5. Accelerate Your Focus

Part 3, accelerate your focus. Chapter 5, do the work to engineer a focused path and scalable model. In an age of infinite leverage, judgment is the most important skill. Neval Rovacant. The company Nike's value plummeted over 50%, $28 billion in market cap in just three years from late 2021 to the end of 2024. The ones that beloved American and even global powerhouse, Nike has become one of the biggest examples of what not to do and be in business. They've had among the worst strategy of any large and important brand in recent history. When their public earnings were released in October of 2024, shocking the market by how bad the numbers truly were. Nike's then CEO, since January of 2020, John Donoho stepped down. Elliott Hill, a 32-year veteran of the company known for his exceptional leadership, was named as CEO. In his introductory remarks as CEO, Hill stated, "We're putting Sport back at the center of everything we're doing." The past several years, Sport is not what Nike has been focusing on, almost everything but. And since at least 2017, Nike shifted its focus away from innovating the best sports gear particularly shoes. It also shifted away from the inspiring and empowering athlete-centric storytelling in its advertising that led the world to falling in love with them in the first place. Just do it was no longer the message of Nike, nor its focus. Rather than innovating the best in-class footwear, Nike shifted into speculative technology, like the Metaverse, creating Nike land. They also got involved in crypto projects which flopped both for themselves and their customers. They began investing lots into wearable technology and sensors, as well as data analytics. All of this confused the market about what Nike was about. Because their focus was widening and shifting to other sectors, naturally the quality of their shoes nose-dived in both innovation and style. They became lazy, relying on their old and existing popular models like Air Force One. Customers became fatigued and frankly bored with Nike shoes as they were clearly inferior to what was being offered by other brands such as Hoka and On Cloud in the running space and Adidas in the sports and fitness spaces. It's even been noted that Nike shoes have progressively become uglier and out of touch as one commentator wrote, "Nike's latest ugly shoe is so bad it's good. A bold statement that sure to turn heads, even if they're not always in the right direction." Not only did Nike stop being excellent, but they also alienated their most important wholesale distributors. In attempts to focus more direct to consumer via online marketing, Nike pulled back on key distributors such as Belk, Macy's, Dick Sporting Goods, Dillards, Zappos, Fred Meyer, Boscovs, Big Five Sporting Goods, and many others. Although shifting strategy based on a higher frame is essential, that's not what Nike did. When they severed ties with long-standing wholesalers, they did so without full commitment or execution on a chosen path forward. Instead, they aimlessly drifted in many directions while the quality of their shoes went down the toilet. Not only that, but they disaffected half of their customer base through extremist political marketing more on this later, a recipe for disaster. Because the wholesalers were put off by Nike, they began putting Nike shoes on the back shelves of their stores, and instead, emphasizing brands like Hoka, Enclout, Adidas, and others, which were massively growing in public interest and market share. Regrettably for Nike, their anticipated growth in digital sales direct to consumer never eventuated, like all things going on at Nike during this time, there was no focused execution. So even if online sales were a decent concept, whether through social media, the metaverse crypto, or whatever pathways Nike was considering, not much really happened. It was all noise and no signal, no clarity, no focus, no leadership. Just the final nail in the coffin, beyond Nike's bad strategy of rapid diversification and poor execution, was its shift in messaging and storytelling. For decades, Nike was one of the best storytellers in the world, inspiring people of all generations and backgrounds with their advertisements. Everyone wanted to be a part of Nike, everyone loved the ads and the athletes and wanted to just do it no matter how big or seemingly impossible. Yet in 2017, Nike shifted toward more political and divisive messaging. In 2017, they put out bold and public statements to open the US borders. In 2018, they aggressively pushed their dream crazy campaign featuring the NFL quarterback Colin Kaepernick, whose recent stance of kneeling during the national anthem cost him his NFL career. While the NFL didn't back Kaepernick, knowing their audience, both Democrat and Republican loved the flag and the country, Nike went all in. The campaign's tagline was, believe in something, even if it means sacrificing everything. Though it may have been an inspiring message, it was now political, not athletic. It had nothing to do with Nike's products. There have been many, many more controversial Nike campaigns on various political topics since 2017. None of these campaigns or topics is inherently wrong. They only leave the consumer scratching their head and asking, what is Nike optimizing for? Who is Nike's target market? Are they an inspiring and innovative performance company for athletes or a technology and political organization? Nike's new CEO, Hill, has publicly stated that to get Nike back on track, they will reduce focus on extraneous ventures such as digital. They aim to refocus Nike on being an athlete-centric brand, with a renewed commitment to developing cutting-edge products in core categories such as running, basketball, and training seeking to regain market share lost to competitors. Hill further stated that they seek to rebuild relationships with wholesale partners and increase their marketing efforts on athlete-focused storytelling to strengthen consumer connections and brand loyalty. The jury is still out whether Nike can turn this around. We will see whether they can actually execute on a more focused and disciplined strategy. The research on Impossible Goals is clear in regards to situations like Nike. Hill marries typically don't work as a survival plan. When you're a sinking ship, going for radical innovations in an undisciplined manner will only speed your self-destruction. This isn't to say Nike shouldn't deploy Impossible Goals, indeed such goals are profound and accelerating when focused on the signal. It's just unclear, given their current momentum, whether they're willing to truly set a clear and specific frame, and from there, raise their floor and eliminate the noise that's gotten them into this tumultuous situation. Will they choose a focused path? Impossible Goals aren't for the undisciplined. Yes, they are strategic and lead to incredible innovation, but that innovation is focused and based on quality decisions. Strategy, by definition, means focus and choice. It means drawing hard lines in the sand, first and foremost, about what you won't do. Of this, the management guru Peter Drucker wrote in the effective executive. The job, however, is not to set priorities. That is easy, everyone can do it. The reason why so few executives concentrate is the difficulty of setting post-seriorities, that is, deciding what tasks not to tackle and of sticking to the decision. According to Dr. Richard Romalt, good strategy is surprising. It's surprising because very few people truly deploy it. As he wrote, "The first natural advantage of good strategy arises because other organizations often don't have one, and because they don't expect you to have one either." In this chapter, we will discuss the importance of choosing and following through on a focused path based on your impossible goal. Choosing a focused path. Two roads diverged in a wood, and I, I took the one less traveled by, and that has made all the difference. Robert Frost. Just in six weeks after his first company failed, Blake Murray, a man in his late 20s, developed a business concept that would soon be a fast-selling company he'd sell for $2.5 billion. It was April of 2016 in Utah, and Murray had recently attempted his own business, which in his own words, failed miserably. Though disappointed, Murray was more perplexed than anything. He simply wanted to understand how in the world he had failed so badly. Immediately after shutting his business down, he dug deep into auditing the problems of what went wrong. What he found surprised him. In analyzing the situation, he realized he'd never been clear or up to speed on the financials of his business while in the day-to-day running of it. This was back in 2016, when financial reports used by business owners were typically on on a 30 to 60 day lag. behind real-time income and expenses. Though not optimal, this was just what the system was back then. By not being fully aware of his financials, Blake felt he had made missteps that ultimately led his business to fail. In seeking to understand everything about the financial process, Murray researched application programming interfaces, APIs for credit cards and how they work. He looked into all existing financial tracking, reporting, and protection software. His main questions were, is there something that technically existed to provide real-time and accurate financial information? And is something like this even technically feasible? By feasible, what I mean is theoretically and technologically possible, where the bank and the software are one and the same. He explained in a 2024 podcast interview. Murray came to the startling realization that there was no simple and immediate way he could get a snapshot of the financial health of his business. The existing processes were complex, convoluted, and extremely lagging, leaving the business largely in the dark about what was going on. The deeper he drilled into the problem, the more he saw its ubiquity. "This wasn't just a meat thing," he explained. "This isn't just my problem. Everyone who has built a small business and had to manage a payroll has dealt with this. And it's the fear that keeps you up at night. How am I going to manage payroll? Do we have enough money to operate?" Just two weeks into this learning process, and before validating the concept with trusted friends and family, Murray began investing his own money in this new project. He felt a conviction and profound pull that this was an enormous opportunity. He couldn't stop thinking about it. It was not only a no-brainer, it was pulling me toward it. He brought on a co-founder, Alex Bean, a long-term friend who'd quit his job building software in order to join Murray during the initial weeks of Murray's research. The first big aha for Murray was that their indeed was no existing real-time bridge between financial software and the banks managing the money. The existing financial software, such as Concur and Expensify, didn't attempt to provide real-time financial data, but instead, powerfully supported the then-normal process of a 30-to-60-day lag time for getting your financial data. Though they didn't yet have a viable business model or even a draft of the software, Murray and Bean knew they'd clarified an industry-level problem, one that affected literally every business in the United States at least, but also the world. In just a few weeks since he began exploring, Murray had obsessively gone so deep into researching the situation that his conviction was sky high. With Bean's software capabilities and insight, they were ready to start swinging for the fences. One day, to test their hypothesis, Murray walked into a random US bank in Salt Lake City, Utah. He requested to talk to the bank manager and convincingly pitched her on the idea of Divi, the would-be name of the company. Reporting on this conversation, Murray stated, "She was blown away. She was equally as lacking in knowledge and acumen as I was in terms of the software, but she was blown away to the extent that as a bank manager, she began making calls on my behalf. She felt this was something so unique and special that she had to go send it up the chain. It got to the C-suite of US Bank, which at the time was the fourth or fifth largest bank in the United States. The next month, in May of 2016, Murray and Bean were in a meeting with 15 or so of the C-suite leaders of US Bank. They had nothing built but a slide deck to explain their concept, in addition to their intense convictions and Murray's persuasive storytelling. Murray described this crucial meeting on the podcast. We walked in with the same confidence, perhaps a little too much bravado, and gave them the pitch that this was the future of where they needed to be headed. And frankly, if they didn't partner with us, that we were going to take their wallet share. The interviewer laughed and responded, "You walked into the fifth largest bank and said, 'You can come with us or you can get run over by us.'" Murray continued in response with excitement and passion. One of the primaries, if not the primary job of a CEO, is being, not becoming, but being an elite storyteller. So before you can give yourself permission to make that kind of claim, where you're not going to get laughed out of the room, where you actually have credibility, you have to be able to tell the story where every one of them is now leaning forward, looking you in the eye and nodding vigorously in agreement with everything you're saying. So the presentation was predicated on convincing them that not only were we right, but that they had to work with us, because if they didn't, someone else would. What was the outcome of that meeting, the interviewer asked? We walked away with a master agreement from them that had a guaranteed seven-figure minimum in it. From there, that's where I began leveraging that commercial agreement into a friends and family investment round. I was able to look people in the eye and say to them, "Look what we've been able to accomplish in only six weeks." The six weeks was since Murray's prior company had bombed, and in that time he discovered and verified a massive opportunity brought on Bean as his co-founder and convinced one of the largest banks in the world to partner with them as an investor. Now that Murray and Bean understood the problem they were solving and were committed to creating an innovative software that provided real-time financial data, they sought to clarify a viable business model. Given the enormity of what they were taking on, they were going to be competing with the major banks and credit cards of the world, such as Wells Fargo, Visa, and American Express. They felt having an innovative software wasn't enough to compete and scale. They'd also need an innovative and no-brainer offer, one that couldn't be ignored by their target market. While digging through contracts from a number of credit card companies, they learned something that shocked them. The credit card companies would pay them for every client they had both open and use their credit cards and not just pay them but pay them a solid percentage, one to three percent of every transaction on the cards. The more their clients used the credit cards, the higher the percentage they received. As they began doing the math, they came to a bold insight and decision that they'd offer their robust software to the client for free and that their financial model would be via the credit card companies, not their clients. In an interview for this book, Alex being told me, we actually needed to scale quickly because if we hadn't, we wouldn't have gotten the higher percentage of credit card expenses. Though increasingly popular now, in 2016, this model had never been done and went completely against what all other SaaS software as a service companies were doing. Of course, when Murray and Bean explained this unique business model to their investors, they got concerned responses. "You can't give the software away for free," they were told. "But they were completely convicted." They knew that to cut through the noise and scale fast enough for the credit card percentage to reach maximum profitability, their offer had to be an absolute no-brainer for the small-to-mid-size businesses that were in their target market. They would provide game-changing new software that would massively improve their client's financial process and record-keeping for free, but require them to use divvy credit cards which were linked to the software. As Murray and Bean came to further understand the percentages of the credit card companies, it was clear they'd be making nearly 5x with the other SaaS companies we're making without charging the clients at all. Being paid by the credit card companies was a more predictable and powerful revenue model than the SaaS itself. Their primary hurdle was getting people to open a new credit card which would be connected to the divvy software. However, this proved to not be a hurdle at all for one primary reason. The offer was so clearly better than anything else in existence that whoever sold it whether Murray or Bean in the beginning or their sales team had complete conviction when explaining the power of the technology and the fact that it was free. Of the marketing process, Murray explained, "If we want to compete, if we want to steal customers from Chase Bank, Wells Fargo, American Express, I want to be able to go to that customer and offer them that same $1 million line of credit that Chase Bank is offering, and then a powerful suite of software that is just loaded, that they can't ignore, that they'd get in trouble from their boss if they didn't adopt this suite of software. Once the concept and business model were fully in place and they'd raised funding to hire and build the product, they spent the next two years from mid-2016 to mid-2018 perfecting the software. They didn't rush to market with a minimum viable product and perfected over time. They felt so strongly about the need of their software, as well as the power of their business model offering it for free that the product had to be phenomenal from launch. When Divi formally launched in mid-2018, it was extreme scale from day one and no looking back until they sold three years later in June of 2021. In the second half of 2018, they did $7 million in revenue. In 2019, they did $35 million in revenue. In 2020, they did $75 million in revenue. In 2021, they did over $150 million in revenue and were acquired by Bill.com for $2.5 billion. This was one of the fastest and most aggressive scales of its kind. Importantly, Divi didn't scale anything but their core product. In fact, when interviewing Alex Bean for the This book, he told me that when Divi sold, the software was almost the same as the conceptual model they'd presented to the US Bank C-suite team with only a PowerPoint. From the beginning, Murray and Bean wanted to rapidly scale and sell this company, and they had convictions that it would be huge. This desire led them to really thinking through a scalable business model, which was revolutionary to what everyone else was doing. Once they had the business model in place, and after perfecting and launching the product, as a team they only had one focus, scale their singular product as fast as humanly possible. They measured their growth via monthly revenue. That was their only measurement. When interviewing Bean for this book, I asked if they had any other products or offerings other than their core product, the free software service with Divi credit cards. "No," he told me, "we had one product, and we were extremely focused on scaling only that one thing. Did you ever get distracted trying other products or offerings I asked?" "Of course, it's nearly impossible to not be distracted, but nothing provided even a fraction of the revenue of our product, and so very quickly we'd weed everything else out, and continue pushing our product as far as it could possibly go." Simplified to scale, "I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity." Oliver Wendell Holmes. To scale a system, you must simplify it. You must be focused. It doesn't matter how brilliant you are or how brilliant your solution is to an important problem, if your delivery is complex or confusing, you won't scale. Take for example, CellCore, a health supplement company. Started in 2017 by two highly specialized doctors, Dr. Todd Watts and Dr. J. Davidson, CellCore provided probiotics to improve people's gut health. The supplements provided by CellCore were essential and cutting edge. But there was a problem, CellCore offered too many supplements for clients to know which ones were most important. From the perspective of Watts and Davidson, all of the supplements they offered were essential to getting a person's gut and therefore their health to an optimal level. By the end of 2017, their first full year, CellCore was doing around $500,000 in revenue. Despite it being pretty strong growth for the first year of the company, Watts and Davidson knew they weren't suited to run or scale this company on their own. They were teachers and practitioners at heart. They needed a CEO, someone who could organize, focus, and magnify what they were doing. In January of 2018, Watts met a man from his church, Ryan Riley. On a personal visit at Watts' home, Ryan stopped by and introduced himself. He simply asked, "How can I serve you?" Watts told him, "I need to find a CEO for my company." Riley began asking questions. He found that CellCore had no brand. They had very minimal marketing. The sole form of marketing happening was Dr. Watts and Dr. Davidson going on online summits in the health space to talk about their products and to promote them. At the time, Riley was the CTO of a technology company, which he'd helped scale. For the previous few years, he was looking for his next big opportunity. During that single conversation with Watts, it became clear to Riley that this was something he could scale. "You're going to get a lot more out of me than you expect," he told Watts. Once they agreed, he would be the CEO of CellCore. During that first year, Riley worked literally for free as he was on a handsome salary with his previous company, though he was only required to do about five or so hours of work per month over there. As Riley dug into the company, it became immediately obvious to him that everything needed to be simplified, especially the product offerings. Riley ultimately decided that he needed to take all of their many supplements and turn them into a single concept, which he called the protocol. With the protocol, people would get all the gut health supplements they needed in a single system with clear and simple instructions. It was a six-month process to transform the health of its user all in a single program. By shifting the seven-plus supplements into a single product and system, CellCore now had a scalable product and concept. By making a scalable product system, amplifying Dr. Watts and Dr. Davidson's profile and increasing the marketing, Riley took CellCore's revenue to $5.9 million in 2018, over $10 X from the $500,000 in 2017. In 2019, CellCore's revenue was $13.7 million. In 2020, CellCore's revenue was $26 million. In 2021, CellCore's revenue was $46 million, in 2022, CellCore sold for $200 million. During the final stages of the sale, Riley recognized that positioning Dr. Watts as both the face and CEO of CellCore would create a stronger narrative and enhance the company's overall value. To support this vision, he chose to step down as CEO at the very end, further elevating Watts and solidifying the brand's future. This move alone made the company go from $150 million in value to $200 million. CellCore was a strong concept before Riley became CEO, but it wasn't focused. It wasn't a simple enough system to scale. Riley came in and took something complex and made it simple and therefore scalable. With that scalable model, Riley put rocket fuel behind it with his energy, marketing, and commitment. This chapter brings a few crucial concepts together. The first is that if you're not focused, you're going to stagnate and falter as Nike recently demonstrated. The second is that if you don't choose a focused path and keep the main thing the main thing as Divi did, then you won't scale. Yet you won't identify this focused path without doing the work. That work is clearly identifying an important problem than building a powerful and scalable solution. For Divi, that was giving away their cutting-edge software for free while being paid by the credit card companies. No one else was doing that at the time. Third and finally, if your business model isn't simple and focused, as CellCore's became once Riley created the protocol, then you won't scale. You can't scale a complex system. To scale, you've got to do the hard work of taking something extremely complex and making it simple, yet powerful. Journal prompts and applications. How focused is your path toward your impossible goal? Is your path based on best practices of what everyone else is doing, or is it based on your unique perspective and solution? How scalable is your business model? Go to scaling.com/book1 and complete the form to evaluate your current readiness to scale.