Singularity of Purpose

I recently re-listened to the Invest Like the Best podcast episode with Doug Leone.

Not only does it contain many incredible lessons from one of the greats in venture but Doug also highlights one of the most important things for early stage startups when asked what Sequoia looks for in early stage investments: Singularity of purpose.

As Doug put it:

Simplicity, crystal clearness, something a mere mortal can understand. If you can describe it and you can understand it you're out to lunch. Singularity of purpose. When I go to the store, I buy a pencil because I want to write. I don't want a pencil because I want to write, I scratch my back with the tip. It doesn't work like that.

Singularity of vertical market early on because you want to be narrow. You have no resources. You've got to be narrow. Oh, we are chasing these 4 vertical markets. It sounds good. But in order to do that, you have to have marketing that talks for different languages for 4 markets. And maybe you have to have engineering that develops different features for me. A little company can't do that. So be it the bull's eye as sharp as you can and then starts to expand in concentric circles when you get your legs under you in that vertical market. That's what I look for in position.

I’d argue that especially at the very start, you have to be even more narrow vs what Doug describes: Solve ONE very specific pain point / ONE single use case for ONE very specific customer.

The more narrow and specific you can be at the start, the better - be the sharpest arrow in one target.

Especially for pure software startups, this is now more important than ever in the AI powered “vibe coding” world we live in where defensibility around writing code is decreasing almost by the day (product risk in pure software is trending towards 0).

All of software increasingly has an intelligence layer to it. With it, your defensibility increasingly has to come from data / your product being purpose built for very specific workflows of very specific users.

Without an incredibly narrow focus from the start, you’re very unlikely to be the best for your target customer.

While this all sounds obvious, it’s very hard to do in practice.

As pre-seed lead investors, we see hundreds of startups a month. You wouldn’t believe how many of them are still looking to be “disrupt management consulting with AI”, ”transform HR with AI” be the “AI powered Chief Strategy Officer for Startups”, build the “AI Sales Leader”, and so on. You can eventually get there but this broad isn’t where you should start.

Very few have the courage to niche down on a “killer wedge. And even fewer have the conviction to stay in their lane once they get some early customer traction. As it’s very tempting to say “yes” to add secondary features to broaden appeal when a (even slightly) different type of customer shows interest. Which is more often than not the beginning of the end.

Depth over breath.

Or as Doug calls it: Singularity of purpose.

If you’re thinking about / have started building an AI native software startup, reach out.

We often get involved before you even write your first line of code, catalyze your first round with up to $750K and specialize in helping you get off the ground better and faster, alongside 200+ GTM leaders at some of the fastest growing software startups across North America.

There’s truly no “too early” for us at focal.