How to Balance Focus on One Customer at a Time Versus New Features for Many?
by Kevin Hale

Dear YC,

Sometimes we (a software startup) have disagreements about what to focus on. Should we spend our time making one individual customer more happy, or build new features that will have benefits over the long term? Until now, we’ve been defaulting to the individual customer, but this has caused some stuff on our roadmap (bigger, major features) to be delayed in favor of smaller bug fixes, feature requests etc.

Is it always the right choice to “build the company one customer at a time“, or when should we draw the line and focus on the big new thing no customer asks for (yet)? Is there a trick to make these trade-offs?

Sincerely,

Short Long Game


Dear Short Long,

Ah, the perpetual product prioritization juggle. How do you choose what to dedicate resources on among the new features asked by customers, fixing bugs in the existing product, and building features that are part of the vision of the founders?

I recommend startups sort each of these lists by their impact on the company’s core metric that they’re trying to optimize. Basically, that means sorting them by their impact on the startup’s growth. For most companies that’s probably going to be revenue.

When I think of growth, I always think of it as a function of two numbers : conversion rate and churn rate. So you should be asking yourself at any time which items, if I build them, will get me the most new customers. And you should be asking yourself which items if I don’t build them (or fix them) will I lose the most customers.

The latter is usually the most eye opening for founders when they finally ask themselves this honestly. Most of the time, the features asked by customers are not ones that they’d leave over if not built immediately. They’re nice to have, not need to have. When resources like time and energy are limited in a startup, knowing what not to do becomes invaluable.

One common mistake I see some founders make when they can only work on one thing at a time is choosing an item that they think will make the most difference and taking too long to implement it. When you can only dedicate resources to one project at a time, then you have to make sure you also calculate the opportunity cost of not implementing other items on the list. Building a feature that takes 6 months to implement at the expense of everything else would probably not be ideal, especially if the second biggest impact to growth is a bug that could be fixed in a week.

Sometimes the answer is clear and it’s obvious that you must fix a critical bug over everything else. Boom, easy win. Sometimes it’s not as clear and your gut tells you that the feature no one asked for but is in your vision is the idea that will make the most impact on growth. That is where you, the founder, earn your equity. Time to make that tough decision! It may or may not work out, but at least you’re not making the decision arbitrarily. If it doesn’t work out, learn from the mistake, resort and move forward quickly.

If you do it right, your company eventually grows to the point where it can work on each of these lists simultaneously.

— Kevin Hale