Don't Make Yourself Comfortable Remember your pals in high school--the ones who wrote "Don't ever change!" in your yearbook? For your business' sake, forget them.

When Peter Carlisle first started representing athletes in hissports law practice back in 1995, things were fairlystraightforward. With a focus on sports like baseball and soccer,the Portland, Maine, entrepreneur and attorney just didn't givemuch thought to anything nontraditional. But when droves of Gen Ykids around the country started trading in their bats and cleatsfor snowboards and skateboards, Carlisle couldn't ignore theopportunity: "I figured that within a relatively short periodof time, I could establish a pretty secure position within this newand burgeoning industry."

Indeed, a little research on Carlisle's part revealed thatGen Y's spending power and influence on music and sports-andthe potential for growth within those sectors-was far greater thanhe could have imagined. And with the door wide open for thoseentrepreneurs representing extreme athletes, Carlisle took thelead: In 1997 (a year after snowboarding became an official Olympicsport), he abandoned his law practice in favor of sports managementand began recruiting extreme athletes, and Carlisle SportsManagement emerged.

Carlisle's story might be unique, but his philosophy oughtnot be. In other words, the old "If it ain't broke, whyfix it?" maxim just doesn't fly when it comes to owning abusiness. If you hope to grow beyond breaking even-or even beyondbeing somewhat profitable-don't get too content with yourcurrent business model. Smart entrepreneurs constantly evaluatetheir company's direction, looking for new ways to generaterevenue and capitalize on emerging markets before the competitionknows what hit it.

"The best executives are always making shifts,"explains Leslie Kossoff, founder and principal of Silicon Valley,California-based Kossoff Management Consulting. "As the businessgrows, entrepreneurs feel so locked in, their focus becomes morelinear and fear-based, especially in these economic times. Thechallenge for established executives is to re-expand-to open theirminds the way they did when they first started thecompany."

The bottom line is to remain flexible and willing to acceptchange. "Flexibility should be the competitive advantage ofsmall businesses," says Dr. James Reeve, Deloitte and Toucheprofessor of business at the University of Tennessee, Knoxville."Smaller companies need to be continually involved inenvironmental scanning, competitive scanning, market scanning andmeeting on a periodic basis to review their strategy."

Look at it this way: If Carlisle hadn't anticipated thepopularity of extreme sports four years ago, he never would haveattained the dominant position in the industry he now holds."In a very short period of time, these sports have grown[hugely popular]," says Carlisle. "Five years ago, youwouldn't imagine a mainstream corporate marketer sponsoring asnowboarder or skateboarder."

And though Carlisle still had a lot to learn after making hischange-for one thing, he'd never picked up a snowboard in hislife-he found ways to adjust to his new market. "The firstyear or two was difficult," says Carlisle, who now expectssales of nearly $1 million for 2001, 15 times more than his 1997sales. "I would go to events or speak on panels, and theywould view me as someone from the outside-a professional coming in.We had to hire people who knew these sports in order to developcredibility."

"Yes, We Do That . . . and That . . . and That, Too . . ."

In some cases, shifting your company's focus is more aboutnarrowing down your objectives than changing them, especially ifyou've taken on too many responsibilities. Thirty-year-oldChrista Grim founded Washington, DC-based WatermarkCommunications in 1999 as a "communications strategy andmarketing, public relations, event planning and productionfirm." "People said, 'What the hell is that?'" jokes Grim. "I had a hard time establishing myselfbecause people didn't understand what I did. I wasn't evensure what I did."

Not only did Grim's broad line of work make for a disjointedmarketing strategy, but it also kept her from specializing inanything. So last year, Grim decided to put all her energy intovideo production, which meant she had to turn away a lot of PR workthat didn't fit with her new vision. "It's hardturning down business that isn't germane to my new focus,"says Grim, who projects sales of $225,000 for 2001. "But youneed to choose a skill set that separates you from the competition.Once I jettisoned all these extra things that I didn't like todo-PR, brochures, strategy marketing-it was so mucheasier to focus on video production. Period."

Grim's sales haven't notably shot up since implementingher new strategy, but for her it's more about focusing on whatshe does best-which, as it turns out, is in the best interestof not only her customers, but her company, which now has a moreidentifiable brand, according to Grim. "I enjoy videoproduction because it's what I do best," she says."The only way you can be happy is if you're doing what youlove."

This is all well and good for a company whose principals andemployees agree that change is a good thing. But what if you'remet with resistance? When two of Snailgram.com's co-founders wanted to shiftthe focus of their Oakland, California, online greeting cardcompany from B2C to B2B, the other two co-founders weren'texactly thrilled, even though other companies were alreadyexpressing interest in Snailgram's product. "The biggestobstacle was changing the minds of some of the originalfounders," says co-founder and COO Ben Pricer, 23."It's hard to admit you're wrong when you've putso much time and money into something."

Launched in 1999, Snailgram found itself in the same position asmost other dotcoms: They had a good idea and a flashy Web site, butfew paying customers, says Himanshu Singh, Snailgram's22-year-old CEO and co-founder. Late in the company's firstyear, Singh began exploring the viability of a B2B sales model.Finding it promising, he and Pricer redirected spending fromSnailgram's Web site into marketing their new vision and hireda veteran marketing executive to lead a new sales team. "Wewanted to bring on some experience and knowledge," saysPricer. "[The marketing director] had used a lot ofdirect-mail campaigns in the past and brought a lot of insight toour business."

Singh and Pricer led a group of nine employees who supported thechange, and in February 2000, the company officially shifted to aB2B strategy. Still, it wasn't until Snailgram signed a fewclients that everyone agreed B2B was a better way to go. Now no onecan argue with the results: Since making the shift, Snailgram hasexperienced 25 percent quarterly growth and now projects sales ofapproximately $500,000 for 2001. Pricer and Singh have also spunthemselves off into a separate B2B company, Snailgram SolutionsInc., and allowed a larger corporate player to acquire the onlinegreeting card portion of the business.

"Sometimes you have to distance yourself from your originalmission," says Singh. "Once you have a better idea, youhave to detach yourself from your previous goals and see it as ifyou're starting a new company. Use the experience you gained,but go 100 percent into your new mission."

"It requires a long-term vision," concludes businessprofessor Reeve. "The trick is to realize that your originalvision might be a failed vision, or that a better version of itexists."