Return on Focus

Why entrepreneurs should exchange ROI with ROF

There's an almost ubiquitous understanding nowadays in Silicon Valley that ideas are a dime a dozen and that execution is everything. I remember the almost Cambrian explosion of ride-sharing apps or social networks that came before and after Uber and Facebook. Everybody had the same ideas. The execution was the hard part.

The problem with ideas is that 99% of the time the ideator hasn’t thought through all the consequences. Because to an ideator there's no difference between idea and execution. But to a builder, there's a vast difference.

For example, when implementing fall detection on the Apple Watch, there are hundreds if not thousands of trade-offs only discovered at implementation level that are ignored at the idea stage. When a highschooler is playing sports competitively, and they take a tumble, do we send out an emergency fall alert and stop the play of the game? If a fisher’s watch falls off, into a lake or pond, do we send an emergency alert? There are countless examples where sending an emergency alert might cause the unneeded expenditure of ambulances.

So, when someone tells me a product idea, oftentimes, the first question I ask is, what’s the cost? If we could wave a magic wand and immediately tell whether an individual is having a legitimate emergency caused by a fall, or instead, an intentional tumble due to an overly hyper bout of corgi play, then of course, we would do it. But problems aren't solved by wands. They're solved by focus and execution.

The answer I often get to the cost question is paring the feature down as MVP as possible. We will limit the fall detection to individuals between 90 and 100 years old. As if by stripping out 90% of the utility of the product, we somehow better justify the ROI.

Ironically, the most astute will take the exact opposite approach. Because really, the question “what’s the cost” isn't asking about ROI, but rather, ROF - return on focus.

Focus is an extremely limited resource. Each person can only have one Top Idea In Your Mind as Paul Graham would say. That's the idea thoughts will drift toward when they're allowed to drift freely. Having multiple ideas or focuses is a trap, for humans and computers alike are terrible at multi-processing.

After PayPal initially cracked their viral loop, and they started giving $20 to every new person that joined, their phones were constantly ringing with problems that demanded their focus. They received countless support requests a day. Now, they could have picked up the phone and answered each support request, repeating this hundreds and hundreds of times over. But instead they focused.

PayPal learned early a lesson many startups fail at, to let some fires burn while they put out the major one. They were bleeding money from fraud and if they didn't fix it, they would quickly go bankrupt. So PayPal focused and let the customer support calls go unanswered.

My primary goal as a CEO is maintaining the company’s focus. And it sucks. This amounts to me having to say “no” all the time. I’m constantly bombarded by great product ideas. And while this is incredibly useful, stopping the bus and disrupting the team’s focus is rarely worth it. Unless you think your idea should be the company's primary focus.

Folks that understand ROF don't pare their ideas down, instead, they bulk them up. They serve their nascent ideas meat and potatoes until they can re-justify the company's primary focus to their idea. And so they answer the hidden question underneath what’s the cost: what's the cost to our focus.

For other entrepreneurs, I suspect you will find inducting your team onto ROF will either be incredibly easy or impossible due to your hiring practices.

When I first was hiring at a startup, I immediately overcorrected from my previous roles at Big Tech. Google seemed to have a silly hiring process. Google asked a bunch of algorithms questions and made arcane allusions about individuals Google-y-ness, or how well folks would fit into the Google culture. I was determined to correct this by first and foremost hiring for skills. If your job is to write React components, what the hell does it matter if you have a knack for solving complex algorithmic questions.

I had almost a 100% fail rate with my first batch of hires. No one was a great fit for the team aside from college and high school friends, I had squeezed through the interview process instead of enforcing it. (Oh, by the way, always interview.) I, like many beginner entrepreneurs, had gotten it all wrong. Hiring for skills is the least of your concerns, and in fact, is fairly easily tested. Instead, I needed to focus on hiring for values and hiring for aptitude.

Talking with people and diving into their way of thinking is one of the best ways to hire great employees, and this practice is essentially hiring for aptitude. Great people are not sophists. They don't contradict. They're not hypocritical. If great people make complete syllogisms and you want to hire great people, then you hire folks that can make complete syllogisms. But the problem with hiring these people is that it may seem that they are few and far between.

A mentor of mine claimed this was due to a scarcity mentality. The mentality goes as such: there are very few, if not diminishingly few people that will work with you at your company, so beggars can't be choosers. This philosophy roots itself in history. At one point, humans lived in an inherently scarce world. There were folks that would live their entire lives without seeing more than a hundred people.

Now, in part due to globalization, in part to the internet, but in full to technology, that scarcity no longer exists. If you spent 12 hours a day, 7 days a week, 52 weeks out of a year interviewing candidates, you still wouldn't have even exhausted a pool of software engineers living in San Francisco.

Great founders have the exact opposite of the scarcity mentality. They may take six months and interview one hundred candidates just to hire their first employee. They firmly know that the world is abundant. And that the only resource not in abundance is focus.

I suspect that is the same reason why founders get distracted by shiny new product ideas and spend their time putting out small fires instead of focusing on the big one. There's some misapprehension that there is a finite supply of ideas. And that by not focusing on any one given idea, they'll miss out on it forever. But that's inherently not the case. There are infinite ideas that you can work on, but only one idea that you can truly focus on.

That's why ideas are dime a dozen and execution is everything. And the most important question you can ask yourself when evaluating ideas is not about ROI, but rather ROF.