The market, sadly, does not reward allrounders.
When Andre Agassi was two years old, his dad taped a tennis racket to his hand so he could get in on the court, even though he was too young to properly grip the handle. Such a one-dimensional upbringing most of us would consider to be horrifically skewed, and broadly unhealthy – and yet that one-dimensionality, rightly or wrongly, also created one of the most celebrated and wealthiest people on the planet.
In every field you care to think of, economic rewards accrue to the unbalanced like this, for it is only the unbalanced that have the freedom to over-deliver in one particular area.
Now I would hesitate to recommend this strategy for human beings, given that a successful life isn’t measured only on an economic dimension, but when it comes to business it has a lot to recommend it.
Radically underperforming in one area in order to gain leverage in another is an outstanding tactic to create a business which:
- Breaks the cost conventions of its category, becoming disproportionately profitable
- Achieves huge stand out, and even iconic status
- And even creates its own new sub category
We’re talking here about the business difference between your run-of-the-mill middle manager, who has a decent work life balance, a family, hobbies, and no coke problem; versus your stereotypical “Master of the Universe” whose life is a shambles everywhere but the office as he pulls in an eight-figure paycheck.
The former, like most businesses, is perfectly “successful” – but too well rounded to achieve extreme outcomes. The latter is poorly rounded, but as a result does achieve those extremes.
Given that most businesses don’t have spouses and hobbies, it makes little sense for them to be well-rounded – and yet they chase this idyll all the time.
Most businesses are concerned with the utterly asinine ambition of being “the best”, which they interpret as being “good at everything”. Most businesses also chase the destructive phantom of “market share”, which they interpret as “appealing to as many people as possible”. As a result most businesses shape themselves to utterly generic, and gradually along with their equally misguided competitors begin to commodify their markets.
Master of the Universe businesses on the other hand, selectively choose to be utter garbage at something which a lot of customers in their category really care about. In exchange they achieve exponential performance in other areas which breaks the inertia of their markets.
This is a particularly important approach for smaller, independent, non-corporate businesses. If you’re a Unilever brand, or something like that, being generic makes quite a lot of sense, because you get your leverage from scale and power, not from what your business actually does. But if you don’t have a $100million advertising budget, or the ability to immediately ramp up to global production volumes, then being well-rounded fast becomes suicidal.
Naturally you have to be skilful in the selection of your weaknesses of course:
- There are some measures which will be non-negotiables in your category; things which if you let them slip will disqualify you from the game altogether. A car brand can get away with sacrificing a roof, say (see the Ariel Atom), but it probably can’t get away with being incapable of getting from point A to point B.
- Equally there will be some measures which you could sacrifice which won’t give you leverage in another area. The whole point of underperformance is to allow for over-performance in your targeted area; not to simply be wantonly obtuse.
- And finally you don’t want to be subtle about it. Your weakness should ideally represent a pretty binary distinction from the rest of your category. For example consider how radical it was when the bank First Direct launched in 1989 with no physical branches – the pioneers of this approach in a pre-internet age. This was a superb weakness: hugely obvious, and it gave them massive leverage in other areas.
Until you get over yourself, and free yourself to be bad at things, the potential latent in your business will always remain invisible. You will continue to search in vain for ways to excel, never realising that you are searching whilst shackled by your own “commitment to excellence”, or however you put it.
So try the thought experiment. Entertain the idea that you might become really bad at something which you currently value, and then explore what other avenues this might open up. Do it right and it will be like lifting a veil from your eyes, and you’ll see the market landscape in a way that nobody has ever seen it before.