Apart from building and creating, an Entrepreneur should always remember a few principles to keep leading his startup. Two of the most important imperatives are Diversify and Adapt. These are the two laws that have been following by the best companies on the market.
The ones that diversify can fail or become the most stable companies, the ones that adapt are always one step ahead. When you run a business you should always be one step ahead, in order to discover new opportunities and projects that you could build at any time. If you understand that your business is insecure with just one project, diversify.
Look at what Angry Birds did, after understanding the importance of branding. One single game is not enough to run a billion dollar company, for this reason they started to design products for the people such as cups and t-shirts. Further they developed new Angry Birds games, but they also worked on other games in order to keep the company going. If they didn’t understand this, they wouldn’t have survived, or at least they wouldn’t have developed Rovio in the way it is today. Likewise Rovio adapted to the new technologies. They didn’t simply release the games just for iOS, but they released them on several different platforms such as Chrome and Facebook. If you adapt and use what other companies have given to you, you will be able to reach more people.
Richard Branson, which recently wrote Like A Virgin, was one of the first to understand the diversification rule. While he was running Virgin Music, he started to be interested in airlines. With this idea, he started his first diversification step by funding Virgin Atlantic. While understanding the importance of the Virgin brand, he kept diversifying his group, by funding new Virgin companies such as Virgin Trains and Virgin mobile. Thanks to the diversification rule Richard Branson has been able to build one of the most important companies in the world and the most famous brand.
The diversification rule is fundamental if you want to keep your company running. This is what Google is doing by building one of the biggest web ecosystem ever seen. On the other hand, as we have seen before, Facebook is not following this trend, with the aim to develop the desktop version as best they can.
Although the diversification rule seems to be the most important one, the adaptation one is also very important. If you write a business plan today, you will be sure that it will work for the next five or maybe ten years, but you won’t be sure that it will still work after fifteen years. The fast growth of technology needs to be followed by everyone. This was the primary cause to the failure of BlockBuster. While Technology was evolving, they haven’t been able to adapt. Instead of adapting to new smart TV, smartphones and tablets, they had been using the same business model they wrote when they started. In this way the losses were huge and the company failed.
On the other hand, Netflix which started as a mail video rent service, understood the power of the technology that other companies were developing. Thanks to this intuition, they adapted their company to the new needs and kept growing day by day. In this way, Netflix closed last year with 3.20B$ in revenues.
There is not a book or a blog post that is going to tell you how to act in different moments of your entrepreneurial journey. The only thing that will follow you wherever you are is your mind, so use it. Understand the market and where it goes, because if you can anticipate it, you win.