4 Ways to Make the Most of a Business Opportunity
Opportunity has a way of making a soft tap-tap on your door. Smart entrepreneurs listen for these signals--they have ears specifically attuned to the sound.
A recent book called Opportunity Knocking: Lessons From Business Leaders, by CNBC senior talent producer Lori Ann LaRocco, focuses on the sound of these opportunities--from how to take advantage of a burgeoning industry to how to take on a challenge that's bigger than just one company. I recently caught up with LaRocco, and she explained four ways to make the most of any opportunity.
1. Ride the wave of a challenger.
One of the most interesting points LaRocco makes is that many small companies ride on the coattails of other companies as a way to grow quickly. She says one of her favorite examples is from Anthony Wood, the founder of Roku.
"Roku continues to blaze a trail with its legion of consumers and is laying the groundwork to becoming an operating system for television," she says. "For six years, they have been competing with Apple TV, and they continue to grow despite Apple's constant versions of their system." Wood told her that Roku sales doubled when Apple TV launched.
2. Turn big setbacks into big wins.
Another favorite example, she told me, has to do with Uber, the popular ride-sharing service. Anyone following the peer-to-peer car-sharing service knows there have been constant legal challenges, especially from taxicab unions. LaRocco says Uber learned how to turn a setback into a win. When the D.C. Taxicab Commission added a snow emergency fee of $15, Uber didn't raise its rates in response--it might have seemed like an opportunity to increase revenue. Instead, the company pounced on the opportunity and kept rates the same to attract new customers away from its legal challenger. "If the taxi unions want to be competitive, they have to think like a business providing service rather than a cartel holding consumers hostage," says LaRocco.
3. Turn down opportunities that don't match your strengths.
There's a reason Apple became so successful early on--the company focused on engineering prowess and marketing savvy. However, Apple didn't take on IBM and Microsoft in the realm of business process or enterprise software. LaRocco says successful companies need to do the same thing today. Growth happens when a company emphasizes a strength and skips opportunities that exploit a weakness.
"Not all opportunities are created equal," she says. "You have to run each opportunity against your checklist of what your mission statement is, and assess the lay of the land and see what you can do differently."
4. Always weigh the risks.
Every opportunity has an associated risk--it might stretch your staff or your financial resources--but any new partnership, product, or even a big sales opportunity can cause stress on operations and your customer service. LaRocco says one example of how to weigh the risks comes from Ford Motor Company's CEO Alan Mulally. There's a chapter in her book dedicated to how Mulally met the challenge (and risk) of financial insecurity during the 2008 economic meltdown. Mulally knew the risks were great in going to Washington during that time and taking on Congress. He was advocating for an entire industry, not just for his company. Yet, the eventual outcome--not taking any bailout money--meant Ford came out of the meltdown relatively unscathed. "When you are at the crossroads of deciding on an opportunity, you have to weigh the risks," says LaRocco. "If the risk of not doing it outweighs the risk of doing it, you have your answer."