There are some lessons you can never learn too often. Because, like it or not, we don’t always learn from our mistakes.
Abel is an acquaintance of mine with entrepreneurial zeal and energy to match. When I caught up with him recently, I found out that his recent adventures have involved a classic challenge.
Along with a friend, Abel started an event-management business. Cain and Abel (not their real names) targeted both business and consumer markets. But trying to please jaded consumers looking for fun and businesspeople demanding bottom-line benefits created the worst result possible: middling success.
Abel and Cain realized they had fallen into a common trap: targeting the broadest market possible. By trying to please too many people at once, they were unable to make deep connections with customers and event sponsors. Sure, their potential market was huge, but as Abel admits, “We weren’t providing enough value.”
Niche markets pay better than mass markets; it’s a classic entrepreneurial lesson, but one that many people learn the hard way. I’m not saying you should turn down a control block in Coca-Cola if it’s offered to you, but if you were starting a beverage company today, you wouldn’t take on the cola market. If you wanted to make it in soft drinks, you would find the niches Pepsi and Coke don’t own — as Cott Corp. did with bargain-priced house brands.
Recognizing they were targeting too many prospects with too many needs, Cain and Abel refocused on fewer markets where they could get to know their customers better and provide real value. Their motto: “Get closer and go deeper.” They targeted business and professional niches, from management seminars to events targeted at writers and filmmakers. And they penetrated ethnic markets, which shared ready-made networks of like-minded people who want new ways to celebrate their community while reaching beyond it.
Unlike the markets Cain and Abel had previously wooed, the people who attended these events had pressing information and self-development needs, and were willing to pay for events that fulfilled those needs. “Specializing opened up markets that we could never reach before,” says Abel. “There turns out to be no shortage of niche markets. The closer you look, the more you see.”
But Cain and Abel soon discovered another paradox: nothing threatens a partnership like success. As their business grew, they disagreed more often. The partnership ended acrimoniously, with Abel emerging as sole owner.
That’s not the end of this story. When I met with Abel, he was still expanding his events business, but he was also pursuing a new idea: starting a magazine.
Abel’s plan was impressive. He had picked a tiny but growing market in medical publishing. Medicine is marked by constant change and is full of people with a pressing need to stay up to date.
But Abel’s marketing approach showed a distinct lack of focus. He planned to sell subscriptions to consumers and professionals alike. He also wanted to sell advertising space to drug companies trying to reach doctors and to marketers trying to reach a high-end consumer market. All told, he had four separate marketing challenges. Flogging magazine subscriptions is hard enough without trying to sell to two different markets at the same time. And advertisers today want targeted media, not magazines with dual personalities.
Abel and I kicked around several solutions: directing the magazine at one kind of reader, or giving the magazine away through doctors’ offices to build circulation faster. Whatever course he chose, I recommended simplifying. Life is too short to be blazing four trails at once.
What struck me, though, was how much Abel’s new challenge resembled his previous one. Tightening your focus means targeting fewer customers, but creating much stronger relationships over time. Abel survived the focus fumble in his first business, and will likely avoid the second. But his story suggests another lesson: experience is valuable only when we learn from it.
© 2003 Rick Spence
