When to Explore. When to Focus.

30 Nov

How Side Projects become successful

At my agency, we built several side projects. I did a mental tally and I think in all we built 15. Some of them came to nothing, some of them did OK and we ended up selling them to acquirers, but one was a runaway success, currently generating Tens of Millions of Dollars in ARR. Why did that one (ScreenCloud) do so well, where the others were either failures of mediocre at best?

I think it comes down to one word: Focus.

All of the other projects stayed as side projects because we made no real effort to make any of them the main project. Maybe we thought one of them would magically blow up and it would become obvious what we needed to do. At the same time, I imagined having a portfolio of modest side products wouldn’t be a bad outcome, either.

But I was wrong. Nothing magically blows up. And having a portfolio of side products wouldn’t have gotten us remotely close to what ScreenCloud achieved.

Agencies and consultancies are idea factories by nature. They solve problems for clients daily, generating countless ideas for products, tools, or frameworks that could potentially become standalone businesses. So it’s no surprise that some of those ideas become initiatives that they want to try themselves, rather than give to clients.

But turning an idea into something significant takes more than just creativity.

It needs the founders to go on a deliberate journey from Exploration to Transition, and ultimately, to Focus.

The Three Phases of Innovating out of an Agency

1. Exploration: Planting Many Seeds

I think our initial hunch of trying out ideas: building them and putting them out there wasn’t a bad one. It allowed us to understand what would work and what things to avoid. It also gave us a ‘feel’ for what being a product company involved.

The exploration phase could be about generating ideas and testing them in the real world. But it could equally be about testing which ICP you need to focus on (as opposed to trying to be all things to all people).

This is nothing new. Eric Ries, in his book, The Lean Startup talks about learning how to experiment, build Minimum Viable Products (MVPs), and gather feedback to identify viable opportunities.

During this phase, agencies:

Build small tools or apps to solve internal problems.
Launch side projects to test new markets.
Start to see where their ideas are resonating most within specific markets.
Experiment with pricing and go-to-market strategies.

It might be that you don’t necessarily launch 15 products like we did. Maybe you only launch one. But my point here is, it’s OK to play around with different ideas: just come up with some plans, or build MVPs, or actually launch something. Maybe you’re lucky first time around, or maybe it will take a few attempts.

Key takeaway: The goal in this phase isn’t perfection; it’s learning. Experiment widely, gather feedback, and pay attention to where the traction lies and with whom.

2. Transition: Picking a Winner

The transition phase is the hardest for most agencies. It involves making the difficult decision to stop spinning multiple plates and focus on one idea that has the potential to grow. People often ask what made us choose ScreenCloud as 'the one.' The truth is more nuanced than they might expect. Although we believed in the idea and saw potential in the digital signage market, ScreenCloud wasn't obviously better than anything we’d done before. Our key realisation wasn't about ScreenCloud specifically (although there were some positive signals) - it was understanding that we needed to focus on something. ScreenCloud was a solid opportunity in a growing market, and that was enough. We didn't wait for absolute certainty or some clear sign that this was destined to be our big winner.

In Seth Goodin’s book, The Dip, he explains when to push through challenges and when to quit, helping businesses navigate the critical transition phase.

This phase requires:

Evaluating traction: Which project shows the most promise in terms of revenue, customer demand, and scalability?
Making tough calls: Deciding to sell, shut down, or pause other side projects and, in some cases, the core agency itself (not an absolute requirement, see below).
Shifting resources: Redirecting team time, budget, and mental energy to the chosen project.

This phase is hard, scary and unpleasant. I would say it was one of the most stressful parts of my career because we were at our most exposed and with nothing but faith that this was the right thing to do. We were simultaneously trying to run the agency, sell the agency, build out our SaaS and raise investment for it. At this stage it was about coming up with a plan that we could all agree on and going for it. It meant shedding a lot of the things that gave us comfort: our passive-income side projects and our agency (that paid our mortgages and put food on our tables).

Key takeaway: Transitioning means saying “no” to many good ideas so you can say “yes” to the best one.

3. Focus: Scaling the Business

The final phase is about execution. With the distractions eliminated, the team can concentrate fully on scaling the chosen idea. This phase is where focus compounds into success.

In The One Thing, by Gary Keller and Jay Papasan, they talk about aligning all your energy and resources toward a single focus for greater results.

When we ultimately decided to focus entirely on ScreenCloud, something happened. When our side thing became our main thing, it flew. The closest we’d ever been to this before was when we found a CEO to run one of our other side projects. It did better than any of our others because of the focus having a full-time person on board made. But this was the first one where we as the founders were 100% committed to one thing. And the results were like night and day compared to anything we’d done before.

Key takeaway: Success comes when you align your energy and resources behind a single, scalable vision.

Can this really be true?

Does focus makes that much of a difference? I mean, we’ve spent our careers multitasking: bringing our A Game to multiple projects at the same time. Surely, we can manage two or more things simultaneously and have success across the board?

The more I work with founders, the more I see this lesson again and again. Think of it this way: you have a finite amount of resource. If you spread that resource across 10 different things, will any of them be as successful as the one thing you chose to put all of your resource into?

I remember coming into the office, having closed our funding round and sold our agency and having this sense of elation that we had the time and the headspace to just get ScreenCloud to be a winner. From then on, it was like being strapped to a rocket ship.

Imagine if someone gave you enough money for you not to have to worry for a few years and in return you had to focus on only one product idea. You had no other work distractions. How much do you think you could achieve in that time?

My journey isn’t the only one

One final thought: it's perfectly valid to build side products that remain side products. There's nothing wrong with creating a portfolio of smaller products that generate additional revenue alongside your main business. Just be clear with yourself about your goals. If you're happy with modest success across multiple projects, that's fine - but don't expect any of them to become runaway successes without the focused effort that significant growth demands.

What if you have ambitions beyond the ideas staying as side projects but at the same time, don’t want to give up what you’re doing today? What then? Then you absolutely have to find good people to run them. People as good as you, if not better. Experienced people with skin in the game. And that’s a whole topic for another time.

David Hart