Business: 1-2 things matter
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Elad Gil emphasizes the importance of identifying and focusing on the most critical aspects of a business. This approach helps investors and entrepreneurs avoid getting distracted by less important details when evaluating opportunities.
Key principles for identifying critical business factors
- Most businesses have only 1 or 2 fundamental aspects that truly matter
- Everything else is often just noise or "check the box" items
- People often get too wrapped up in considering 5 or more factors, when fewer are truly important
Benefits of this approach
- Allows for clearer decision-making
- Helps in identifying the right opportunities
- Enables better resource allocation and focus
Examples of critical business factors
- Stripe: Early focus on getting every developer to use their product
- Anduril: Identified 5 key things a next-gen defense tech company needed to do to become a prime contractor
How to apply this framework
- Analyze the market and product deeply
- Identify the core drivers of success for the specific business or industry
- Ruthlessly prioritize efforts around these 1-2 key factors
- Avoid getting distracted by less impactful aspects of the business
Evolution of critical factors
- The key 1-2 factors may change as a business grows and evolves
- Complexity often increases as companies become multi-product and international
- Early on, there's usually a key insight or focus that drives success
Importance of hands-on experience
- Going deeper than surface-level analysis helps in identifying truly important factors
- Practical experience with products or technologies can provide valuable intuition
- This approach helps in honing in on what's truly important for a business's success