When the desire to diversify finally hits, the temptation to do something dramatic is natural. But business owners should reign in their enthusiasm about expansion, says John W. Altman, who has founded six businesses over the past 38 years. Now a multimillionaire, Altman is also the director of the Thomas C. Page Center for Entrepreneurship at Miami University in Oxford, Ohio.
"They begin to think they're omnipotent," Altman says of entrepreneurs after their first big hit. "As a result, they often make ill-advised investments in new areas and lose what they made in the first [venture]."
The bottom line, Altman insists: "Stick to what you know. That's hard for successful entrepreneurs to do."
That's what Harshaw did. In 1992, a shareholder sent him a newspaper clipping about Luminator, a Dallas company that makes electromagnetic route signs for the front of buses. To comply with the Americans With Disabilities Act of 1990, Luminator was trying to create a program that would interface with its signs to verbally provide route information to visually impaired passengers.
"I saw right away how our technology could work [for Luminator]," recalls Harshaw, who wrote a letter to the company's president. Today, Heads Up manufactures Luminator's integrated voice enunciator system for buses, which gives instructions in a variety of languages.
But the bus industry isn't an exploding market, either. This time, that was fine with Harshaw, who knew he could find another use for his software. Having conquered the aviation and mass transit industries, it was obvious what was next: laser tag.
Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.