Bobby Friedman understands that art collectors looking to frame million-dollar pictures don't patronize Chestnut Hill Framing Inc. because he possesses special technology, a unique location or the lowest prices in town. "The reason they come to my shop is because of me," says the Chestnut Hill, Massachusetts, entrepreneur.
Twenty of Friedman's 42 years have been spent designing and crafting frames for discerning clients who pay as much as $20,000 for them. He knows how to build relationships with customers, understands what they want, and executes their desires in an impeccable fashion. That's why Friedman has resisted temptations to enter higher-volume businesses, such as framing inexpensive posters, or expand his 11-year-old business beyond its single location. "I can't duplicate myself," he says. "And I have a good thing going."
You probably wouldn't call him humble, but Friedman is smart, says Christopher Zook, head of Worldwide Strategy Practice for management consulting firm Bain & Co. and co-author of Profit From the Core (Harvard Business School Press). In the book, Zook and co-author James Allen argue that one of the most beneficial things entrepreneurs can do is find ways to expand that build on their strengths while avoiding those that don't.
Sure, that may sound obvious, but entrepreneurs tend to stray from their core, frequently in disastrous ways. Even Dell Computer Corp., regarded as nearly flawless in refining and executing its direct-sales strategy, suffered when it veered into selling computers through retail stores in the early 1990s, Zook notes.
Why do entrepreneurs make the error? Hubris is one reason, explains Zook. Entrepreneurs think because they've done well in one field, they'll do well in another, without appreciating the special qualities that helped them or their businesses succeed thus far. In cash-strapped small companies, Zook adds, an unexpected opportunity to snare additional revenue in a business far from the company's core often proves irresistible.