Focus, exit and investment
Where should we concentrate, and what should we stop?
Exiting or abandoning a product or market, refocusing the company, cutting back, or investing against the cycle.
What the cases suggest
Decisions to stop or refocus were more often right than wrong in this record, and decisions to keep protecting an old product while the world moved were the clearest failures (Lisp machines, Minitel). Leaders who refocused early, such as Microsoft’s shift from OS/2 to Windows and Apple’s ending of the Newton, look better than those who held on.
What separated the decisions that worked
- Exits that freed people and money for a growing alternative paid off; exits forced by customers who had already left were at best mixed.
- Counter-cyclical investment, such as TSMC’s in 2009, worked for a company with a strong balance sheet and diversified customers; the record does not include the many firms for whom it did not.
Where this evidence is weak
Exits are hard to judge because the counterfactual, what would have happened had the company persisted, is rarely knowable.
By who decided
| Decision-maker | Cases | Paid off | Mixed | Backfired | Too early |
|---|---|---|---|---|---|
| Market leader | 8 | 4 | 3 | 0 | 1 |
| Challenger | 2 | 1 | 1 | 0 | 0 |
| Young company | 1 | 0 | 0 | 1 | 0 |
| Public body | 1 | 0 | 0 | 1 | 0 |
The cases
Each links to the essay, memo or road not taken where the decision is described and judged, with its sources.
- After the success of Windows 3.0, shift strategic priority to Windows and away from joint OS/2 development. When customers adopt the option you control, partnership commitments can become a cost rather than an asset.
- Discontinue the Newton platform. Ending a product can preserve the capability to return to its vision when the time is right.
- In the depth of the financial crisis, take back workers who had been laid off and raise capital spending sharply In a cyclical industry, the decisions that decide the next upturn are made in the downturn.
- Redefine Microsoft as “the productivity and platform company for the mobile-first and cloud-first world,” moving the company’s centre of gravity away from Windows and devices. Changing a company’s self-definition can matter more than any single product decision, because it changes which decisions feel natural.
- Cut about 10,000 jobs and 5,000 open roles, remove layers of management and cancel lower-priority projects, while protecting investment in AI and the long-term technology bets. Fewer layers and smaller management spans can speed decisions; measure the number of layers between a decision-maker and the work.
- Reorient the whole of Microsoft around the internet, and treat a browser company as the main threat to Windows. A strategy memo is most useful when it names the specific threat to your core business, as this one did with Netscape and the idea of the browser as a platform.
- Adopt 64-bit x86 for mainstream products while continuing Itanium for high-end servers. Changing course quickly in the market and honouring commitments to existing customers can both be right at once.
- Stop developing Wave as a standalone product about fifteen months after its unveiling, and carry its technology into other products. Killing a product fast can be right, but the way it is ended shapes how people trust the next one.
- Halt development of 7-nanometre and more advanced processes and concentrate on established ones In a scale business, the decision to stop is often forced by the customers who left first.
- Continue investing primarily in proprietary Lisp hardware as general-purpose workstations improved rapidly. When a cheaper general platform is catching up, move your value into what runs on it before it arrives.
- Continue to rely on and protect Minitel as the national online system while the internet spread elsewhere. Plan the exit from a successful platform while it is still successful.
- Build advanced fabs in Arizona, under pressure from the US government When a supplier becomes a matter of national security, the location of its factories becomes part of the product.
Other kinds of decision
- Opening or closing
- Business model and pricing
- Make, buy or partner
- Acquisitions and sales
- Technology bets
- Product design
- New categories and markets
- Distribution and positioning
- Trust, safety and privacy
- Executing large change
- Organisation and governance
- Public rules
Shrikant Kumar. “Focus, exit and investment.” The Telos Decision Record, Telos, version of 2026-11-03. https://shrikantk.com/record/focus-and-resources/