My friend Art Petty writes Too Many Projects Chasing Too Few Resources:

Learning how to say "No" and how to say "No More" are two of the most difficult lessons for a maturing organization.

In particular, Art comments:

The firm that failed had developed such an inbred culture of selling development commitments to make sales that all sense of strategy was lost in the never-ending chase to fulfill.

It doesn't take long before selling development commitments turns into 'selling more than we can deliver'. And 'selling what we cannot deliver' isn't far behind. Like Icarus, these "anything for a sale" companies seem to fly high--but only for a while.

One point I often make is this: deals outside of your market segment are always a bad idea. But invariably someone brings up contract revenue. For enough revenue, many companies will do anything.

The issue isn't contract revenue; the issue is market revenue. Not "can you sell it?" but "can you sell it again and again?" With limited resources--and isn't that the case for all of us--you must focus your efforts on delivering complete products in markets where you can be the dominate vendor.