Often the fastest road to growth is to uncover whose needs aren't being met--and work like crazy to meet them.
For its first 40 years, Marlin Steel Wire Products made exactly what its name implied--steel wire baskets. A few years after I bought the company in 1999, we made a major transition from building steel wire baskets used primarily by bagel bakeries to making steel wire baskets for much more specialized, high-tech clients in fields like aerospace, automotive and pharmaceuticals.
That proved much more fruitful, but we kept exploring. We always canvass our customers for feedback and a few years ago noticed that some seemed frustrated because they sometimes had to wait for a second vendor to produce the sheet metal portion of our wire containers. Often, we were just as frustrated ourselves. We’d move like lightning to produce a basket order but then have to wait weeks for someone else to do the sheet-metal finishing touch. All that hurry-up-and-wait was painful.
I’m a big believer in feeding the niches that appreciate you. We pour resources into our strengths and take them from our weaknesses. Discern a pattern where you’re successful and focus on that. Concentrate on how you can be more appealing to those promising niches. Make massive investments in a certain area. Be No. 1 in that zone.
Two years ago we decided we’d had enough. We invested $2 million in machines to laser-slice, punch and fabricate sheet metal. We also bought out own Haas milling machine so we could do our own tooling to speed jobs and wouldn’t have to wait for someone else to make tooling for us. The investment paid off, proving a major contributor to our rapid growth.
That lesson was driven home to me at an inspiring seminar I attended recently in Boston. The event was put on by the Initiative for a Competitive Inner City, founded by a Harvard business professor, to celebrate 100 of the fastest-growing, urban small businesses across America. These companies had averaged fourfold growth over five years--during a punishing recession no less--by identifying and addressing unsatisfied niches in the marketplace.
Their stories were breathtaking:
A trucking executive who realized that the national average of 70 percent fulfillment in freight pickups had huge room for improvement, and because of that, great potential for a business opportunity. He built Coyote Logistics into a $1 billion operation in seven years finding loads to fill tractor-trailers that would otherwise return home empty--and by focusing on a pickup rate closer to 100 percent.
A young mom who sensed that the usual processed baby food in glass jars hadn’t progressed with the times and started selling organic baby food in pouches. Her 50-employee business, named Happy Family, just sold a 92 percent stake to a French conglomerate Groupe Danone in a deal reported to be in the hundreds of millions of dollars.
A college student who created a global business to develop reuses of everything from chip bags to cigarette butts to diapers because he thought a better alterative must exist to all the waste being buried in landfills. Propelled by social media, reality TV, and a greater desire by people and businesses to act green, TerraCycle now has millions of people in 20 countries sending it trash. That waste gets recycled into hundreds of products that are then sold at major retailers.
I marveled at being in the company of these folks. What united them was that each recognized something amiss, but instead of lamenting and accepting the status quo, each pursued a solution--and built an extremely successful enterprise in the process.
In a similar vein, if we had stood pat with our steel wire business, I believe we could have continued to grow, just not as aggressively. We’ve already experienced months when we sold more products made of sheet metal than steel wire and that hadn’t happened in the previous 45 years at our company. Our employees are just as happy regardless of what steel type generates their paychecks. But it all starts with recognizing a niche that needs more attention and doing all you can to address it.