Business Diversification: Diversify your business or Die!
I was trying to think of some catchy phrase to talk about the importance of diversification and the importance of keeping a pulse on whatever industry you are in. The Internet is no exception.
Recently, a friend informed me that we was closing his brick and mortar business that had been part of a local community for roughly 20 years. I’ve got similar stories from other friends with brick and mortar or service related businesses.
Here’s a fact: Business is constantly evolving. You and I must evolve with business cycles.
One of the major technologies that has changed the way business is conducted is the Internet, but I’m amazed at some of my old-school friends and business associates that fail to take advantage of or evolve with the way their particular industry is changing.
Everyone knows that having a website for your business today is important, just as having a business card was a no-brainer.
For nearly everyone of my personal friends or business associates that has run into roadblocks with their brick and mortar or service business, some of those issues could have been avoided or minimized if they had diversified via their website. Selling products or services, up-sells, cross-marketing, etc.
How has your business been affected by the economy or technology changes? Did you diversify your business or did you miss the boat?
Share your story with our visitors below.
I’ll keep this story brief. A lesson I learned awhile back is not to fear competition, but fear execution. In 1999 I worked for a spin-off company from Cabletron Systems called Velocity Solutions. I was fortunate enough to work with some of the brightest engineers I’d ever worked with. I think it was a group of 25 of the best and brightest in computer networking.
We didn’t get promised funding, lost direction, and the in fighting started. By the time we figured out what business we were in, engineers started leaving and I got an offer for my next start up company here in Texas, IPOperations. We went through several iterations “etalk”, “cosurfer”, and finally after some litigation settled on IPOperations.
IPOperations was a victim to the Dot-Com crashes of 2000. We were pre-IPO; lost our funding, market focus, etc. With IPOperations, we were obsessed with watching what our competition had for pricing and never really got any momentum. Needless to say, we failed in the click to talk space, but found some success that came too late in setting up international VoIP traffic.
The lesson I walked away with from both of these start-up companies was competition is not nearly as important as proper execution of a good business plan. I’d gladly take any market with a lot of competition and an understanding of where I needed to execute better than my top competitors.
Consider the World Series in baseball, the Super Bowl, or the NBA championship; it all comes down to the two best teams. Which team ends up winning? Typically it’s the team that understood its competition and just executed on their game plan better than the other team.
So if you are displaced in this upside down economy and considering a business start-up or a new venture, look at where you can execute better than your potential competitors.
Don’t get so caught up in the details that you can’t get moving.