Beware of Shiny Penny Syndrome

Shiny Penny Syndrome (SPS) tends to affect CEO's at small, growing companies. SPS is like the Soup Du Jour, but in this case it  involves the CEO being focused on a new, shiny opportunity or feature that he or she thinks the company should incorporate into the product. The result is a lack of focus and execution on the core business and confusion run amok across the company.

When Salesforce.com started out they concentrated on going after on-premise contact or sales management systems. As they proved their business model only then did they branch out into new areas like marketing and customer service. I am sure they were tempted by some shiny pennies at the time, but they focused on the core business model and product to become the force they are today. A firm with SPS will have the opposite growth trajectory as the impact crosses many departments, including:

• Sales: Unable to come up with the core elevator pitch since they are constantly hearing about "what's next or what is coming." The result is spending time on prospects that may not be a fit for your service, taking time away from strong leads and slows down the funnel.
• Marketing: A marketing department dealing with SPS resembles my 4 year old daughter's finger painting. Lots of colors, but no focus. Marketing is not able to come up with the core value proposition and benefits. As a result, marketing can target the wrong accounts while not reaching the true A-level prospects.
• Product Development and Engineering: The inability to build a clear roadmap with priorities and timelines for delivery. SPS makes it hard to prioritize the most important items because the CEO keeps giving them a new shiny penny and classifying it as high priority.
• The Board: Unable to set long term strategy for growth as the business model is constantly changing.

As you can see, SPS can negatively impact a firms ability to grow at the pace needed and promised to investors. Now, I am not saying you should not be looking at other markets or uses for your product, but first you need to execute and deliver on your core product to your defined market. As the saying goes, Rome was not built in a day so suppress your urge to find the next shiny penny.