Focus and Honesty

A few months ago, I was sitting with our head of sales going through the pipeline. We’d been telling ourselves a story for about a year: we did supply chain financing for SMEs — we’d fund their customers directly, take the receivable off their books, and let the small supplier get paid on day one instead of day ninety. The pitch was clean. The market was huge. Any SME with stuck receivables was, in theory, a customer.

What it did not do was produce a coherent pipeline. The reps were onboarding a packaging supplier one week and a small auto-component shop the next and a specialty chemicals exporter the week after that. Each deal meant a fresh credit memo, a new set of buyer counterparties to underwrite from scratch, a new legal structure for how the assignment of receivables would work in that industry. We were funding invoices, but slowly, and the post-mortems were all the same: we just need to specialize the playbook for this segment.

There were, by this logic, about forty segments.

I remember walking out of that review and thinking — we are being dishonest with ourselves. We had not picked an ICP. We had picked a demographic. A demographic is not a strategy.

I’ve been thinking a lot lately about focus and honesty, and how strangely connected they are.

They sound like separate virtues. Focus is about doing one thing. Honesty is about telling the truth. You can imagine a focused liar, or an honest dilettante. In most contexts the two have nothing to do with each other.

But in a startup, I think they collapse into the same thing.

Here is what I mean. Focus, properly understood, is the ability to shrink your circle of concern down to something so small that you can throw all your energy at it. Not “we finance SMEs” but “we finance the dealer network of one specific FMCG anchor in north India.” Not “we’re improving developer productivity” but “we cut the time it takes a backend engineer to write a database migration.” The smaller the bullseye, the harder it is to miss it on purpose.

And that’s where honesty enters. Because once the target is small enough, you can no longer hide from whether you hit it. A vague target is a kind of escape hatch. If you said you were financing SMEs and you funded a packaging supplier and an auto-component shop and a chemicals exporter, you can tell yourself you’re doing fine, because all three are technically SMEs with stuck receivables. The looseness of the goal absorbs the looseness of the execution. Nobody — including you — can tell whether the strategy is working, because the strategy is too soft to fail.

If you said you were financing the dealers of one FMCG anchor and you funded an auto-component shop, you have a problem you cannot lie your way out of. Either you change the ICP, or you admit the salesperson is off-piste, or you concede the anchor’s network is harder to penetrate than you thought. All three are uncomfortable. All three are honest.

I think this is why honesty is so much harder than it sounds. Most people, asked if they are honest, will say yes. And in some narrow sense they are — they don’t tell deliberate lies. But honesty is not really about lying. Honesty is about representing reality. And reality is genuinely hard to get right, partly because the thing we’re trying to represent — the world — is only ever available to us through our perception of it.

Two people can sit through the same board meeting and walk out with completely different stories about what happened. Not because either is lying, but because one came in anxious about runway and heard every comment about growth as a threat, and the other came in proud of last quarter’s numbers and heard the same comments as validation. Same facts. Different filters. The mood you bring to the data is half of what the data says.

This is the part I find genuinely difficult. If you’re depressed, your honest read of the company will be too negative. If you’re high on a recent win, your honest read will be too generous. There is no clean version of the truth available to you. There is only your current perception, which is always being colored by something — sleep, the last argument with your cofounder, whether your kid was sick this week, whether you’re up or down on the personal side.

What you can do, though — and this is where focus comes back in — is set up the work so that the perception bias has less room to operate. The smaller and crisper the goal, the less your mood matters when you’re evaluating progress. “Are we growing?” is a question your mood will answer for you. “Did we onboard two new dealers from the anchor’s network this week, and did we disburse against their invoices?” is a question that has an answer regardless of how you feel about it.

When you combine these two — a small target and the honesty to measure yourself against it — something interesting happens to speed. Execution gets fast in a way that surprises you.

I used to think speed was about hustle. You wanted speed, you hired people who worked hard, you ran tight standups, you cut meetings. Some of that helps at the margin. But the real determinant of speed, I’ve come to believe, is the size of the bullseye. A focused team moves fast because every person knows what counts as a win this week and what doesn’t. A diffuse team moves slowly even if every person is working sixty hours, because half of those hours are spent on things that don’t compound.

Going back to the supply chain example — the moment you say “we finance the dealer network of one FMCG anchor in north India,” your entire company can rally. BD knows exactly who to court (the anchor’s treasury and channel finance team, not forty different SMEs cold). Credit knows what they’re underwriting (the anchor is the real obligor; the dealer is the conduit), so the memo gets shorter and the model gets sharper. Product knows what to build (a dealer onboarding flow that plugs into the anchor’s DMS, invoice ingestion from one ERP, one repayment waterfall). Collections knows what good looks like, because every dealer in the program has the same buyer at the other end of the receivable. You get density. Density compounds. Each new dealer onboarded makes the next one cheaper, because the anchor is already integrated, the legal is already papered, and the playbook works.

Compare that to “SMEs with stuck receivables.” BD doesn’t know who to call. Credit is underwriting a different buyer counterparty in every deal, which is the actual hard part of the work. Product is buried under contradictory requests, because the chemicals exporter wants USD invoice discounting and the packaging supplier wants a domestic factoring line and the auto-component shop wants an OEM-anchored program — three different products with three different risk profiles. Every deal is the first deal in its segment, so nothing compounds. You run hard and the wheel doesn’t turn.

This is why I now think focus is the upstream variable. Speed is downstream of focus. Honesty is what tells you whether the focus is real or just a slogan.

The diagnostic I’ve started using on myself, and on the team, is this: if you can’t tell me in one sentence what would count as a win this week, you don’t have focus. And if you can’t tell me by Friday whether you hit it, you don’t have honesty. Both failures look like busyness. Both feel like progress. Neither is.

When I look back at the year we spent calling ourselves an SME financing company, I don’t think we were being lazy. We were working extremely hard. The BD team was doing eight calls a day, the credit team was turning memos around fast, the tech team was shipping. The problem wasn’t effort. The problem was that the target was wide enough that effort didn’t aggregate into anything. We were a lot of people running in slightly different directions, each of us telling ourselves an honest-feeling story about why our direction was the right one.

The fix wasn’t to work harder. The fix was to pick a smaller target — uncomfortably small, small enough that some of the team’s existing pipeline would obviously not fit inside it — and then be honest about what counted and what didn’t.

I don’t know if I’m fully right about this. There’s a version of the argument that says focus is a luxury earned by companies that already have product-market fit, and that early-stage startups have to fish broadly until they catch something. I’ve heard smart people make that case and I’m not sure they’re wrong. Maybe we should have stayed wide for longer. Maybe the anchor-led version of us, in some parallel timeline, narrowed too early and missed the bigger opportunity — the standalone SME who had no anchor at all but desperately needed the money.

What I am sure of is that the year we spent being deliberately vague was not the same as the year we spent being deliberately broad. Vague is not a strategy. Vague is what you call it when you haven’t decided, and you’re hoping the lack of decision will turn out to have been wise in retrospect. It almost never does.

The bullseye has to be small enough that you can tell, on a Friday, whether the arrow landed. That’s the test. Everything else is decoration.