Many companies, especially startups, begin as one thing and end up another. The text messaging-based service, Dodgeball, is a great example. In 2005, the company was bought out by Google, soon after it fell apart. Today, its offshoot, Foursquare, has more than 1.3 million users and Yahoo wants to buy it for as much as $125 million. That’s a very lucrative exercise in adaptation.
The same thing is happening in my industry, the online college bookstore marketplace. My company, ValoreBooks purposely stayed away from offering a textbook rental service until just recently, noting that such offerings were deceptive, with a host of hidden fees and returns filled with hassle. That all changed when we recognized that we could enter the market with a much more open and transparent offering with the lowest prices available, and thus create the best rental experience around.
We’ve learned a lot about why it might be a good idea to occasionally change your mind about a product or service and how to go about it. I can distill them down into four basic things that CEOs should do in order to be open to reversing a business decision and take advantage of new opportunities:
Don’t get too attached. People are often married to their own ideas. That’s just human nature. When looking at your current set of offerings it’s important to not just ask questions such as, “Is this idea popular?”; “Does it make money?”; and “Can we sustain it?,” but also “Are we missing the bigger picture?” It seems like common sense, but If the answer is no to one of these statements, it may just be time to consider a change.
Be nimble, Be quick. While no entrepreneur succeeds by going “all in” on a new idea with guns blazing, reality tell us that the same folks need to be prepared for it to fall apart due to changing market dynamics and customer trends. Whether its product strategy or a new business model, stay flexible and have a Plan B, or C, or even G. Having the ability to switch gears leads to a company that can not only survive, but thrive, especially in a tough economy that relies on constant innovation.
Study the competition. We’ve learned a lot from our competitors’ mistakes. If a company is about to reveal something that it might have scrutinized someone else for doing, it must be darn good. That new service or offering must be better than anything anyone has ever seen before. Once the new venture is ready and all the kinks worked out, set up a very strategic and thoughtful launch for the greatest impact.
Be up front. After we made the decision to dive into rentals, I posted a letter on our Web site explaining how launching rentals ourselves means we’ve figured out how to do them right. It’s important to be honest and not ignore the fact that the idea might have once been dismissed by the company. Posting it right there on the company Web site or making an official statement is the easiest way to control the message. Make sure it comes out of your mouth first, not the public’s or the media.
Many people swear they’ll never wear a business suit or get a dog, but things change. Entrepreneurs can take note here–perhaps there’s a business idea that was shelved some time ago that may be ready for its debut. Think about it.
Bobby Brannigan is the founder and CEO of ValoreBooks, a fast-growing online provider of cheap college textbooks. He can be reached at firstname.lastname@example.org.