Did you know that companies that build new businesses during economic turmoil often see their revenue and earnings soar?
It’s true – history has shown that those who take an entrepreneurial approach, rather than freeze, outperform their peers. I recall supporting a company during the 2008 financial crisis. While many were cutting costs and hoarding cash, we took bold steps to build new ventures. The result? Revenue growth tripled compared to their more conservative competitors.
Balancing offence and defence is not just advantageous, it’s critical for long-term success. Yet, many avoid bold moves, delay investments, hoard cash and focus solely on core operations. This cautious approach might seem safe, but it often leads to stagnation. In fact, I co-founded @Vonwood during the Covid-19 Pandemic. A demand-driven, auction marketplace for B2B bulk timber. Developing and introducing technological solutions in one of the least digitised sectors.
A @McKinsey survey highlights that in five years, half of revenues will come from products and services that don’t exist today. Sticking to current revenue streams means missing out on immense potential. Instead, companies should consider five emerging business-building archetypes:
- The AI and automation embracer: automation can mitigate labour shortages and streamline supply chains, while AI can boost efficiency and foster new, resource-light ventures.
- The Everything-as-a-Service (EaaS) provider: EaaS models reduce up-front costs, making products more accessible and providing valuable customer insights through data.
- The value chain controller: by reshaping value chains and adopting direct-to-consumer models, companies can reduce risks and increase margins.
- The green leader: embracing sustainability can meet rising consumer expectations and regulatory demands, positioning companies for long-term success.
- The superior information specialist: using existing data to embed new revenue streams allows companies to diversify with minimal cost and risk.