Focus On Your Core Business Or You Will Fail

Too often, startups risk getting misdirected by the media and customers to add features and functionality to a product or service that turn out to be collateral to the core business. I believe this is happening with Gowalla and Foursquare, among others. Both services have become media darlings, and both are obsessed with adding features to already confusing products.

I’ve tested both services and believe that the feature creep evident in the recent releases from both companies may do more harm than good to their ability to compete with other companies focusing on local advertising (Google, Facebook, and MANY others).

By following the media’s lead (and thirst for more “cool” releases), Gowalla and Foursquare seem to be focused on features collateral to their businesses – not on their core business.

Are Gowalla and Foursquare squandering their opportunities and visibility? I believe they are.

Contrast the feature creep in Foursquare and Gowalla apps with the way our friends at Groupon have managed Groupon’s growth – by staying focused on the company’s core business and adding features (like the recently added rewards program) that support the core business.

Location based marketing is important, but every website and service will soon be able to execute location based marketing strategies. Importantly, location based marketing is expected to take up a 70% share of all U.S. interactive marketing spending as soon as 2014 – $4 billion in 2015 (up from $34 million in 2009). Companies that don’t focus on their core business will cede leadership and market share to those who do.

As I discuss in this video, there’s a danger when you split your focus and forget about your core business.

Do you think that the features added to the Gowalla and Foursquare apps are critical to their location based advertising models? Why?