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May 18, 2017

The Startup Dilemma between Focus and Diversification

It is characteristics of almost all startup that they are passionate about numerous ideas they believe are hits when they have the resources most especially capital to lunch it out. Meanwhile in the process of starting up, most especially for those who are aspiring entrepreneur, most of them are more than confused if they should go with this idea or that. When they eventually start something on one of their beautiful ideas but things are not working as planned, the consideration for the next idea started ringing in their brain coupled with the challenge to let go of the one at hand creating double dilemma.

I recently shared on my facebook timeline that, there are only two worlds; the creative and the competitive world, one is for the rich, and the other for the poor, and I asked; are you creating or competing? This is Dr. Wallace Wattle believe in his best seller “The science of Getting Rich”. He believes to become rich, you don’t have to compete with anyone, just be grateful for the one you possess, what and where you are, while you focus on what to become. This same scenario is applicable to startup entrepreneur. An average startup is competitive in nature, which is the reason you see many of them in haste of starting their business once they generate one idea or another without due diligent and the same occur trying to grow from zero to millions and billions.

You don’t have to become competitive from day one when your idea is genuine and solid. Let me ask you, what is the brain behind starting a business? Is it to solve problem, make money or what? Even if it is to make money, in as much you know you have to serve as many people as possible with your service and or products then, that reason is good enough.

In today’s global market, one of the major motives behind starting a business is your ability to solve one problem or another; providing solution that people will have no choice than to subscribe to.

Warren Buffet refers to diversification as a protection against ignorance. When you are sure and are ready to adjust your planned to achieve success in the business at hand, you will not consider going into adding something new most especially with little or unavailable resources.

Some of other reasons I am sure is behind a startup considering diversification over focus are;

·        Uncertainty: Of course, no one is expecting you have 100% information before starting a business. Even if you do, today’s global business trend changes are fast that you have to inculcate adjusting your plan. But not to the extent of going into another business that have little or nothing to compliment the present one. That is a sign of insecurity in your idea.
·        Instant gratification syndrome: If you are considering going into business for real, you should be ready from onset to delay benefit. If that is against your lifestyle and principle, then go get a job.
·        Looking at the Greener Pasture at the Other Fence: Every business and every industry has its own characteristics. As a startup, you don’t have to start comparing yourself with others startup in term of growth speed. While that might be necessary to challenge yourself, you have to know they work to solve their challenges to get there. In addition you might not have the opportunity they have in term of initial resources. If you work hard enough, you might be ahead of them in no time. Remember, create don’t compete.
·        Belittling Yourself: If no one is against you, why are you against yourself? Because it’s not working now or because it’s not growing fast as you envision doesn’t warrant losing your focus.
·        Listening to Losers: They will say all sort of things to discourage you. Their proof is a mere theory on book. You are in the real game, let the losers be, get yourself together and let the game shine on.

But should the need arise to diversify, considering the following could change the game to become a winning one

·        Are You Still on Track: Being focus does not mean you should be strictly narrow, if the need for diversification is still on core business or related one to compliment the operation at hand like capturing more market share and serving more customers, then go ahead.
·        The Resources: Do you have the required resources, if not can you get it without hurting the core business. Don’t be too engrossed in the new game at the expense of the existing one.
·        Timing: Give it lots of consideration and share the plan with your team but most especially schedule the right time to lunch out.

Remember, a bird at hand worth more than thousands in the bush.

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