Strategy · Proving to Organising
Your sandbox
You write down where your company plays, by region, target audience and product, and what it says no to, even if you've just changed course.
Does this sound familiar?
- A client from a completely different industry asks for a quote, and you say yes because it's revenue.
- Your team has a different process for every job, because no two projects look alike.
- A salesperson is on the phone with a prospect in Germany, and nobody knows whether you want to be there.
- Six months ago you decided to focus on one type of customer, and the website still talks about the old ones.
- Every year a product gets added, and none ever gets dropped.
Who it's for, and when
For founders who notice they take on all sorts of work and so never get really good at anything. It's the question of Proving: which segment responds most strongly, and what do you say no to? In Organising you pin it down, so your team can make decisions with it themselves. In Searching it's still too early: you don't yet know which field you can win.
The model
“The essence of strategy is choosing what not to do.”
The sandbox is the playing field where you want to become the best. Verne Harnish puts it on the One-Page Strategic Plan as a boundary drawn along three lines: where you work, who you work for and what you deliver. Everything inside those lines you do with full force. Everything outside them you leave alone, even if it would make money. The lesson Your core customer describes the one person within this group, and the lesson Success strategies covers how you win in this field.
Michael Porter wrote in 1996 that strategy is mostly about choosing what you won't do. If you play a bit everywhere, you have to be a bit good everywhere. If you pick a smaller field, you can shape your people, your processes and your name around it.
A sandbox is only sharp when it rules something out on all three lines. 'The Netherlands, SMEs, advice' rules out almost nothing. Adding a size, such as a team of 10 to 50 people, already helps. Add an industry and it gets properly sharp: 'Randstad, installation companies with 20 to 100 people, maintenance contracts'. The test is simple: can you name a customer you'd turn down?
How fixed it is depends on your phase. In Proving you're still finding it: you look at which segment responds most strongly, and a pivot can turn it upside down within a quarter. From Organising onwards it stays put for three to five years. You can widen it later, once you're really winning the field you chose. The other way round usually goes wrong: starting broad and narrowing later costs you customers, people and money.
Verne Harnish, Scaling Up (2014): the sandbox on the One-Page Strategic Plan. The idea behind it comes from Michael Porter, What Is Strategy? (Harvard Business Review, 1996).
Geography
Where do you deliver, and where don't you? A region, a country, the Benelux. Think about travel time, language, regulation and where your people live. 'The whole of the Netherlands' is only a choice if you also say why not Belgium.
Target audience
What kind of companies or people do you work for? Industry, size, phase. This is a group. Who your ideal customer is within that group goes in the Core customer box.
Product or service
What do you deliver, and what do you deliberately not deliver? What you've stopped doing belongs here too, such as custom work you're winding down or a product line you're phasing out.
What falls outside
For each line, write down what you turn down: a region, a type of customer, a service. That's the part your team makes most of its decisions with.
When you pivot
If it turns out in Proving that another segment responds much more strongly, or your business model doesn't fit, the sandbox moves. Make it a decision: rewrite the three lines, with the date and what you saw. Agree what you'll do with customers outside the new field: keep them until the contract ends, refer them on or wind them down. And tell sales and planning in the same week, with the new line for saying no. A pivot that only lives in your head leaves your team carrying on in the old field.
Pitfalls
Only writing down what you already do
Then the sandbox becomes a snapshot of your client list. Also look at where you want to be the best in three years' time, and what has to go to get there.
Exceptions that become the rule
You take on one customer outside the field once, because it has to be a good year. Then another. A year later a good share of your customers no longer fit, and nobody ever decided that.
Not telling your team
Your salespeople and planners decide every day what you take on. If they don't know the sandbox, they're the ones who set it.
Watch and read
A clip from Thiel's lecture in Y Combinator's How to Start a Startup series (2014): start in a small market you can really win, and only expand after that.
Watch on YouTubeA Y Combinator partner on pivoting: when to change course and how to go about it. A long lecture, for when you're not sure you've got the right segment.
Watch on YouTubeRead
Scaling Up: How a Few Companies Make It... and Why the Rest Don't
Verne Harnish · 2014 · ISBN 9780986019524
The source of the sandbox on the One-Page Strategic Plan: where you play and where you don't. Also published in Dutch as Scaling up: de groeiformule (Business Contact, 2016, ISBN 9789047008682).
View the bookUnderstanding Michael Porter: The Essential Guide to Competition and Strategy
Joan Magretta · 2012 · ISBN 9781422160596
A readable guide to Porter, with a chapter of its own on trade-offs: choosing what not to do. Thinner and easier going than Porter himself.
View the bookApply it
- 1
Look at your best customers of the last two years
Which customers brought in the most margin for the least effort? Where are they, what kind of companies are they, and what did they buy? Your sandbox is usually there already.
- 2
Write one sentence per line
Geography, target audience, product or service. Concrete enough that a new salesperson can use it to decide whether to call a lead.
- 3
For each line, write down what you turn down
Name a real region, a real industry, a real service that falls outside. If you can't, the line is too broad.
- 4
Hold it up against your current customers
How much of your revenue falls outside it? That doesn't have to go tomorrow. Agree what you'll do with it: wind it down, refer it on, or deliberately let it run until the contract ends.
- 5
Tell the people who say yes and no
Sales, planning, account managers. They're the first to get the requests from outside the field. Give them the line they use to say no.
Examples
Template for the box
Where: ... Outside: ... For whom: ... Outside: ... What: ... Outside: ... The line sales uses to say no: 'That's not something we do. [Name or company] is good at that.' Agreed on: [date]. What we saw: ... Review again on: [date]
An installation company
Where: within an hour's drive of Utrecht. For whom: housing associations and owners' associations (VvE's). What: maintenance and replacement of central heating and ventilation. Outside: new-build projects, private households and solar panels. The new-build work brought in revenue but ate up planning and people.
A software agency after a pivot
Before: the Netherlands, fashion webshops, integrations with their stock system. After a year the follow-on work came mostly from logistics providers, whom they'd got to know through one client. They rewrote the sandbox: the Netherlands and Flanders, logistics companies, integrations around their planning system. Outside: webshops and apps. Existing webshop clients kept their maintenance until the contract ended, new ones were referred on. Sales got the new line the same week.
An accountancy firm
Where: the Twente region. For whom: family businesses in manufacturing. What: annual accounts, tax advice and succession. Outside: freelancers and personal tax returns. They referred those to a fellow firm, and got manufacturing clients back in return.
Do this in your own business
Everything up to here is free. What you fill in for your own business, you keep in Boldcaster.
- You write the Sandbox section of your strategy, and it stays on your strategy page.
- You assign the lesson to your team and see who has done it.
- The quiz counts towards your progress, and you see which lesson comes next.
Four weeks free. You'll land straight in this lesson.
Quiz
6 situations. You need 5 of 6 right. You can try again at any time.
1.An agency's sandbox reads: 'The Netherlands, SMEs, advice and delivery.' What's the problem?
2.A software agency has a sharp region and a sharp target audience, but builds whatever those customers ask for. What's missing?
3.A founder puts this under target audience in the sandbox: 'Petra, 45, operations director, stuck in Excel.' What's wrong with that?
4.Three months ago you decided to focus on dental practices instead of all of healthcare. Your salespeople are still calling physiotherapists. What's missing?
5.A salesperson has a warm lead in Germany on the phone. You work in the Benelux. What does he need?
6.You have a sandbox, but in a quiet quarter you take on three customers from outside it. A year later the sandbox no longer fits. What went wrong?
Nothing is saved here. In the app, the quiz counts towards your progress.
Read next
- What you do better than anyone · You name the one capability your company has that others can't easily copy, and that still works when you're not there.
- A brand promise with a guarantee · You write down one promise your customer can check, put its KPI on your scoreboard and work out what the guarantee costs.
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