In this age of constant market evolution and new technology, there is no such thing as a static business that is self-sustaining. The traditional approach of implementing stable and repeatable processes, so that your business can run itself, no longer works. Just ask former big brand companies, like Blockbuster, Kodak, Lehman Brothers, and Sears, what happened to them.
As a small business advisor, I always recommend that being “self-sustaining” requires taking frequent and aggressive measures to step out ahead of the pack, including yourself before you start feeling the pain of change and new competitors around you. Specific measures that go beyond the traditional linear thinking include the following:
- Develop new products for your existing segment. Rather than enhancing the offering you have, develop and offer new products that capitalize on the customers that you already know well. Competitors tend to focus on price and other variations to existing offerings. Too many businesses only think of new products when in crisis mode.
For example, Facebook added WhatsApp as a cross-platform messaging and Voice over IP (VoIP) service to enhance the self-sustaining growth of their social media platform before any downturn. WhatsApp alone now has a user base of over one and a half billion users.
- Introduce disruptive technologies to this domain. Rather than rely only on linear thinking, the best entrepreneurs are always looking to offer in parallel a more dramatic new alternative. Since these usually require a large investment, and more time, including customer education, they need to be started while your current business is still healthy.
Apple did this with the introduction of the smartphone, which altered the value chain for computers, video, and software, which were already staples that they knew well. Richard Branson is doing it with Virgin Galactic space rides, without impacting his Virgin Airlines.
- Populating new domains to sustain your market. If your product is already unique, then new domains would include adding online to enhance storefronts, and alternatives for business to complement consumer offerings. These allow you to get new growth without fighting existing competitors. Defining new domains is even more powerful.
Elon Musk is doing both of these, first by expanding his Tesla electric vehicle initiatives beyond cars, into self-driving taxis and trucks, and secondly by entering new domains of transportation with SpaceX and Hyperloop. He entertains no sense of a static business.
- Redefine your product to reach a new category. This strategy, often called breakaway positioning, has the intent of expanding your product opportunity into a previously unreachable category. It also has the advantage over competitors of retaining existing customers, while at the same time attracting new customers from another category.
For example, Swatch was able through marketing to define their watches as fashion accessories, as well as timepieces, greatly expanding their segment. Uber added UberLUX, with stylish high-end cars, to declare access to the limousine category.
- Implement a plan for regular strategic acquisitions. Unlike a total reliance on internal innovation and organic growth, growth through acquisition or merger is generally faster and can be self-sustaining as a process. Further, acquisition offers other advantages such as easier financing, instant economies of scale, and new market penetration.
For example, even the giant Amazon acquired Whole Foods as a growth entryway into the competitive grocery and food industry. Apple acquired Shazam to quickly boost Apple Music by letting users identify songs, movies, and commercials from short audio clips.
The reality is that you can never stop changing your business, and still be self-sustaining. The strategies outlined here may seem intuitively obvious, but they require real effort and discipline to implement, perhaps why so few companies consistently outperform the market. Change is the only constant in business, so now is the time for making your plan for regular change a priority.