Strategy and positioning · Answered by Golden Section from more than 400 B2B software companies observed
Strategic focus is one written choice about where the company wins for the next three to five years, followed by three to five priorities a quarter that serve it and an explicit list of what is waiting. For a vertical software company the choice is usually one vertical, one or two segments inside it and one sales motion. Say no to anything outside that choice unless it clears a bar you wrote down in advance, because an adjacent market is closer to a new startup than to growth; a second vertical is usually never the answer. Change strategy on evidence rather than frustration: give a strategy about two quarters of honest measurement before judging it, and move sooner only if the market itself has shifted. Start by writing the one-page plan, including the not-doing list, and asking each executive to name this quarter's priorities without looking.
Hold one strategy, three to five company priorities a quarter and no more than three to five per person. Anything outside the plan needs a written case against the focus it would dilute, and the strategy itself changes only on about two quarters of measured evidence or a real shift in the market. A second vertical is explored only when sales efficiency has drifted past $1.50 of cost per $1 of new ARR, cannot be improved, and pricing is already optimized.
| Metric | Value | What it means | Source |
|---|---|---|---|
| Company priorities per quarter | 3–5 | things the company will finish this quarter; no more than 3–5 per persona list of twelve priorities is a list of none | Golden Section playbookExecution Operating System play |
| Priority completion target | 80% | quarterly priorities completed ÷ priorities settwo quarters below 80% means too many, the wrong ones, or a quarter eaten by other work | Golden Section playbookExecution Operating System play |
| Time before judging an operating framework | four quarters | minimum run before concluding an operating system does not worktwo quarters is the installation, not a trial | Golden Section playbookExecution Operating System play |
| Time before judging a strategy | usually two quarters | measured run before deciding a strategy is not workingsooner only on a real, written-down market shift | Golden Section operating viewGolden Section operating view |
| Second-vertical threshold | past $1.50 per $1 of new ARR | sales and marketing cost per $1 of new ARR in the core vertical, after efficiency and pricing work is exhaustedusually never; only then might a second vertical be worth exploring | Golden Section operating viewGolden Section operating view |
| Mission horizon | 3–5 years | the tactical strategy the mission commits tothe vision is the summit; the mission is the path for the next few years | Golden Section playbookDefine the Mission play |
Focus is a capital efficiency question before it is a management one. A small company that spreads across segments breaks the loop between sales feedback and product, and the vertical specific play describes what follows: a crushing backlog, missed deadlines and technical debt from cramming several verticals into one product. Each initiative looks cheap on its own. Together they take the same engineers, the same sellers and the same founder's week.
Saying no is easier when the yes is written down. A mission that names the customer and the mechanism gives every request a test, and the not-doing list in the execution operating system makes the deferrals explicit rather than quietly ignored. When the team says it is too thinly staffed, our budget creation play reads that as a sign of too many priorities rather than too few people.
Changing strategy is where founders err in both directions. Some abandon a direction after a few hundred emails or one slow quarter, when about two quarters of measurement is what a strategy deserves; others cling to it after the market has moved. The protection against both is the same: decide in advance what evidence would change your mind, measure it, and review it at a fixed quarterly session.
The numbers are fictional. A $4M company enters the year with nine initiatives, including a second vertical, a partner channel, a mobile app and a pricing change. The leadership team scores each against the mission and the year's revenue goal, keeps four, and writes the other five on a deferred list that the CEO reads at the all-hands. The second vertical is the hardest to drop, so the team writes down what would bring it back: cost per $1 of new ARR in the core vertical drifting past $1.50 with no room left to improve it and pricing already optimized. The first quarter completes three of four priorities, which is 75%, and the review finds the miss came from an unplanned customer escalation rather than overload.
A real shift in the market, such as a regulatory change or a customer budget moving to AI, can justify changing course inside two quarters, provided the evidence is written down. And a company still searching for fit can run more experiments, as long as it changes one lever at a time. The narrow exception on a second vertical: when the core market has stopped responding, with cost per $1 of new ARR past $1.50 and no lever left on efficiency or price, exploring another vertical might make sense.
From the Golden Section mistakes list, each paired with the play that prevents it.
Spreading effort across many half-run strategies is the direct opposite of focus.
Adjacent markets are the most tempting way to lose focus, and each one is close to a new startup.
Killing a strategy before it has run long enough to judge wastes the focus already spent on it.
The opposite failure: holding a strategy after the market has clearly moved.
In the order we would run them. Each is on its own page, most with a free Excel template.
Sets the vision that every focus decision is tested against.
Turns the vision into a three-to-five-year path that names the customer and what you will not do.
Chooses the one or two verticals where the company concentrates.
Holds the quarterly priorities, the deferred list and the review rhythm that keep focus from eroding.
Forces the tough cuts when the plan contains more initiatives than resources.
Executive plays Vision, mission, planning and the operating cadence that turn focus into weekly work.
Three to five for the company each quarter, and no more than three to five per person. Below about ten people, three company priorities and five weekly numbers are enough. Anything beyond five is usually a wish list, and the team will work on the easiest items.
Write the bar before the opportunity arrives: what it must add, what it would displace and who would own it. Most attractive side opportunities are adjacent markets, and each one behaves like a new startup inside your company. When one clears the bar, something on the current list comes off. A second vertical almost never clears it. Our view is that it is worth exploring only when sales efficiency cannot improve, has drifted past $1.50 of cost per $1 of new ARR, and pricing is already optimized.
When measured evidence over usually two quarters says the strategy is not working, or when the market has clearly moved. Not after one bad quarter, and not because a competitor announced something. Check first whether the strategy was actually executed, because most abandoned strategies were never run long enough to test.
Focus is a condition for capital rather than a substitute for it. A company with one clear strategy and a structural change to fund is what our equity is built for; a company with nine priorities usually needs fewer of them, not more money.
Growth equity →Reviewed by Dougal Cameron, CEO & Co-Founder on 2026-10-22. Golden Section observations are labeled separately from external benchmarks and illustrative arithmetic.