Staying Power

Diversify, Diversify

Well, maybe it wasn't so obvious. "Keep an open mind," Harshaw advises one-hit wonders in search of a second hit. In 1993, he was talking to a neighbor who needed someone to manufacture equipment for his laser tag company. Harshaw realized a lot of the technology he used in his checklist and passenger briefing systems was applicable to laser tag. And it didn't hurt that Harshaw had once been a defense laser systems specialist.

Harshaw's talk with his neighbor led to a formal meeting with Universal Studios. Although the neighbor's business folded, Harshaw landed a contract with Universal that transformed his slow-crawl company into a fast-moving firm. Heads Up's LaserTrek laser tag systems are now used in theme parks around the world. The company's 1997 sales hit $4 million, and its 30 employees currently split their time between the transportation and entertainment industries.

The Frey brothers took a different approach to expansion. Instead of creating a new service, they found new markets for their existing one. That's the strategy suggested by the Women's Business Training Center's Norington, who believes going in too many directions takes your attention away from improving your product.

The Freys found their new markets a few years ago, after The Washington Times did a story about their care package business. A law firm called, asking if the brothers could make packages for law school students it was hoping to recruit.

Today, Granny's Goodies has five full-time employees, about 25 part-time workers, and expects $1.5 million in sales this year. In addition to college students, the partners provide summer campers and soldiers abroad with customized packages. Especially lucrative are corporations: Granny's Goodies specializes in creating packages for recruiting, law, accounting, real estate and mortgage brokerage firms. If a law clerk is preparing to take the bar exam, for example, his or her firm might send a care package.

"A care package is a classic idea," says Seth. "We just need to educate the public as to [the many different ways to use it]."

Educating potential customers about new uses for your product is key, says Edwards, who explains the three-pronged approach: "Change the age; change when it's used; change where it's used."

How can you find new uses for your product? Edwards recommends asking your customers--the ones who know you well--for suggestions.

Harshaw's company has often sought advice from those who use its products, but because his industry is so technical, customers didn't always understand the blueprints for product ideas. So Heads Up started using computer technology to change its blueprints into 3-D-like photographs that allowed clients to offer suggestions. Heads Up had developed a new skill--computer animation--that came in handy when the company created graphics for a laser tag exhibit at Sea World of Texas.

"One thing I live by, and it's probably my strongest rule, is to grow the company by adding capabilities, as opposed to adding specific products," says Harshaw. "We've found that every time we have the capability to do something, the opportunities make themselves known, and you can respond. But if you don't have the capability, well, you can't do it anyway."

And woe to those companies that try to do it anyway. Says Altman: "The single [biggest] flaw entrepreneurs have is that once you've built your company and have been successful, you think you have the golden touch. But guess what? The odds [aren't any better] the second time around."

Still, if you don't attempt to brave those odds again, you risk remaining a one-hit wonder; somebody else's product or service might make yours obsolete. "Somebody can notice you and copy or emulate you," says Edwards. "That's part of the risk of success."

Contact Sources

Granny's Goodies (800) 888-1636,

Heads Up Technologies Inc., 2033 Chennault, #100, Carrollton, TX 75006,

Thomas C. Page Center for Entrepreneurship (513) 529-2491 fax: (513) 529-4164

Women's Business Training Center, (619) 239-9282, fax: (619) 239-1158

« Previous 1 2 3 4 Page 5

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.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the June 1998 print edition of Entrepreneur with the headline: Staying Power.

Loading the player ...

Shark Tank's Daymond John on Lessons From His Worst Mistakes

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories