When it comes to business, you either grow or stagnate until your business dies. Use these tips to help your business grow.
By Alex Friedman, for the American Express Open Forum
For many companies, worrying about expansion and diversification can seem like a luxury. After all, one of the biggest struggles for a young company is identifying even a single core offering that will drive the brand and business in the first place, let alone expand beyond its current parameters. A startup is like a controlled experiment. At the start, it’s nothing more than an idea or business plan that you think will be successful. You hope your experiment works, and how you choose to handle your expansion and growth will determine your company’s long-term success or failure.
The Benefits of Expansion
Expansion allows you to add value to your existing offerings. If you expand by focusing on complementing your current business, you can create related upsell opportunities that naturally lead to further demand and growth. You can also address market needs that are a better fit for your offering. Grow and convert consumers by solving a bigger problem with your product. This might require adding features based on what your competitors are offering to bring value and to differentiate yourself in the market. As you expand, remember to:
1. Make sure new features and products complement or enhance your current portfolio. While there may be a drive to churn out something (anything) new, resist the urge. This can lead to releasing offerings that have no place in your business.
2. Evaluate “cool” features. While nice to have, they can drain resources if they aren’t essential. Don’t waste the time or money if they won’t increase your bottom line.
3. Limit complications. Over-innovation can drive consumers away. Innovation that begins complicating something that originally thrived on simplicity will lose its value.
Don’t Let Expansion Control You
To achieve balance during growth and increase your chances of success, focus on controlling expansion at a manageable rate. Identify the core value of your offering and ensure that new ideas connect with this to avoid overextending your business. The key to manageable expansion is simplicity. You can develop a simple expansion or complementary offering at lower costs while still meeting the needs of the market. As you grow, the key factor will be you. Sleepless nights without breaks and constant stress do not support long-term growth or health. You need to know when to relinquish some control to maintain your sanity and success.
Tips for World Domination
Often, a company will wait until a product is perfect before it launches. If you wait until it’s “perfect,” you’ve launched too late. It’s often better to finalize a product after receiving early market feedback. This allows you to incorporate new ideas and create a product you may not have originally envisioned in the vacuum of your lab. Never forget to stay within your limits. Make sure you have the means to execute. While reaching for the stars is a great goal, you’ll end up stranded in space if you don’t have enough fuel to get there. Lastly, the most important thing you can do is to surround yourself with the right people. People you trust to complete key tasks can free more time for you to focus on the big picture: managing your company’s growth.
It Can’t Be Done, Can It?
Nest began as a simple, intuitive way for people to control their home heating and cooling systems. Its core offering was a change from old, outdated legacy systems to fun, innovative and connected platforms. Nest’s expansion model increased its product offerings into different home segments while maintaining its core interface simplicity. Success followed quickly, with growing segments in carbon monoxide monitors and smoke detectors. As a result of its success, Google recently acquired Nest for over $3 billion. Launching 10 new products to diversify and expand may not be the answer for your business. Every business has different goals and paths to success. Keep in mind something a venture-funding company recently relayed in one of our meetings: “We’ve had months without failure, and it’s the scariest time in our corporate life.” If you’re not failing, you’re not trying enough new things to grow your business. And if you’re not growing, you’re stagnating, and eventually your business will fail.
Ruckus President Alex Friedman contributed this article for the American Express Open Forum. The original article can be found here.
