You know, everyone in business has these two pieces of conflicting advice being hurled at them every day:
1. Stick to your core.
2. Read the trends.
It’s tough. Just ask Starbucks. This is arguably one of the most successful brands in the world, but they have had some huge failures.
1. The "lifestyle" portal. $35 million in, $.40 out. I’ll be honest, I was sort of relieved to know that even the geniuses at Starbucks got caught up in the bubble.
2. Starbucks cafes. This was probably a great idea in the boardroom, and it’s hard to say why it failed. I mean there are a million reasons, but they get slammed with "out of their core" a lot. But I know why they did it. It seemed to make sense! I often find myself wanting a sandwich at Starbucks, and all they have is sweets. I’ll bet lots of people told them this was a great idea.
3. CD burning in-store. This one is well on its way to being a loser. The idea that people are going to go to all of the effort to create and burn Cds at Starbucks is silly. The people that *might* do that are the people with laptops. And they aren’t burning Cds.
So, what’s a company to do? Stop experimenting? Stick to your core?
Here’s the thing: A lot of companies that stuck to their core missed the boat. Railroads missed the airline boat. Carriage makers missed the car boat. Mainframe makers missed the PC boat. Most likely they were nose-to-the-grindstone on their "core." Following the sage advice of many, many advisors.
Well, I’m no genius, and I don’t have any great proof that this works, but here is how I think you do it:
Do both. Yes! Do both.
"Mike’s a flip-flopper! Mike’s a flip-flopper!" I know, it sounds awfully slippery. But I think you should do it like this:
If you are in a particular industry, you have a distinct advantage over people who are not in your industry, provided you can find the innovation forces in your company. The only reason upstarts succeed is that the industry players are missing something. But if the industry folks could see what the upstarts see, there would be no upstarts. So, use your company as an experiment. Try something out of the ordinary. Something that leverages your knowledge and resources. Then, when it looks like it’s breathing – cut it loose. Create a second brand. Because the core thing is certainly true when it comes to brand extension. One brand – one thing. That rule has very few exceptions.
Lessons? This time I actually put my money where my mouth is. My company, Ripple, has given birth to two others: 3rd Wave Hotspot and SaveTheMail. In both cases we took what we knew (Information Technology) and created products. We tried them out with our closest clients (the ones that knew us so well that our brand would not be diluted). When we saw that they might have legs, we created new brands and detached them from Ripple. Thus, Ripple can focus on it’s core while still experimenting. The best part is that you already have most of the resources in place. It’s just a much easier proposition than starting from scratch. Flip-flopping?…maybe 🙂 Success? Time will tell. But I still believe in the process.
Me? I think Starbucks has the right idea. Their failures are so glaring because they come against the backdrop of so many successes. But business isn’t really about perfection. It’s about being right more times that you are wrong.
This entry was inspired by my friend John’s. He *is* a genius.