How To Survive: Diversify Your Offerings, Move From “Want” To “Need”, Pivot To Change

My father, who rose from a hardscrabble life to become an extremely successful entrepreneur, used to tell me:

“Always have at least three businesses because there will never be a time when one of them isn’t doing badly.”

Was he right on that!  Particularly in the midst of a recession.

But even if you don’t have three entirely separate businesses, it is still possible to adjust your product mix so you have three or more entirely different offerings targeting different needs, possibly even from the same consumer. Look carefully at your business and learn to pivot.  I have.

I was reading recently that for a number of years Target, even though much smaller, had been beating the brains out of Walmart, in terms of growth.  Retail experts attributed this to it’s trendier clothes and name designers.  Then, lo and behold, the recession hit and the trend flipped.  Walmart is now beating the brains out of Target and the gurus tell us it all has to do with groceries.  Yep, mundane old cereal and peanut butter.

Because now vendors need to be selling more of what people need not what they want. As this article put it, why buy a new shirt when you can just reach in the closet and get one.  On the other hand you need to eat.  So you need to buy groceries and Walmart has more of them, although Target is scrambling to catch up.

Which brings up to the Web.  And to other businesses as well.  I was also reading about an entrepreneur who was burning through cash and man hours and scrimping to develop a new, hopefully game changing, software product.  When the recession hit, he put that on hold to offer a web design and development service.  Cash now for something businesses need to have not want to have.

The lesson here is that there is, no doubt, some way you can think through your offerings and, for the moment, move away from the big ideas and toward the practical, the everyday needs, the things you can execute efficiently in a shorter time frame for a customer.

Seth Godin wrote about this on on March 13, 2009

Pivots for change

“When industry norms start to die, people panic. It’s difficult to change when you think that you must change everything in order to succeed. Changing everything is too difficult.

Consider for a minute the pivot points available to you:

  • Keep the machines in your factory, but change what they make.
  • Keep your customers, but change what you sell to them.
  • Keep your providers, but change the profit structure.
  • Keep your industry but change where the money comes from.
  • Keep your staff, but change what you do.
  • Keep your mission, but change your scale.
  • Keep your products, but change the way you market them.
  • Keep your customers, but change how much you sell each one.
  • Keep your technology, but use it to do something else.
  • Keep your reputation, but apply it to a different industry or problem.

Simple examples:

  • Keep the musicians, but change how you make money (sell concerts, not CDs).
  • Keep making guitars, but make bespoke expensive ones, not the mass market ones that overseas competition has made obsolete.
  • Keep the punch press and the lathe, but make large scale art installations, not car parts.
  • Keep your wealthy travel clients, but sell them personal services instead of trips to Europe.
  • Keep the factory that makes missiles, but figure out how to make high-efficiency turbines instead.”

There you have it.  If you like this post, Tweet me.  Thanks.

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