Why Most Profitable Businesses Die (The Unit Economics Trap)

Full breakdown on unit economics, saying no, and protecting your time: [watch the episode]

Most businesses don’t fail because they’re not good enough. They fail because they got distracted.

You’re building momentum in one market. Getting traction. Your name is spreading. Then someone calls with an opportunity in a different geography. New market, similar business, real money.

You say yes.

Six months later you’re twice as busy and not actually growing.

Here’s what happened: You left before you finished building.

The Pattern

Let’s say you’re operating in one market. Could be a city, a region, a vertical. You’ve served 500 customers there.

Things are going well. Referrals are starting to happen. Your brand is building. You’ve got real momentum.

Then someone offers you an opportunity somewhere else. Different geography. Same type of work. The deal is sitting there.

You take it. Because more markets feels like more growth.

Here’s what you tell yourself: Current revenue plus new revenue equals bigger business. I’m expanding.

But that’s not what happens.

What Actually Happens

When you split your focus, you lose more than time. You lose momentum.

In your original market—where you had traction—everything stops compounding. The relationships you were building slow down. The referrals that were starting to flow taper off. Your presence stalls out.

You’re not there anymore. So your brand stops spreading.

In the new market, you’re starting from zero. No relationships. No brand. No referral engine. Every deal is a cold start.

You’re working twice as hard. But you’re not growing twice as fast. You just added complexity without leverage.

The momentum you had in market one? Gone. The advantage you could’ve built by staying focused? Lost.

Here’s What You’re Missing

In that first market, you served 500 customers.

But there are 5,000 more you haven’t reached yet.

People who already know your category exists. Who are already buying from someone. Who you could win if you just stayed focused.

The next 500 customers in your current market are way easier to get than the first 500 in a new one.

You already have some brand recognition. Some referrals building. Some operational efficiency.

In the new market? You have none of that. You’re grinding from scratch.

But the new market feels exciting. It feels like progress. So you go anyway.

Where This Shows Up

An agency is running Facebook ads for e-commerce brands. They’re building a reputation. Getting results. Then someone asks if they also do web design.

They say yes. Now they’re competing with actual web development shops while learning a completely new skill. Meanwhile, their Facebook ads business—the thing that was actually working—stops growing because they’re not focused there anymore.

A SaaS company is serving 50-person teams. They’re getting real traction. Then one enterprise company shows interest. So they rebuild their entire product and sales process for that one opportunity.

Now they’re learning how to sell to a completely different buyer. Their core market stops growing because all their attention went to chasing the shiny enterprise deal.

A real estate agent is closing deals in one county. Then they get offered opportunities three counties away. They take them.

Now they’re spending 10 hours a week in the car. Those same 10 hours could’ve been used prospecting in their own backyard. They could’ve closed 3x the volume at higher prices locally.

Same mistake every time: They see something new and call it growth. It’s not growth. It’s distraction.

The Question

Before you say yes to any adjacent opportunity, ask:

Have I reached most of the people in my current market who need what I do?

If there are still thousands of potential customers right in front of you that you haven’t touched yet, you don’t have a growth problem.

You have a focus problem.

Those 5,000 customers in your current market are easier to reach than 500 new ones somewhere else.

Why would you abandon momentum to start from scratch?

What Discipline Looks Like

Staying focused means doing things that feel boring.

It means watching competitors expand while you stay put.

It means saying no to real money because it’s the wrong money at the wrong time.

It means serving the same customer in the same place until you’ve actually saturated it.

New opportunities feel like progress. Depth feels like standing still.

But depth is where you build something real. Breadth is where you stay busy without leverage.

When to Actually Expand

Here’s the test:

Have you reached at least half the people in your current market who could buy from you?

If no, stay where you are. Keep going deeper.

Not because the new opportunity is bad. Because leaving now means walking away from compounding to start over.

Saturate your market first. Become the default choice in one place. Build so much density that referrals happen without you pushing.

Then expand.

That’s how you actually grow.

Full breakdown on staying focused, how to know when you’ve saturated a market, and why depth beats breadth every time. Full episode [here].