I was fortunate enough to have a large and growing television programming distribution company as a major client, back in the days when I was in the ad agency business. Every time the company opened a new division, there was more business for my agency, and that was nice, indeed. But it was not to last.
My client was so aggressive he was hatching new businesses — businesses he felt were logically related — at a remarkable pace. Soon there was a radio division, a kids’ programming division, a licensing division, and my agency had to run as fast as we could to keep up with them.
The problem was, the new businesses stretched the client’s resources, and demanded experience and relationships that were different from the ones that had brought him success in the television market. He didn’t really have a solid understanding of the new markets he was facing.
The result was inevitable. The new divisions faded away quickly, and my client rededicated his company to his core business.
Innovation and expansion are important virtues in business. But you can quickly get into trouble if you attempt to jump into markets you know nothing about. Before you take the leap, ask yourself what you know about a new market — and what you don’t know.
Should you go for it — or stick to your knitting? Give it careful thought.