What Taking My Company Into a Whole New Industry Has Taught Me About Being an Entrepreneur
The buzz in 2005 -- if you were buying it -- was that a company named Odeo was set to be the next big thing in podcasting, aided by its intuitive interface, hosting capabilities and suite of publishing-related services. And that was the word even before Odeo was out of private beta. Then, Apple launched iTunes podcasting, and Odeo found itself to be a ship without a sail.
For many startups, a situation like that one would spell the end. But Odeo instead took its misfortune as an opportunity to pivot and create something entirely different: a messaging service made up of just 140 characters that would eventually become -- drumroll -- Twitter.
That was a good move: According to reporting by CNN Money, the social networking service has seen its stock climb 60 percent this year alone, outperforming even that of its rival, Facebook.
Shifting gears and moving a company into an entirely different industry is no small feat. I can attest to that, personally. My company, Cemtrex, was founded in 2003 as an industrial technology concern, with a focus on environmental services and air filtration. That was, until we acquired ROB Group, now known as ROB Cemtrex, in 2013.
ROB came to us with decades of experience in electronics design, development and production. So, it seemed only natural to move into that industry to develop high-end electronics for the automotive, consumer and medical electronics industries, among others.
With our established expertise in engineering technology, we opened our Advanced Technology subsidiary in 2018, which focuses on innovative technologies that will drive the future. We have since been developing internet of internet of things devices, such as the Cemtrex SmartDesk, and virtual reality and augmented reality applications for consumers and businesses.
Batteries not included
If you too are thinking about moving your company into a new industry, understand that it will not be easy. But the following strategies, which proved beneficial to us, could be a good place to start:
1. Iterate, rinse, repeat.
Our move to a new industry was not a reaction to some disruption in the marketplace; it was a desire to build a business that creates high-quality products and has a pulse on where technology trends are headed.
Iterating to the right business model is part of the process. Iteration allows you to quickly learn whether people will pay for your idea, no matter how harebrained it might be. Shopify, for example, was created because its founders wanted a shopping cart solution for their online snowboarding-equipment store. They couldn't find one, so they built their own -- and then realized that their solution could help other companies, too.
2. Encourage exploration.
We wanted to provide more value to the value chain, which meant differentiating ourselves -- something that is difficult to do when you don't own your products or intellectual property and when your growth is reliant on clients’ growth. So, expanding vertically into the end-user space was the best way to achieve the growth we wanted and provide more value to the value chain.
If you spend too much time exploiting an industry, chances are you're not exploring it. And such a narrow focus can cause you to lose sight of market trends and leave you to fall behind. Look at your business in a broader sense, and determine what the future looks like.
For example, Blockbuster used to generate roughly 16 percent of its revenue from late fees, according to reporting by NBC News. If it wanted to keep up with Netflix, it would have had to have transitioned to a streaming business model -- and, in turn, cannibalize a good chunk of its own revenue. This is a challenging decision for any business leader, but it is a necessary one for making tough calls.
3. Do drink the Kool-Aid.
I am always amazed by how many entrepreneurs build things they don't use themselves. If you don't want it, why would you expect anyone else to? You need to take ownership of your idea, understand its value and follow it through to the very end. Many times, interesting ideas don't translate into good products or business models, so don't be afraid to shake them up.
For example, Casper disrupted the mattress industry, which brings in nearly $15 billion in revenue, according to Statista. Casper did something no other mattress company had done: It offered a single mattress model at an affordable price and delivered it to consumers' doors for free, with a 100-day trial period. Four years later, the company is valued at roughly $750 million, according to the New York Times.
4. Focus on your top five problems.
It's easy to get distracted by minutiae. This is often referred to as “pinball syndrome”: You're getting caught up in small tasks and feel that accomplishing a lot when you actually haven't really done anything significant.
Rather than focus on the small tasks, identify your top five problems in order of size, and act upon them. This is not to say that other urgent matters won't come up. Just don't confuse urgency with importance. The most critical issues will almost always have long-term ramifications and somehow relate to your business objectives.
Related: 13 Ways to Develop Laser-Like Focus
5. Seek insights outside of your core business.
Some of the best ideas will come from people in completely different industries, and their insights can help you think outside the box and develop revolutionary solutions. After all, creativity is an essential component to becoming a successful entrepreneur. In his famous Stanford commencement speech, for instance, Steve Jobs explained that taking a calligraphy class taught him how powerful design can be, and that in turn gave him the inspiration for Apple products' acclaimed user experience.
Sometimes an industry is turned on its head and you have no other choice but to move your entire organization to a new space. Other times, you see an opportunity or an untapped market that's just calling for your expertise. Whatever the reason for the move, know that there are ways to pull up stakes and make a home someplace completely foreign to you -- it just takes careful planning.