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One of the great challenges for the business owner is having too many good ideas that just end up diluting their core business. Hayden Shearman explores why embracing the joy of missing out, JOMO, is one of the hardest and most important business strategy skills to master.
Learning to say “no” ultimately comes down to FOMO—the fear of missing out. And what follows is an example of how FOMO can potentially lead a business into troubled times …
Susan owns a company making wooden boutique toys for toddlers. Parents love the natural materials, the safe and simple construction, and how they encourage young minds to explore their world. But last year Susan was approached by a plastics manufacturer with a fantastic deal to make discounted plastic versions of their products, promising to give her tremendous profit margins. And, at the same time, she was talking to a developer friend about a new app to feature games inspired from their toys and interactive education tools for under 5s—parents had loved her prototypes.
Her original business was going strong and, on the surface, these new ideas seemed like great new revenue streams that built on the existing strengths of the business. But two things happened …
First, the new plastic toys sucked up exorbitant lumps of time from her product development team as they perfected prototypes. Worse still, once the products hit the market, current loyal customers were confused and, after an initial increase in sales, both her plastic and her wooden toy lines began to suffer as her brand lost favour with her core niche toy retailers.
Second, the app launched as a big hit and looked to recover the losses suffered from the venture into plastic toys. But the app was riddled with bugs that were only accentuated at the all-too-frequent operating systems updates. Plus, her developer friend left town for a high-paying job. So, now she had to out-source the re-development and constant maintenance of the app to a firm that specialises in app design—but at a much higher price ticket. The app continued to breakeven on paper due to its high demand, but Susan was constantly stressed with it’s ongoing maintenance. This stress started to show in the limited innovation and direction she was giving to the wooden toy business.
Susan had expanded her product offering, increased her staff numbers, and grown her revenue, yet, despite it all, she now felt that she was at the helm of a less effective business. Her accountant agreed.
Throughout this journey Susan was driven by a classic case of FOMO. She had thought that more good ideas meant better business. In truth, most businesses succeed because they’ve concentrated their resources (their money, energies and time) on one GREAT idea.
Peter Drucker said, “Whenever we find a business that is outstandingly successful, we will find that it has thought through the concentration alternatives and has made a concentration decision.”
And there are countless examples out there: Google focusing on search for so long before venturing into video (with YouTube, which it purchased eight years after launching) and display advertising (seven years after launching); Ferrari with flippin’ amazing, expensive cars; and The Warehouse with the best collection of bang-for-your-buck products in town.
Instagram’s Kevin Systrom says, ” Our first value … is keep it simple. When we started Instagram we went from solving three or four things to solving one really well and we saw it pay off in spades.”
Even the big players don’t stray too far from their core business. And, if they do, they double down on making that core business exceptional. Think about Instagram adding video. It did so to reflect the changing technology in phones and consumer’s access to high speed data/wifi, but the company purposefully kept the videos short in order not to drift too far from the way people were using the app at the time.
It’s not to say that you ignore all the new ideas as they come along and just keep your head down on the tried and true; but that you evaluate each new opportunity warily, understanding that every new extension to your brand comes with an opportunity cost to your core business.
There’s a great saying that many entrepreneurs use as a litmus test for these decisions: “If it’s not a ‘hell yes’, then it’s a ‘hell no’!”
You’ve got this far with your business because of an initial good (or even great) idea. That idea deserves your protecting it by a willingness to say “no” to other good ideas that could divert your attention away from your core business.
So, when you’re faced with a new business opportunity or extension, give it the “hell yes or no” test. If it fails the test, don’t look at it with FOMO, but reframe that mindset to JOMO—the joy of missing out—your core business will thank you.
Happy missing out everyone.
Hayden Shearman is the Content Marketing Specialist in Strategy Collective’s Brand division. Want a hand evaluating your next business opportunity? Flick us a message and let’s chat. Coffee’s on us!
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