defeat in 1809 because of his internal focus on French politics to his eventual downfall in 1814.
How much time we focus our attention externally versus internally often defines our success, not only in war but also commerce. I was sitting in Merchandise Mart last week having a wonderful conversation with someone in the venture/incubator community. The topic was how much time we spend in our work lives on internal company matters. This individual stated his management thought he spent 15% of his time internally. When he presented his team and his work calendar to his boss, this evidence confirmed the number of internal meetings and time spent handling non-customer related matters was 66%. In my corporate life, for every 100 emails I get, 95 of them are about internal topics. To hammer this one home, in one meeting of top North American managers, a senior ranking manager did a 60 minute commercial initiative presentation, not mentioning the word "customer" or the like until the 29 minute mark. How is that possible in a sales and marketing organization selling 103 year old products?
Phillip Fisher in his book Common Stocks and Uncommon Profits stated one of the reasons to sell a stock you hold in your portfolio is when "smugness, complacency, or inertia replace the former drive and ingenuity....Either they [management] no longer hold to the policies that have made the company outstandingly successful, or they do not have the ability to continue to carry out such policies." Existing and mature corporations must listen to their customer*. How many clicks does it take to order something on Amazon? How many clicks does it take to order something on your company's website?
In venture, I believe the path to success is external focus. The differentiating factor is how well you service your portfolio companies. It takes a village to raise a child. How many does it take for a unicorn exit? The difference between a $1B versus a $10M exit might be helping founders fund raise at the pre-seed level or posing difficult commercialization questions prior to a major strategic initiative. VCs with a pre-ordained agenda focused internally do their portfolio companies a disservice.
A 2020 goal of mine is to spend more time externally focused and ignore the internal noise. You never know. It might help me avoid my next Aspern-Essling.
* In the short term, corporations must listen to their customers. Long term innovation, or "giving a customer what they do not know they want but need" must be parallel-pathed with short term customer satisfaction and current buying habits.