A common trap that many entrepreneurs and ambitious business owners fall into is thinking that more is always better — more services, more products, more quantity. Entrepreneurs often burn out trying to be all things to all people, launching new business divisions, new products and pursuing new ideas.
This drive can be the lifeblood of a business, infusing it with the innovation that keeps it ahead of competitors. But it can also be disastrous for a company if the organization spreads itself too thin, burns out top talent and spends time and resources pursuing dead-end new initiatives.
Solari discusses why being an early adopter can give you a business advantage
Some of the most successful entrepreneurs exhibit a level of focus and patience that translates into companies that do fewer things, but do them at a level of excellence that is unmatched.
They don’t achieve that by chasing every idea. Instead, they make the most of the best opportunities that come their way.
Investing icon Warren Buffett said this about his business approach: “I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business.”
The interesting thing about Buffett’s statement is the concept that what you don’t do is often equally as important as what you do. Making fewer decisions and actions, but making them count, can be the patient and focused approach that leads to great business outcomes.
An interesting study in doing one thing really well, and turning it into wildly successful company, is Yeti, a fast-growing cooler company. A decade ago, the idea of pricing a cooler at $350 would have been met with laughter. But Yeti focused obsessively on building the best cooler on the market, and the idea of spending $350 on a cooler quickly went from laughable to nearly mainstream.
Yeti founders and brothers Ryan and Roy Seiders stayed focused on making a dream cooler — a product that would last a lifetime and keep drinks cold for days on end. This product focus led Yeti to grow at nearly 750 percent and expand into a half-billion-dollar company, which is now set to go public at an estimated $5 billion valuation.
How did Yeti do it? Focusing on quality, being patient as the market latched onto the unconventional idea of paying hundreds of dollars for a world-class cooler, and then riding that momentum into a variety of other high-quality products. While other companies were selling coolers for a tenth of the price, building brands associated with cheap, disposable items, Yeti raised the bar and built products that consumers were proud to own.
On the other side of the equation, renowned toy company LEGO, in a much-studied business case study, launched into a period of rapid innovation in the 1990s and early 2000s. The company decided it had to change with the times, and move beyond the traditional construction-oriented toys. The company started building action figures, and even complex toys tied to LEGO-financed television shows that flopped dramatically, straying away from its core business and competency. After several disastrous revenue years and multiple dramatic failures, LEGO decided to return to what it did best, and what its consumers actually wanted — high-quality, construction-style toy sets.
Knowing who you are as a company, and innovating in a focused manner, is a key to being an industry leader over the long term. And doing something well, and continuing to focus on that central identity of your business, is often more profitable and satisfying than pursuing dozens of new service lines.
John Solari is the managing partner of J.A. Solari & Partners. He has 25 years of accounting experience and is also a member of the American Institute of Certified