Yesterday we did a Growth Strategy Session with an entrepreneur who has a very successful business in the fashion industry. She’s spent the last 12 years building up a brand, reputation, and enviable client base. But now she’s bored! She’s mastered what she does and is looking for a new challenge. The problem – she’s identified 4 different opportunities for growth and can’t decide which one to pursue (she’s smart and experienced enough to know that she can’t take on all 4). We see this problem with a lot of early-stage companies and entrepreneurs: too many opportunities and no focus, which results in resources being spread too thin and no success in any area.
Here’s what we did to help get clarity on which opportunity to say YES! to, and which to say NO to.
a) Define goals. For the fashion industry CEO, it was the classic entrepreneur goals: autonomy, impact, challenge, flexibility, decent financial income, and the ability to build an asset that is one day saleable.
Whatever your goals, everything you pursue has to start here.
So lay out your goals and constantly refer back to them when evaluating opportunities.
b) Define each of the opportunities.
- What is the business concept?
- Who is the target market?
- Why do they need it / why will they buy it / what’s the value to them?
- What will it take (time, money, people) to deliver the concept
- What are the economics of the concept
- Revenues minus Costs equals Profits
You may not have all the answers to economics question – that’s ok, do a thumbnail, highlight what numbers you’re least certain about, and do follow up research if you need to validate your numbers
c) Evaluate the opportunities relative to your goals.
Last night, of the CEO’s four opportunities, it quickly became clear that 2 would be a huge amount of work, for meager returns. It was easy to toss these out. A third offered reasonable potential returns, but the risk of it not working out was high. The fourth looks very exciting. It is clearly differentiated, the market opportunity is strong, the company is in a unique position to be able to deliver it.
This was a great process for the CEO. She had come into the session with a ‘gut feel’ that the opportunity we eventually identified as best was the best, but she didn’t have any way to articulate that or quantify it. And that’s a challenge in the business world: intuition is valuable, but even more so when you’ve gone through a process to validate it.
So the next step is to figure out the steps to pursue that opportunity. This is where the CEO wanted to be all along, but before we went through this process, she didn’t have the ability to commit to this one opportunity and throw her all into it. Now she does!
If your organization faces numerous opportunities, I encourage you to go through this kind of process to winnow the ones that aren’t worth your while, and to help you give it your all to the ones that do.