The Peanut Butter Problem

The discipline to stay boring

“Walk right side, safe. Walk left side, safe. Walk middle, sooner or later, squish, just like grape.” — Mr. Miyagi, The Karate Kid (1984)

In 2006, a Yahoo executive named Brad Garlinghouse wrote an internal memo that should have saved the company. He described the core problem in a single image: peanut butter spread thin across too much bread. Yahoo, he argued, had become “a thin layer of investment spread across everything we do and thus we focus on nothing in particular.” The metaphor stuck because it was devastating. And accurate.

Yahoo was once worth over $100 billion. By 2016, Verizon bought what remained for $4.8 billion. That wasn’t decline. It was evaporation. Yahoo didn’t lose because it lacked talent, capital, or ambition. It lost because it tried to do too much at once. Search, email, news, photos, social, video, advertising. They touched everything and owned nothing. Google took search. Facebook took social. YouTube took video. Yahoo took meetings.

When you stand for everything, you become nothing.

I think about Garlinghouse’s memo constantly when I talk to founders. The instinct to expand is natural and deeply seductive. You build something that works and immediately your mind races to what else it could be. A feature becomes a product. A product becomes a platform. Clarity gives way to sprawl.

New ideas don’t compound. Execution does.

The best founders aren’t short on imagination. They’ve just learned that focus, not novelty, is what creates leverage.

At Sugar Capital, we’ve watched this pattern play out again and again. The founders who win aren’t chasing adjacent markets. They’re obsessive about one thing and they stay there until they’ve earned the right to expand.

Grüns launched with one product: a greens gummy. They waited until it crossed $100 million in annual run rate and was profitable before launching anything else. Now they have four products and it’s a $500M+ brand. The expansion was earned, not rushed.

Ultra makes a pouch. One format. One promise. $50M+ in run rate in under nine months. That’s execution.

The pattern is always the same. Narrow the aperture. Deepen the execution. Let the market reward depth.

Here’s what nobody tells you about building a company: the exciting part ends quickly. The spark of the idea. The pitch that lands. The first customers. Early traction. That’s the honeymoon. What follows is the long middle, where progress depends on doing the same things better, over and over, with a discipline that borders on tedium. Improving conversion by two percent. Negotiating with co-packers. Fixing bugs you’ve already fixed. Running the same playbook in a new channel. It’s not glamorous. It doesn’t make for good podcasts. But it’s the only way anything real gets built.

The founders who struggle most can’t sit in this phase. They get restless. They scroll Instagram and see someone else launch something shiny, and suddenly their own product feels stale. Instead of fixing the funnel, they brainstorm new verticals. Instead of deepening the core, they hire for the company they want to be rather than the one they are. This is how peanut butter thinking actually infects an organization. Not through a single grand mistake, but through a thousand small surrenders to distraction.

I’ve been guilty of this myself. At POPSUGAR, there were years when we chased too many things at once. Retail partnerships. Video production. Licensing deals. International expansion. Some of it worked. Much of it diluted our attention from what mattered most: the core relationship with our audience. The moments when we grew fastest were the moments we narrowed focus and poured everything into one or two bets. The rest was motion without momentum.

There’s a quieter trap founders fall into that’s just as destructive: envy. You see a competitor ship a feature. A rival raises a big round. A new brand gets your press. The instinct is to chase. It’s first-grade soccer. Everyone running to the ball, nobody holding their position. What looks like responsiveness is often insecurity in disguise. Envy masquerades as strategy.

The market doesn’t reward imitation and breadth. It rewards originality and depth. Liquid Death built a billion-dollar brand by selling water in a can. That’s it. For years, while competitors raced to launch energy drinks, supplements, and functional beverages, Liquid Death just sold water. They let the brand compound. They let the format become iconic. They resisted every temptation to extend before they’d fully owned the position.

The discipline to stay boring is what made them interesting.

The founders I admire most share a quality that’s hard to name. It isn’t patience alone, though patience is part of it. It’s closer to faith. Faith that the work no one sees is the work that compounds. Faith that depth beats breadth. Faith that mastery in one domain creates options that chasing five domains never will. They can watch others sprint after shiny objects and feel nothing but clarity about their own path.

This is the real meaning of the Peanut Butter Manifesto. It isn’t a strategy document. It’s a character test. Can you resist the seduction of the new? Can you stay with something long enough to become undeniable at it? Can you embrace the boredom that mastery demands?

Garlinghouse ended his memo with a simple plea: focus. Nearly two decades later, Yahoo is a cautionary tale and the advice remains the best anyone can give a founder building something that matters.

Spread thick or don’t spread at all.