Want to grow faster? Increase EBITDA? Boost conversions? Simplify a business that's gotten too complicated to run?
The cure is below. It's the same one I give almost every business owner who calls me, no matter what problem they think they're calling about.
When you're managing a business, you make hundreds of tiny decisions each day.
What do you charge? What do you build first? What goes on the homepage? Which photos? Which words? Which trade shows do you attend? Where does your first advertising dollar go? Every one of those branches into ten more.
Here's the trap I fell into, and I get why so many founders fall into it too. The world feels like your oyster. Your product could help all kinds of people, so why limit yourself? Why not sell to everyone?
Because every customer you add multiplies those hundreds of decisions.
I'm going to give you the standard advice (pick one customer, one problem), but I want to be honest up front: I didn't follow it. We broke this rule at Tatango for years. And the strange part is that breaking it is how we found the best version of our business. So the lesson isn't "never expand." The lesson is in what you do the moment you find your winner. More on that in a minute.
How Tatango Sprawled
Tatango started about as focused as a company can get. One customer, one product. We built software that let fraternities and sororities send mass text alerts to their members. That was it. One type of customer, one job to do.
Then I did what I bet a lot of you reading this do. I'm an entrepreneur. I see problems I can solve everywhere.
So over a few years, we drifted. We didn't decide to sprawl. We just kept saying yes.
A restaurant wanted to use it, so now we served restaurants. Then retail. Then e-commerce. We expanded from the U.S. into Canada. On the product side, we went from text alerts to coupons, to emergency messages, to voice calls and voice messaging. At one point we even let you blast your message out to Facebook and Twitter.
If you landed on our website at this point, you saw all of it. Every customer type, every use case, every feature. We thought that was a strength. Look how much we do.
It nearly buried us.
Every Decision Got Twice as Hard. Then Ten Times.
Running the business became one of the hardest things I've ever done, and the sprawl was a big reason why.
Take pricing. You can't just set a price. You have to set it for a fraternity, and a restaurant, and an e-commerce store, each with a different budget and a different idea of what's worth paying for. Now run that same problem through every decision in the company:
Features: every customer type wanted something different, so the roadmap pulled in ten directions at once.
Website copy: who are you even writing to? Anything you say to win one customer confuses the next.
Imagery: a sorority chapter or a busy retail counter? Pick wrong and half your visitors don't see themselves.
Conferences: Greek-life events, restaurant trade shows, or retail expos? Different rooms, different budgets, different people.
Advertising: different keywords, different audiences, different messages, for each one.
Sales compensation: how do you pay a rep selling to wildly different buyers with wildly different deal sizes?
Account management: same problem, different department.
Cohort analysis: good luck pulling a clean signal when every cohort is a different animal.
Every one of those went from a clean decision to a tangled one. And we hadn't even gotten better at serving any of those customers. We'd just spread ourselves thin across all of them.
We Thought Variety Helped the Buyer. It Didn't.
Here was our logic: the more we offered, the more customers we'd win. More doors open, more people walk through.
Wrong.
It made it harder for buyers to say yes. When a restaurant or a retail store landed on our site and saw every kind of customer we served, it didn't signal "they can help anyone." It signaled "they probably aren't built for me specifically." There was no way to tell if we were the best in the world at their problem, because we obviously weren't focused on their problem. We were focused on everyone's.
Confused buyers don't buy. I broke down the science behind this in Too Many Choices Is Killing Your Sales, where six jams on a table outsold twenty-four by a mile. The same thing was happening to us.
The Turn
Here's what cracked it open.
Buried in that smorgasbord of customers, one type kept outperforming the rest: political. Political organizations using text messaging to raise money. They had urgency, they had budget, and they had a clear reason to send a lot of messages fast.
So we made the uncomfortable call. We stripped everything else out and pointed the entire company at that one customer. We went so far as to remove hundreds of accounts from the service that weren't political, immediately costing us tens of thousands a month in lost revenue.
Pricing changed to fit how political campaigns actually buy. Features that didn't serve political fundraising got cut. The imagery on the site went from a grab-bag of random users to one specific user. We knew exactly which conferences to attend, exactly which ads to run, exactly how to structure sales and account comp, because there was one customer with one use case. Cohort analysis got easy overnight, because every cohort was finally the same type of customer.
And revenue took off.
Not because the software got better. Most of it was the same product underneath. The only thing that changed was that when our target customer hit the site, they instantly knew we did exactly what they needed, and that we were the best in the world at it. It would be strange to promote nothing but political fundraising texts and not be great at it. The focus itself gave them confidence. Clarity converts.
The Part Everyone Gets Wrong
Now, the contradiction I promised you.
We didn't start in political. We backed into it. We started in fraternities and sororities, sprawled into a dozen verticals, and it was that messy expansion that surfaced political as the winner. If we'd stayed locked on Greek life forever, we might never have found the best business we had.
So I'm not going to tell you to pick one thing on day one and never look up again.
Here's the honest version. Start with one specific customer and one problem. Then, if you want, test other markets. Feel free. But go in understanding the rule: the moment a test wins, you cut everything else and refocus on the winner.
That last step is where almost everyone fails. Testing is fun. Cutting is hard. Most companies run the test, find a winner, and then keep all the other markets open anyway, because cutting feels like giving something up. So they stay sprawled. They keep the agony.
The whole payoff (easier decisions, lower customer acquisition costs, a story buyers instantly understand) only shows up when you actually cut. Discovering your best market is worth nothing if you won't drop the rest to chase it.
The Biggest Companies on Earth Started This Way
If you think focus means staying small forever, look at how the giants began. None of them started broad.
Google was a search box. No Gmail, no Maps, no Android, no ad empire. Just one job: help people find things on the web. They nailed that first.
Amazon sold books. Only books. Bezos picked one category, became the best place on earth to buy it, and expanded from there. "The everything store" came much later.
Facebook was for Harvard students. Not "everyone," not even "college students." One campus, then one school at a time. The whole world came after they'd already owned the dorm.
And notice the timeline. None of these expanded in year one. They spent years dominating their first market before they reached for the next. Expansion was a reward they earned, not a starting position.
Make Sure the Niche Is Big Enough
Size the niche. Don't pick a market so tiny that even total domination leaves you nowhere to grow. That's the one real risk of focus.
But don't overthink this either, because most markets are far bigger than they look. "Baked goods for dogs" sounds like a hobby. It's a large, real market. "Pizza restaurants in America" sounds narrow. It's more than enough to build a serious company on. If you're not sure, ask Claude or ChatGPT to help you size it. You'll usually find your little niche is actually a massive market.
When to Expand
Earn the right to expand. I talk to founders all the time who hold less than 1% of their core market and are already eyeing the next one. That's backwards. You haven't tapped your market. You've barely scratched it.
This is the same drum I beat in Drill Baby Drill. When you hit something that works, the move isn't to go find the next thing. It's to drill the one you've got until you've pulled real share out of it (think 20% to 30%, not 1%). Then, and only then, we can talk about expanding.
Conquer your first market the way Google, Amazon, and Facebook did. Only then do you expand.
Fire the Customers Who Don't Fit
Everything above is easy to nod along to if you're starting from zero. It gets a lot harder in almost every conversation I have, because most of the founders I talk to aren't starting from zero. They already have a business, and it already serves the wrong customers alongside the right ones.
Focusing on one customer isn't a messaging exercise for them. It's not new copy, a new avatar slide, a new set of ad targeting parameters layered on top of the same client roster. It means firing customers.
I get the same objection every time. But Derek, why not just keep those clients too? What's the harm in extra revenue?
The harm is that you don't actually focus. You just say you're focused while your operations tell a different story. Every client outside your one customer profile drags a piece of your old business into your new one. Different needs. Different pricing. Different workflows. Different feature requests, support expectations, and sales scripts. You can rewrite your homepage in an afternoon. You cannot rewrite your operations while you're still running them for two different businesses at once. Say you have 500 customers and 100 of them don't fit. Either those 100 rewrite your roadmap for you, or you cut them. There is no third option where you keep them and still get the benefits of focus.
Focus only pays off two ways, and you don't get either one halfway. First, it makes the market legible. If mismatched customers are still on your roster, they're still describing your business to the world in ways that contradict your new positioning, and every one of those descriptions makes your ideal customer trust you a little less. Second, it strips complexity out of the business, and complexity is what kills operating leverage. You don't get that benefit by intending to remove the wrong customers eventually. You get it the day you actually do it, and not one day before.
This is why almost nobody I talk with with pulls it off. They see the logic. They nod along. Then it comes time to actually cut six figures of revenue on purpose, and they can't do it. Cutting revenue feels like malpractice, even when keeping it is the slower path to failure. That's the real reason this rarely works as a turnaround move. It's not that the strategy is wrong. It's that almost no operator has the stomach to execute it once real dollars are on the line.
Which is exactly why it's so much easier to build this way from day one instead of retrofitting it later. Pick one customer before you have 500 customers to un-pick. Hold the line on it until you've actually won that market. The businesses that wait until they're big to try this are the ones asking me, six months later, why the focus never stuck.