The dangerous seduction of the exotic
Justin Haber is a professional footballer from Malta. He is also the owner of a local restaurant that featured on the Netflix business turnaround series “Restaurants on The Edge”. Haber is a fanatic about seafood. Consequently, he was flying in the finest oysters from Normandy, langoustine from Norway and so on. As you can imagine, his costs were astronomical, as were his losses. What was bizarre was this: just 100 metres from his harbour-front restaurant was a seafood market selling superb Mediterranean produce caught that day. How is it possible that he could have overlooked this?
Maybe you could just say Haber is a better footballer than restaurateur. But I think the issue is not so much about acumen as perception. Normandy oysters and Norwegian langoustine have cachet, amplified by being sourced somewhere else. If you’re from Malta, they seem more exotic than the produce at the local fish market.
The point is that it’s easy to discount the value of the familiar. Stuff from outside just seems more valuable, whether or not it actually is. The word ‘exotic’ literally means ‘from the outside’. So the expert from afar is more appealing than the prophet from our own land, and I once heard a New Yorker confess that while he’d never visited the Statue of Liberty, he couldn’t wait to get to Paris to see the Eiffel Tower.
Doing More With What You Have Already
The seduction of the exotic can cause businesses to overlook hidden potential. They think the answers to their growth challenges must rely on bringing in new resources from outside: perhaps a rockstar hire, a new computer system, or even an acquisition. And while those things can of course be important, they are also risky and expensive. As an alternative, some businesses have done extremely well by starting somewhere else: recognising and capitalising on the value of resources they had already.
One of the most powerful ways to do this is to look for what I call Implied Resources. Identify areas that are working well in your business and ask: “What resources must be there in order for this to work, and what else can we do with them?” This is where your truly unique assets might be lurking.
This thinking is applicable whatever the size of your business:
Large company. Amazon Web Services was launched when Amazon realised the internal capabilities that they had developed to run their main e-commerce website could be sold as a service to paying customers. As of 2020, AWS has grown to offer more than 200 services and controls more than a third of the cloud computing market, twice as much as its closest competitor. It has consistently been the most profitable division of Amazon and its primary profit driver.
Mid-sized company. Lotus Cars has developed notable expertise in vehicle dynamics through its long involvement in motorsport and high performance car manufacture. It capitalises on that know-how through its consulting arm Lotus Engineering which consults on vehicle dynamics, suspension design and advanced propulsion systems for clients such as Tesla and Formula 1 competitors.
Smaller company. Specialist software house IO Studios wanted an easy way to track its sales pipeline. The company was signed up to a well-known customer relationship management (CRM) system. The problem was that nobody liked using it, so they didn’t. The company decided to use their coding skills to develop a CRM for themselves – one that they would actually like using. One day a client saw it and, impressed, asked if they could adopt it too. After other clients showed an interest, IO Studios built and launched a commercial version called Salesradar with customers ranging from freelancers to giants like Costco.
IO Studios used the same strategy as Amazon and Lotus. When they noticed that others shared a problem they had solved for themselves, they acted entrepreneurially, packaging up their solution into an attractive commercial version to seize the opportunity.
Are you overlooking valuable resources?
Could you do the same as these companies? Here are some questions for you to consider:
- Where have you developed solutions for your own problems that, like Amazon and IO Studios, you could package and sell to others facing similar challenges?
- What internal processes are you so good at that, like GoCompare, who provide price-comparison software for other financial services businesses, and Ocado, who provide grocery retail technology for other supermarkets, you could offer them as a service or product to other people, too?
- What have you learned in the course of business, that like Lotus Cars, you could advise on or even teach others?
It’s human nature to take the familiar for granted. This tendency makes it easy for us to overlook potential to provide value that might seem seductively exotic to a willing customer. If you were a Norwegian langoustine fisherman you might say that “when you’ve seen one langoustine you’ve seen them all”. Nonetheless, you’d be happy to sell them to some guy from Malta.
Andy Bass PhD is author of Start With What Works: a faster way to grow your business, published by Pearson Business. Read a sample chapter and download resources here
