It's tempting to add adjacent revenue streams like training or job boards. However, these often represent entirely new business models requiring different organizational commitments, potentially distracting you from perfecting your primary revenue engine.
One of the biggest threats to a company's focus is a bored founder. Convinced of their own intelligence, they chase new, shiny opportunities, which dilutes resources and distracts from the core mission that made them successful in the first place.
The Castos founder decided to build a second product only after a year and a half of failing to grow his core business, even after hiring top marketing talent. This ensures a new product isn't a premature distraction from a solvable growth problem.
Adding new offerings is a smart growth strategy, but only if your primary business is stable and systemized. Launching a new service to escape existing chaos will only amplify it. Instead, treat the new offering as a separate, dedicated division to maintain focus and quality.
Contrary to the 'diversify revenue' mantra, having too many offers increases complexity in marketing, systems, and support, which erodes profit margins. Focusing on fewer, well-promoted offers almost always outperforms a scattered product suite.
The founder of Randomals was tempted by animation deals while struggling with inventory. The advice was to ignore these 'sexy' but distracting opportunities. True scale comes from disciplined focus on strengthening the supply chain and mastering the single sales channel that's already proven successful, not from chasing scattershot growth.
According to Peter Thiel, founders who boast about multiple revenue streams or distribution channels are unintentionally revealing a critical weakness. The most successful companies typically have one dominant, highly effective revenue model and one primary acquisition channel driving their growth.
Businesses get into trouble by diversifying too early. Instead, focus on perfecting your primary revenue driver—the "spine" of the company. Once that foundation is solid and you're world-class at it, you have earned the right to expand.
Even a company with significant revenue can be stuck in the "problem-market fit" stage if it introduces too much complexity. Pursuing multiple products, ICPs, or go-to-market motions dilutes focus and exponentially increases difficulty, hindering the ability to scale effectively.
When facing multiple promising growth opportunities, founders should avoid pursuing them all at once. Instead, sequence them by designating one channel as the primary "engine" for the next 6-18 months, treating others as mere proof points to maintain focus.
Audit your revenue streams to distinguish 'busy revenue' (high-effort, soul-sucking work) from 'aligned revenue' (energizing, sustainable systems). Focusing on growing aligned revenue, even if it means restructuring or eliminating profitable but draining streams, is key to a sustainable business model.